Potential Opportunities in Life Sciences Stemming From COVID-19 Pandemic
Out of every crisis, a new opportunity arises. As the health care systems are struggling to cope with the challenges brought about by the COVID-19 pandemic and the life sciences industry is refocusing its priorities on the fly to help in the fight against the coronavirus, innovative technology developers should look beyond the current crisis for opportunities that will arise once the dust settles. We expect that several market segments will in particular benefit in the coming years and the industry stakeholders – tech developers, investors, health care providers, and payors – should focus on:
- Rapid point-of-care (POC) diagnostics: current crisis has underscored the need for diagnostic platforms that can enable deployment of rapid, large scale testing operations to assist in prompt identification and triage of patients. The first wave of development of such platforms was spurred by the SARS and Ebola epidemics in the late 2000’s, but the adoption within the healthcare systems has been slow due to the economies of scale advantages of the traditional lab-based testing. The main argument against using the POC solutions was/is that the large installed base and the comparatively cheaper per-test costs of the lab-based solutions make more economic sense in the long run. However, the current crisis has shown that the lab-based infrastructure is a bottleneck for the large scale testing on a global scale, creating a push for POC adoption. Furthermore, once things get back to normal, two independent market dynamics will create demand for these types of technologies:
- Global (re)stocking of strategic supplies by the emergency management agencies and other government entities based on the new learnings. POC platform solutions, especially those that can be applied for multiple different diseases/pathogens, are useful in any large scale response situation (natural disasters, wars, etc.) and/or to augment/create diagnostics capabilities in remote areas.
- Expected proliferation of telemedicine and/or personalized medicine will create a need for diagnostic- and monitoring-related testing at patients’ homes and in other non-traditional settings. Also, POC solutions can open up new revenue streams for primary care physicians and specialized practices not attached to large hospitals, thus creating another driver for POC adoption.
Most of these drivers have existed before the current pandemic, but did not work in concert to promote POC adoption. We expect to see a marked increase in interest for POC tech in the coming months and years. That said, developers will still have to solve some of the major challenges, particularly the higher per-test cost.
- Vaccines: Currently, the major issue in bringing any vaccine through the regulatory approval process and into the market is the lack of funding. Most of the work in the infectious diseases space is now done by smaller companies and startups, which lack resources (workforce, infrastructure, and finances) to go through the process alone. The fact that large pharma has (mostly) exited the market due to low margins and competition from the manufactures of generic drugs is giving investors a pause as they don’t see a clear exit path and, as a result, are reluctant to invest. We see a major shift in this market segment as the governments will be forced to fund new research; that said, this particular opportunity will be short lived for solutions focused on a single disease/target. Companies that will benefit the most will be the ones working on platform solutions for rapid vaccines development and the tech that can be ported over to adjacent markets, such as the development of viral vectors that have applications in, for example, oncology.
- Antiviral Therapeutics: Related to the above, the lack of clear exit paths for companies in the infectious diseases spaces is impeding the progress and slowing down the proactive approach to developing new antiviral therapeutics. The sentiment within the industry is that the silver lining in the current situation is a potential increase in funding, which could in turn kick start the sector. Some of the largest opportunities will be for the developers of AI/ML platforms that can speed up the drug discovery and development processes to enable rapid therapeutics development for novel pathogens. These technologies have applicability in adjacent market segments, as well. Another important set of solutions that can see increased funding are the technologies that can accelerate clinical trials; again, these solutions can span across the entire biopharma sector.
- Digital Health: We are witnessing an accelerated adoption of telemedicine across the globe. Recognizing the need to promote telehealth as a public health and safety issue, World governments are bringing the reimbursement levels for telehealth on par with in-person visits. We may be seeing a tipping point that takes telehealth mainstream in one stroke, transforming the way we experience health care in the future. Most importantly, the public at large will get used to telehealth visits as an acceptable way of obtaining health care for low-acuity needs. As a result, all of technologies that can enable telemedicine, including core medical tech such as diagnostics and monitoring, as well as the supporting technologies such as communications, cybersecurity, data storage, data analysis, etc. will see an increased interest from healthcare providers, investors, and payors. This will create opportunities for companies from many industries; those coming from industries not traditionally working in the health care space will succeed only if they can adapt to stringent regulations, as the expectations are that the need to ensure patients’ safety and privacy will not be compromised as a result of the current crisis. In addition to the currently offered mainstream telemedicine services, the following digital health technologies should see a large growth in the next three years:
- Digital epidemiology tools, including monitoring of patients and their movement, patient education, direct to consumer virtual triage, chatbot advice.
- Mental health-related technologies due to the increasing number of people working from home, or dealing with isolation, quarantine, etc.
- Global travelers’ health care services, including self-assessment, global telemedicine, global network of medical providers, and global e-prescribing.
- Digital tools for prevention and control of environmental pathogens.
In addition to shifting technology trends due to the COVID-19 pandemic, we expect to see changes in how the industry is governed/regulated. In particular, it is highly likely that the global regulatory bodies (FDA, Health Canada, European Medicines Agency, etc.) will change the rules of adoption of new technologies, speeding up approvals, especially in sectors deemed to be of strategic importance. We are already witnessing ad hoc changes implemented on the fly; expect that many of those will be re-evaluated and tweaked with the intent to make them permanent. We also expect to see much stricter guidelines on the use of animals in medical research, especially as they pertain to animal handling and housing.
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