33
CLICK TO EDIT MASTER TITLE STYLE INVESTMENT TRENDS IN HEALTHCARE DANILO MAZZARA Danilo Mazzara @DaniloMazzara
CLICK TO EDIT MASTER TITLE STYLE
INVESTMENT TRENDS IN HEALTHCAREDANILO MAZZARA
Danilo Mazzara @DaniloMazzara
CLICK TO EDIT MASTER TITLE STYLETODAY’S AGENDA
2
1. KEY TRENDS FROM A GLOBAL PERSPECTIVE
2. OPPORTUNITY FOR ITALY
3. KEY TAKEAWAYS
CLICK TO EDIT MASTER TITLE STYLEMACROECONOMIC DRIVERS ARE LEADING TO AN UNPRECEDENTED
HEALTHCARE INDUSTRY CHANGE
3
Patent Cliff
Rise of generics
globally
Rise of
specialized
medicine
Digitization
(Cloud, IoT,
Wearables)
Changing
Consumer
(Mobile/ Social/
Gamification)
Big Data (Adv
Analytics,
Genomics, AI)
The outside-in
enterprise
M&A & New
Business
Models
The pivot to the
patient
HC rising faster
than GDP
Silver Tsunami
and Chronic
disease
Outcomes-
Based
Reimbursement
CLICK TO EDIT MASTER TITLE STYLEINNOVATION DRIVING FUNDAMENTAL CHANGE TOWARDS
PERSONALIZATION
4
Convergence
Patient Engagement
Services
$14B market by 2020
Diabetes $30B new
growth by 2020
Stroke Prevention in AF
$10B new market by 2020
HCV / Hepatic
$19B new market
by 2020
Immuno-Oncology
PD-1, CTLA-4, CART
$35B new market by 2020
Transcatheter Heart Valves
TAVI
$2B by 2018
Surgical Robotics
$20B market by 2020
Wearable devices
$19B market by 2020
Genetic Screening/Editing
$25B market by 2025
mHealth & Home
Monitoring
$26B market by
2020Alzheimers disease
BACE-1, Beta Amyloid,
Tau $10B by 2020
Source: Accenture Research based on EvaluatePharma Sep-15
CLICK TO EDIT MASTER TITLE STYLEEMERGING DIGITAL TECHNOLOGIES ARE THE KEY ENABLERS, THEIR
CONTINUOUS COST DOWNSIZING MAKE THEM CHEAPER AND
AFFORDABLE
5
DNA sequencing cost
Robotics/AR: Automating and Assisting
Surgery/training
3D Printing: Personalized and in the field custom
manufacturing
Medical IoTs: Connected devices, continuous
monitoring
AI/Machine Learning: Clinical Decision support,
Accelerated R&D
Genetics: next generation, low cost high accuracy
LS tools
Bioelectronics: Small implantable devices targeting
specific organs
Blockchain: anti-counterfeiting, health data
marketplaces, operations management and patient
identity
Key emerging Technologies
2000 2007 2014
2,7 BLN
10 MLN
1K
CLICK TO EDIT MASTER TITLE STYLEAI IN THE HEALTHCARE IS EXPECTED TO HAVE AN EXPLOSIVE
GROWTH IN THE NEAR FUTURE
6
2014 2021
$0,6B
$6,6B
CAGR+40%
Health AI Market Size 2014-2021
Source: Artificial Intelligence: Healthcare’s New Nervous System, Accenture, June 2017
AI disruptive use cases
Detecting skin cancerIn one trial, AI caught 95% of dangerous melanomas, doctor got just 87%
Helping coma victimsAI predicted when a trauma victim would wake up, getting nearly 90% of cases correct
Analyse eye scansAI can diagnose as accurately as world leading experts and can even explains its decision
Drug developmentBig data and machine learning can devise and trial new drugs much faster
Recognise depressionBy analysing a person’s speech, AI can predict if they are depressed
Robot doctorsA robot doctor scored better than 96% of the class in a Chinese medical exam
Spotting outbreaks of diseaseAn algorithm saw an Ebola outbreak 9 days before the WHO announced it
CLICK TO EDIT MASTER TITLE STYLEHEALTHCARE IS ONE OF THE MOST ACTIVE INDUSTRY FOR
BLOCKCHAIN
7
17%
35%
2016 2017
Blockchain Products Deployed By Industry Examples Growth Initiatives In Healthcare
Source: Deloitte, 2017
Roche started a Serialization pilot to track
and trace the passage of prescription drugs
with Chronicled (supply chain solutions)
Merck and SAP has developed the SAP
Pharma Blockchain POC app for verifying the
authenticity of returned drugs
Philips Healthcare discovered blockchain
applications like securing patient data in a
decentralized database with Tierion
Pfizer and Aimedis are levering blockchain for
a new patients therapy result sharing and
monitoring systems
Doc.ai found a way to incentivize patients to
contribute to research giving them tokens to
add their health data to a pool.
CLICK TO EDIT MASTER TITLE STYLETHE RISING OF DIGITAL HEALTH COULD GENERATE MARKET
DISRUPTION
8
Top 10 best funded digital health companies
in 2017 (M$)
VC investments in Digital Health
(B$ - #deals)
Source: Global digital health funding report, Startup Health, 2017
Corporate Venture Capital with focus on
Digital Health (selection)
500 mln $ CVC from Merck for Digital
Health startups
100 mln $ CVC driven by Novartis and
Qualcomm
GE Healthy imagination CVC focus on
imaging and diagnostic
CAGR+31%
# deals
Amount
2,3 2,9
7,26,2
8,2
11,5477
647596 550
658
794
2012 2013 2014 2015 2016 2017
914360
325280
250231
200165161161
GrailGuardant Health
PelotonAuris
23andMeModernizing Medicine
HaodfWuxiNextcode
SomaLogicBright Health
CLICK TO EDIT MASTER TITLE STYLE
Patient Experience~$1,64 B
The access to and purchase of
healthcare solutions is easier than
ever as the whole healthcare
ecosystem becomes more
consumer focused
Medical Device~$01,37B
Smart objects, VR/AR visors,
connected sensors and all other
digital electronic medical
instruments are proliferating widely
and rapidly throughout the medical
community.
Personalized Health~$1,59B
Genomic powered technologies
revolutionize medicine through
advanced clinical services lowering
both risks and costs for the end
user
Big Data/Analytics~$1,39B
Healthcare system benefits a lot
from getting valuable insight
from very large data sets to offer
predictive and prescriptive
analytics
Insurance and services~$1,12B
Powerful softwares allow data
tracking and analysis of potential
patients to offer data-driven,
customized services, such as
medical insurance
Workflow~$1,07B
Technology is enhancing the
patient/health care relationship
through clinical evidence and
advanced analytics to make better
clinical therapy decisions for
doctors and hospitals
Research (~$0,93B), Education and Training (~$0,75B) Population Health (~$0,70B) and Electronic Health Record –HER (~$0,40B) complete the list of the 10 most active digital
health market in 2017.
THANKS TO DIGITAL IMPROVEMENTS MANY NEW THEMES ENTERED
INTO THE MARKET
Source: Global digital health funding report, Startup Health, 2017
Digital Health main themes
9
CLICK TO EDIT MASTER TITLE STYLEDIGITAL DISRUPTION IN DIABETES TREATMENT HAS INCREDIBLY
IMPROVED PATIENTS’ THERAPY MANAGEMENT
10
Source: American Diabetes Association
19831923 1949
Digital Adoption Degree
1964 1966 1970 1978 19921981 1999 2012 2016
Portable Insulin Pumps
Commercialized
Portable Glucose Meter
Commercialized
First Continuous Glucose
Monitor system approvedArtificial Pancreas
System Approved
Selected Digital Disruptive Innovations
CLICK TO EDIT MASTER TITLE STYLEPEAR THERAPEUTICS LAUNCHES THE FIRST FDA-APPROVED
PRESCRIPTION DIGITAL THERAPEUTIC
11
reSET it's the first software-only digital therapeutic
the FDA has ever cleared (with claims) to improve
clinical outcomes for patients with substance use
disorder (SUD) and opioid use disorders (OUD).
Developed by PEAR Therapeutics, the product has
already attracted a lot of interest from industry players
which are engaging in new initiatives to leverage this
new tool.
reSET
CLICK TO EDIT MASTER TITLE STYLEACCORDING TO OUR RESEARCH PATIENT CENTRICITY REMAINS THE
KEY TOPIC AND OFFERS HUGE OPPORTUNITIES TO START AN
INNOVATION JOURNEY
12
2Patients are generally not aware of services that are
available to help them.
5Patients want healthcare
professionals to be the primary
source of information on services
they need to manage their health.
4Patients value services
across all disease states.
1Patients want more
help before they are
being treated.
3When patients are aware of services,
they use them.
EXTRACT FROM RECENT
ACCENTURE RESEARCH
CLICK TO EDIT MASTER TITLE STYLE
3%
1%
6%
3%
4%
5%
10%
63%
DESPITE OF THE RISING OF NEW TECHNOLOGY HEALTHCARE
PROFESSIONALS REMAINS THE PRIMARY SOURCE OF INFORMATION
FOR PATIENTS
13
Note: a small number of respondents answered ‘don’t know’ (not shown).
Base: All (10,000) and all wanting one point of contact (8,688)
10%
want the
single point
of contact to
be their
healthcare
professionals
85%
Healthcare
Professionals
Others(including insurance and
pharma companies)
Total 85% 10%
US 88% 7%
Brazil 88% 9%
France 87% 10%
Germany 71% 25% (insurance 19%)
UK 86% 5%
Insurance companies mentioned more in Germany
Doctors/specialist
Support staff within
Doctors/Specialist practice
Dedicated patient-care
support team
Nurse
Pharmacist
Insurance company
Pharmaceutical
companies
Other
others
Primary source of information
preferred by patients
Primary source of information
preferred by patients (country details)
CLICK TO EDIT MASTER TITLE STYLENEW BUSINESS MODEL DRIVEN BY NEW TECHNOLOGIES AND NEW
CUSTOMER NEEDS WILL EMERGE ALSO IN THE HEALTHCARE
14
CLICK TO EDIT MASTER TITLE STYLETODAY’S AGENDA
15
1. KEY TRENDS FROM A GLOBAL PERSPECTIVE
2. OPPORTUNITY FOR ITALY
3. KEY TAKEAWAYS
CLICK TO EDIT MASTER TITLE STYLELIFE SCIENCE IS AN ITALIAN EXCELLENCE WHICH CAN BE FURTHER
LEVERAGED AND VALORISED
16
Source: elaborazione su dati Assobiomedica, Farmindustria, 2017
Life science industry in ItalyPublic and private Italian healthcare expenditure
Total: €153,9B
Pharma Med-Tech
Revenue
Exports
Employees
Graduated(university and
high school)
R&I investment
on Revenues
€31,2 B
79%
€11,4 B
43%
65.000
79%
76.000
85%
€1,1 B
9,6%
€1,5 B
4,8%
Source: VIII Rapporto RBM-Censis, 2018
76,0%
16,2%
7,8%
Primary care, Secondaty, Hospital Services,…
Pharma
Medical Devices
CLICK TO EDIT MASTER TITLE STYLEINNOVATION ECOSYSTEM IN ITALY IS GROWING THANKS TO STRONG
REGULATORY IMPROVEMENTS AND LIFE SCIENCES IS GETTING A
LOT OF ATTENTION
17
Incubators/
Acceleration
programs
Collaboration
Selected Initiatives in
Italy
Simplified access to the “Central
Guarantee Fund” for bank credit€596
(mln)
Public investments in innovative start-ups
through equity and debt (VC, Funds of
funds and Smart & Start)
€900
(mln)
Corporate Sponsorship (Start-up losses can
be deducted by parent company)NA
Tax deduction of invested capital in innovative
start-ups and innovative SMEs30%
Some recent regulatory intervention
Innovation
Contest
Venture Capital
CLICK TO EDIT MASTER TITLE STYLEMARKET IS STILL GROWING BUT EXPENDITURE IS GRADUALLY
SHIFTING FROM PUBLIC TO PRIVATE
The rising of new stakeholders and payers
Healthcare consumerization
Changes in traditional channels
Italian Healthcare Expenditures per Payers (B€)
Source: VIII Rapporto RBM-Censis, 2018
1
2
3
112,9 114,1
23,5 33,93,7
5,7
2010 2017
Private (Complementary Health Funds)Private (Out of Pocket)Public
+1,1%
+44,2%
+54,1% 153,7140,0
18
CLICK TO EDIT MASTER TITLE STYLEIN THE FUTURE INSURANCE PLAYERS WILL BECOME KEY
STAKEHOLDERS
19Source: Premi Del Lavoro Diretto Italiano 2017, ANIA, 2018
After a phase of consolidation, market is growing again due to
insurance players seeking new sources of value
Selected players such as RBM Salute, Allianz and Cattolica
are investing significantly, with important growth rates (up to
>15% YoY growth)
Strong pipelines around new connected health services, even
if still focus on “well being”
1 The rising of new stakeholders and payers
CLICK TO EDIT MASTER TITLE STYLEPATIENTS ARE MORE INFORMED AND PROACTIVE IN THEIR HEALTH
CHOICES, AS SHOWED BY HEALTH TOURISM FLOW
800-900 k
patients
4,6 B€
2 Healthcare consumerization
20
CLICK TO EDIT MASTER TITLE STYLEHEALTHCARE CONSUMERIZATION IS A CONSOLIDATED TRENDS IN
SOME MARKET AND PROBABLY IT WILL EXTEND TO OTHERS
21
Key growth factors:
▪ Demographic factors
sustaining the growth
(aging population)
▪ Relevant market
under-penetration
RetailersManufacturersSuppliers
Value
distribution
~10
~12
~15
2010 2015 2020
~4%
Hearing aids global retail market (B€)
Hearing devices value chain
Hearing AidsDental Clinics
(from top 50 brands with more than 4 branches)
2 Healthcare consumerization
214295
367
577650
774875
1040
2012 2013 2014 2015 2016 2017 2018* 2019*
CAGR+22%
*forecasted
Main Players
133
99
65
45
Source: Keystone, march 2018
CLICK TO EDIT MASTER TITLE STYLEIN THE COMING YEARS WE WILL HAVE A DEEP TRANSITION IN
PHYSICIANS: THEY WILL BE LESS, YOUNGER AND WOMEN
PRESENCE WILL GROW
22
On baseline
% 23,2% 60,9% 31,3%
National health system physicians
retirements ‘18-‘28 (in 000)
50%
60%
% Of female physicians per Age
Group
31%>= 55
50 - 54
<=49
Age
3 Changes in traditional channels
Source: Fimmg, 2018 Source: FNOMCeO, 2018
CLICK TO EDIT MASTER TITLE STYLE
Pharmacy is an highly preferred
retailer
PHARMACIES ENSURE AN HIGH DEGREE OF SATISFACTION AND
LOYALTY AND WILL EVOLVE INTEGRATING MORE VALUE ADDED
SERVICES
23
New Services
Dietetic
consultancy
First instance analysis
(haemoglobin, cholesterol,
…)
Home
assistance
Drugs delivery
IT Healthcare
(Cardiac
holter,…)
Nursing
Services
Medical device
rental
Fidelity
programs
Therapeutic
adherence toolsEducation &
prevention
Value added services
Most desired services
Source: La farmacia del futuro, Doxa, 2017
3 Changes in traditional channels
CLICK TO EDIT MASTER TITLE STYLEINNOVATION IS A KEY PRIORITY IN THE HEALTHCARE INDUSTRY AND
STARTUPS CAN HAVE A CRUCIAL ROLE IN DRIVING THE CHANGE
24
Share of Healthcare sector on ….
Leverage digital technology along the
whole value chain
Build services on top of product
Build and measure value across multiple
stakeholders
Be credible and take your time
Leverage the rising of open innovation
9,9%11,8%
25,4%
GDP GlobalMarket Cap*
VC investments**
Source: Accenture Elaborations on market data
1
2
3
4
5
* Based on Global Standard and Poor's ** Based on USA and Europe (NVCA, EVCA)
x2,5
CLICK TO EDIT MASTER TITLE STYLELEADING LIFE SCIENCES PLAYERS ARE APPLYING DIGITAL
TECHNOLOGY TO ENHANCE THEIR BUSINESS AND OPERATING
MODEL
Value Areas
Digital Customer: Apply digital
technology to address customers in a
more sophisticated way to increase
revenues and profitability
Digital Enterprise: Decrease costs of
the existing value chain’s primary
functions (e.g. R&D) as well as support
functions (e.g. HR)
Digital Business: Digitize your current
business model or develop new
business models generating profits
based on digital technology
DigitalEnterprise
Internal Focus
Ex
tern
al F
oc
us
DigitizeOperations
DigitizeCustomer Experience
Digital CustomerDigitalBusinessDisrupt
(Sub-)Market(s)
Source: Accenture Strategy
1 Leverage digital technology along the whole value chain
Digital Strategy Framework
25
CLICK TO EDIT MASTER TITLE STYLEDIGITIZATION LEVERS CAN BE USED TO UNLOCK EBITDA
POTENTIALS ACROSS THE ENTIRE VALUE CHAIN
26
Incr
ease
R
even
ue
Dec
reas
eC
ost
sD
ecre
ase
Co
sts
Support Functions
Manufacturing & Supply
Marketing & Sales
Research & Development+
01. eDetailing - Digital Sales Rep Enablement
70
02. Analytics-based Marketing Insight Generation
90
03. Digital Marketing Content Management
35
04. Internal Marketing & Sales Collaboration Platform
110
05. Customer Information Self-Service Enablement
35
13. Digital-enabled HR <5
14. Digital-enabled Procurement <5
16. Digital-enabled Finance 30
15. Digital-enabled IT 70
06. Scientific Collaboration Platforms/ Open Innovation
25
07. Analytics-based Virtual Screening & Simulation (in silico)
75
08. eLabeling for Clinical Supply 10
09. Sourcing Process Automation 10
10. Analytics-based &
11. CollaborativeSC-Planning65
11. Digital-enabled Mfg. &
12. Asset Maintenance250
12. Supply Chain Cockpits & Logistics Platforms
40
340 m€ 110 m€ 365 m€
105 m€
24
% In
crea
se
of
EBIT
DA
3%
Incr
ease
o
f EB
ITD
A
1 Leverage digital technology along the whole value chain (EBITDA upside x digitalization, 10 B€ Company)
CLICK TO EDIT MASTER TITLE STYLEBUILDING SERVICES ON TOP OF PRODUCTS IS A TOP PRIORITY TO
GENERATE REVENUES GROWTH AND STICKINESS
27
2Patients are generally not aware of services that are
available to help them.
5Patients want healthcare
professionals to be the primary
source of information on services
they need to manage their health.
4Patients value services
across all disease states.
1Patients want more
help before they are
being treated.
3When patients are aware of services,
they use them.
EXTRACT FROM RECENT
ACCENTURE RESEARCH
2 Build services on top of product
CLICK TO EDIT MASTER TITLE STYLETHE NEW VALUE EQUATION REQUIRED TO CROSS MULTIPLE VALUE
DRIVERS SIMULTANEOUSLY FOR SEVERAL STAKEHOLDERS
28Source: IMF,2018
General government gross debt on GDP
(selected advanced economy 2018)New Value Equation
Digital creates transparency, requiring
businesses to solve for all Stakeholders
3 Build and measure value across multiple stakeholders
86,6
96,3
59,8
191,3
129,7
236
53,5
121,2
110,2
96,7
86,3
108
Canada
France
Germany
Greece
Italy
Japan
Netherlands
Portugal
Singapore
Spain
United Kingdom
United States
CLICK TO EDIT MASTER TITLE STYLENEW KEY STAKEHOLDERS CAN BE ENGAGED TO BUILD NEW “WIN
WIN” SOLUTIONS
29
Healthcare Focus
Bu
sin
es
s R
ela
tio
ns
hip
(Clie
nt
Typ
e)
B2B/
B2G
B2C
Inside Outside
System Integrator &
Tech Plyers
Large
Corporate
Utilities player
1
3
2
Insurance Players
Corporate Welfare
IOT and digital Transformation
Connect Home
5 G
3 Build and measure value across multiple stakeholders
Telco
CLICK TO EDIT MASTER TITLE STYLELONG TIME AND BIG INVESTMENT ARE NEEDED TO BE IN THE
MARKET, PLAN YOUR EFFORTS CONSISTENTLY, FIND THE RIGHT
SKILLS MIX AND LOOK FOR SUSTAINABLE PARTNERS
30
Time* for approval Medical Device(USA vs EU in months)
Cost of new drugs (median RD cost/new drugs in B$)
5,3
1,8
0,4
1 2-3 > 3
4)
Launch
3) Pre
Launch
12
Elapsed (months)
24 -30 6-12 3-6
Key milestones
Therapies
effectiveness
in the animal
Prototype
Therapies
effectiveness in
human
Supply chain
validation
CE
Registra
tion
FDA
approval
Operating
model
released
2) Clinical Trial
and
supply chain in
planning
1) Pre-
clinical
5-10 M€ investment needed before launch
Real example on med tech start up
# drugs
per company
4 Be credible and take your time
Source: Elaboration based on Forbes, 2013
Source: Emergo, 2017
Device Class USA EU
Class I <1 3-5
Class II 6-9 3-5
Class III 18-30 6-9
*From submission to approval
CLICK TO EDIT MASTER TITLE STYLETHE RISING OF OPEN INNOVATION IS AN OPPORTUNITY TO VALIDATE
AND FAST PROTOTYPE NEW SOLUTIONS
31
Competences / Industrial Assets
+
+-
-
How company can connect with Innovation ecosystem
Fin
an
cia
l ca
pita
l
Corporate Venture Capital
Setup of a financial entity, aimed to invest on
behalf of the company
Facilitator/ Networking
Support to selected start-ups by acting as a bridge
to accelerator, incubator, investors, mentors, etc.
Lab
Setup of a R&D facility run in collaboration with
start-ups, universities and industry partners
Showcasing
Facility where clients and other visitors can
experience cutting edge innovation
Corporate Accelerator Specialized support to selected start-ups in
order to facilitate the Route to Market
Contest
Innovation contest with cash and visibility as prizes
Sponsorship
Financial support on different kind of activities
Joint Venture
Financial investment aimed to the achievement of a
shared project
Venture Capital
Capital allocation on industry-specialized funds
5 Leverage the rising of open innovation
CLICK TO EDIT MASTER TITLE STYLETODAY’S AGENDA
32
1. KEY TRENDS FROM A GLOBAL PERSPECTIVE
2. OPPORTUNITY FOR ITALY
3. KEY TAKEAWAYS
CLICK TO EDIT MASTER TITLE STYLEKEY TAKEAWAY
33
The Healthcare is one of most impacted industry by
technology breakthrough
Life Science in Italy is an excellence which can be
further leveraged and valorized
Startups can have a key role in bringing innovation
and accelerating the change
Danilo Mazzara @DaniloMazzara
