The Rise of Smart Medical Devices
Last week the QuiO team attended AdvaMed 2015 in San Diego, the annual conference organized by the trade association for the medical device industry. After three full days of panels and presentations covering all aspects of medical technologies, here was the big takeaway:
Digital technologies are driving the medical device industry.
Ok, that probably isn't a revelation for most. However, it's significant considering who attends this conference. They are the large incumbent device manufacturers, such as Medtronic, Stryker, Johnson & Johnson, and Becton Dickinson. These companies generate nearly all of their revenue from traditional medical device sales. Think heart valves, joint replacements, infusion pumps, syringes, even the iconic stethoscope.
View from the San Diego convention center.
The fact that digital technology is the key topic being discussed at a conference like this is pretty amazing. This was reflected at the innovation showcase, where nearly every startup presented a device that was either smart, connected, or typically both. In addition, panels of medical device investors discussing the current fundraising environment all agreed that traditional devices weren't in favor anymore (except for late-stage, de-risked devices with positive clinical data).
Early stage funding is now focused on medical devices with a digital component. Investors are also looking for new business models built around these information technologies, including models that agree to take on some of the financial risk in patient outcomes in order to share in the profits. Specifically, early stage investors are looking for companies with one or more of the following characteristics:
This overarching theme of smart and connected medical devices was really hit home by Dr. Eric Topol. He's been an early advocate of digital technologies in healthcare for a long time, and he was invited to give the plenary speech this year. We may be five plus years in to the digital revolution in the medical device industry, but right now feels like the tipping point. It's exciting to see such a large and regulated industry change with the times.
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