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  • Alex Hattaway

JPM23: Big data, staffing shortages & M&A slowdowns, oh my! Trends at the top of medtech execs minds

CEOs from Biobeat, Foundation Medicine and iRhythm pointed to the massive amounts of data now available to patients, physicians and drug and device developers as a huge opportunity in healthcare.

The medtech industry is evolving more quickly than ever, spurred along by lessons learned from the COVID-19 pandemic, an increasingly digital-friendly patient population and tech developments that are bringing artificial intelligence, augmented and virtual reality and other once-futuristic concepts firmly into the present.

That rapidly shifting landscape has created an especially Darwinian environment, one in which only the most adaptable, accessibility-minded and technologically advanced companies survive—while their less successful peers are plagued by layoffs, plummeting revenues and slipping stock prices.

In interviews with Fierce Medtech during the J.P. Morgan Healthcare Conference in San Francisco last week, leaders from several of those still-thriving companies shared the industry trends they’re keeping an eye on in 2023 and beyond.

First, the bad news: Healthcare staffing shortages that first cropped up during the pandemic have continued to deepen, putting pressure not only on hospitals but also on the companies that make lifesaving devices for them, according to Axogen CEO Karen Zaderej.

“Staffing is still a challenge, and it probably will continue to be for hospitals; it’ll extend beyond 2023, but at least things are more predictable now,” Zaderej said. “That will impact all of medtech where procedures are done.”

For example, as Quentin Blackford, CEO of iRhythm, explained, shortages of nurses and other critical healthcare staff have created “challenges for the patient to get seen as frequently as they would have historically, or as quickly.”

Those challenges have in turn created an opportunity for medtech companies that are able to offer their products to patients without requiring them to set foot in a healthcare facility—as iRhythm has done with its remote patient monitoring devices.

“A physician can prescribe the product right over the phone, we can send it to a patient’s home, and they can apply it there,” Blackford said, adding, “I think a continual move toward the virtual care setting is something that’s going to continue to play out and is going to be necessary to address the capacity challenges.”

Also top of mind for many medtech leaders is the current economic market with its bearish attitude and, consequently, slowed rate of investments, acquisitions and other major money moves.

But that doesn’t mean M&A has come to a complete halt: Dexcom CEO Kevin Sayer said he’d heard “rumors” that some big medtech companies are “about to become big acquirers and go spend their money”—though this year’s JPM conference didn’t produce its usual flood of acquisition news.

“With respect to deal flow, there are rumors that deals are happening,” Sayer said. “But usually, stuff starts happening Monday, and I didn’t hear any deals unveiled—so we shall see.”

As those deals do trickle through, Darius Shahida, the strategy and business development chief at Butterfly Network, predicted they’ll largely center on medtech giants taking advantage of the current financial tumult to bulk up their portfolios.

“In light of the market volatility, large, cash-rich, incumbent players are going to look to consolidate and pick up disruptive, innovative technologies—frankly, at very attractive valuations,” Shahida said, noting that that fundamental “mispricing” will then have to be rectified “either through M&A or through execution and the realization of the value that the companies have.”

Finally, several of the medtech CEOs interviewed pointed to the massive amounts of data now available to patients, physicians and drug and device developers as a huge opportunity in healthcare.

Biobeat, for one, is capitalizing on that opportunity: Not only has the Israeli startup developed the first cuffless blood pressure monitor cleared by the FDA, it’s also now regularly approached by other companies looking to make use of the vital sign data captured by its smartwatch and adhesive patch, CEO Arik Ben Ishay said in an interview.

“The conception that patients will stay on the couch and take vital signs all day so that you will have data for your platform—it’s not working,” he said. “So, what we’re seeing is companies that come to Biobeat and say, ‘We need an end-to-end solution. We need one single device that the patient needs to wear, and the data will upload automatically to the cloud.’”

The next question, then, is how other medtech companies can make use of those data dumps, regardless of where or how they’re acquired.

“We’re going to be doing a lot more early research on figuring out how to make better use of the data assets that we have, because for the last five, 10 years, it’s been all about acquiring data sets. Now, we’ve got all this data, and it’s like, well, what can we learn from it?” said Brian Alexander, CEO of Foundation Medicine. “So I think the way that we learn from data has to evolve.

Blackford expressed a similar sentiment: The company has collected more than 1 billion hours of heartbeat data, he said, and is now aiming to delve into that information to look for indicators of other diseases.

“What can we learn when we connect different disease states together? I’m a big believer that with the heart and the electrical signals of the heart, everything impacts the heart in some way—like diabetes, it shows up in the electrical signal in the heart,” Blackford said.

“I love that, because I think as we start to connect our data sets to other disease states, we’re going to find some really interesting things in cardiovascular related to these other adjacent spaces,” he added.

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