The Globalization of In Vitro Diagnostics Markets

The Globalization of In Vitro Diagnostics

Markets

Winny Tan, Industry Analyst

Life Sciences

March 14, 2013

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Today’s Presenter

• Market expertise in IVD and clinical diagnostics markets in both supply and

demand sides

• Published in Genetic Engineering and Biotechnology News (GEN) and Drug

Discovery and Development (DDD)

• 6 years experience with developing marketing strategies and business plans for

medical device and diagnostics companies for Frost & Sullivan and for venture

capital groups

• 12 years of quantitative data analysis including biomedical engineering research

at UCLA

Winny Tan, Ph.D.

Industry Analyst, Life Sciences

Frost & Sullivan

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Occasion for this Analyst Briefing

• Findings from a new report on the Global IVD Market

• NC19 Analysis of the Global In Vitro Diagnostics Market: Stagnating

Local Markets Accelerate the Globalization of IVD Companies

• Update from the 2009 Global IVD study

• Major theme: Globalization of IVD companies

• Market leadership and growth

• Change mechanism within a maturing marketplace

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Poll Question

We are starting research for our next study on the Global Tissue

Diagnostics Markets that will include companies like Ventana-Roche,

Leica Biosystems (Danaher), Sakura, and ThermoFisher.

In addition to the United States and Western European regions, which

region would be the most important for your company?

1. Brazil

2. China

3. India

4. Japan

5. Other

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Focus Points

• Market size and growth for IVD market segments

• Competitive landscape and business strategy

• Impact of global demand on IVD markets

• Opportunities in ex-US markets

• ‘Second wave’ emerging markets

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Segment Size and Growth

Global IVD

Market

Molecular Diagnostics

Point-of-Care Testing (POCT)

Hematology

Self-Monitoring Blood Glucose (SMBG)

Immunochemistry

Clinical Microbiology

Hemostasis (Coagulation)

Tissue Diagnostics*

Source: Frost & Sullivan analysis.

***Market Size and Growth for Global, 2012;

CAGR 20012-2017 can be found in the latest

Global IVD study NC19

IVD Market Definition: Includes the sales of reagents, consumables, and analyzers used to perform testing outside

of the body for patient evaluation. Specimens include blood or urine and testing sites span clinical labs, hospitals,

point-of-care settings, and patient self-testing.

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Competitive Landscape 2009, 2012, and Beyond

Tier 1, 63.0%

Tier 2, 17.5%

Others, 19.5%

Percent of Sales Global, 2012

Tier 1, 59.6%

Tier 2, 15.6%

Others, 24.8%

Percent of Sales Global, 2009

2015? Few companies will control a greater portion of the market, M&A will be dictated by

disease management, and niche suppliers will face difficulty in mature markets like the

U.S. and Western Europe in the absence of disruptive forces.

Tier 1: Roche Diagnostics, Siemens Healthcare, Abbott Laboratories, J&J (Ortho Clinical), Beckman Coulter (Danaher)

Tier 2: Alere, Bayer Diabetes Care, bioMerieux, Sysmex, BD

Tier 3: Remaining market participants


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Disruptive Strategies

Defend Market Share

• Support and continue to add value to current installs

• Strengthen branding and focus on customer loyalty

Penetrate High Growth Markets

Invest in Enabling

Technologies

• Specialty diagnostics

• Emerging markets

• Platforms: Next generation sequencing and digital PCR

• Clinical biomarkers: microRNA and epigenetics

What IVD companies are NOT doing: Straying from a predetermined focus area, waiting for

certainty.

Mo

re r

isk

Disruptive

elements


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Positive Growth Driven by Ex-U.S. Markets

United States

5.6%

Western Europe

7.8%

Eastern Europe

9.8%

Asia Pacific

11.5%

Latin America

8.8%

Total IVD Market: Growth by Region, Global, 2012-2017


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Global Demand for Routine Clinical Testing Drives Growth

-

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

30,000.0

2009 2010 2011 2012 2013 2014 2015 2016 2017

Re

ve

nu

e (

$ m

illi

on

)

Total IVD Market: Revenue Forecast by Segment Global, 2009-2017

Immunochemistry

POCT

SMBG

Molecular Diagnostics

Microbiology

Coagulation

Hematology


The U.S. has only 17% of the world’s immunochemistry analyzers.

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Opportunities in Regional Markets

Market Factor Developed Markets

(U.S., Western

Europe)

Emerging Market (BRIC,

second wave)

Opportunity

Are laboratories

spending on

capital

equipment ?

Laboratory decision

makers are shifting;

laboratory consolidation

and centralization

Lack of basic

infrastructure generates

need

Public health and hospital

modernization in Brazil and

China; rural hospital segment in

China

What is the

demand for

automation?

Medium and slowing;

advanced testing is

becoming more

centralized

High for large hospitals,

but affordability is an issue

Laboratory decentralization in

emerging markets, but need

lower pricing model through

stripped down instruments

How competitive

is the market?

Maturing market,

competition is

intensifying

Affordable local suppliers,

government preference for

local manufacturers

China opening up hospitals to

outside investments; high

import rate in Indonesia

Patient access Patient management

over the course of

disease, increasing

contact

Inconsistent disease

management and cultural

factors limit patient access

Single-use devices, mobile

laboratories, leverage high

mobile device use in parts of

Asia?


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“Second Wave” Emerging Markets

Healthcare Expenditure (Global), 2010-2020

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Conclusions

• Strong evidence that supports future IVD market growth will be driven by

emerging markets.

• Entering emerging markets is an important change factor to shift maturing

market dynamics.

• Regional understanding is necessary for strategy and targeted marketing.

• Public health programs, medical infrastructure, patient access, and

socioeconomic growth are the basis for identifying second wave emerging

markets.

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For Additional Information

Britni Myers

Corporate Communications

(210) 477-8481

[email protected]

Winny Tan

Industry Analyst

Clinical Diagnostics

(650) 475-4513)

[email protected]

Jennifer Brice

Global Program Manager of Life

Sciences

Healthcare

(650) 475-4560

[email protected]

Daniel Ruppar

Director of Research

Healthcare

(210) 247-2428

[email protected]

The Globalization of In Vitro Diagnostics Markets

Health & Medicine

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