Having spent the past two days walking the exhibit hall at this year’s American College of Cardiology Conference, I got to thinking about convergence, innovation and the direction of new product development in this segment.
There’s a precedent of success for new product development that emerges from converging existing technologies, accompanied by key design improvements, that are then applied in innovative ways. The smartphone is a great example. Touchscreens, cellular technology, operating systems, digital cameras and microprocessors already existed before Apple pulled them together in an innovative way that changed the world.
What struck me about what I saw on the exhibit floor at the ACC was where and how this approach to new product innovation was being applied. Information technology, wearable updates to Holter technology, and image processing reflected a very crowded, hyper-competitive market space. Some of the imaging technology reached the gee-whiz category; augmented 3-D reality screens, and 3-D modeling generated by complex algorithms running on super computers are delivering breathtaking, new insights for planning interventional strategies long before the patient enters the Cath Lab. But for the most part, I saw an overcrowded market space of IT that was difficult to quickly differentiate.
Also present were a dozen or so highly innovative interventional device companies, but they were in the minority as compared to the cacophony of “new” software platforms that promised to streamline workflow, provide better information, etc., etc. And of course there were the multi-nationals that dominate significant market segments, as well as floor space, in the exhibit hall. I must admit, it was very gratifying to see REV.1’s product development work, front and center in the Medtronic booth (a device developed for Ablation Frontiers, which was then purchased by Medtronic) and in the Abbott booth (a device developed for Topera, which was then purchased by Abbott).
As I digested this experience on the trip home, it occurred to me how the hidden hand, venture capital, was driving innovation, or the lack thereof, within the segment. The investor crowd went “app-happy” years ago, and it was reported that in 2016, of all the dollars invested by venture capitalists in new technologies, only 2% went to A-Round medical device companies. Digital health, home health and remote monitoring is relatively inexpensive to develop and launch as compared to interventional devices; hardware technologies that actually move the needle in improving patient outcomes and lowering the cost of care. Software and apps have for years sucked a disproportionate amount of oxygen out of the venture space, but a ruthless culling will inevitably emerge.
What the venture capitalists didn’t account for was they were all running in the same direction simultaneously. The result is what I saw on the floor at the ACC. What’s interesting is this has opened up a space of unprecedented opportunity for truly innovative, interventional device companies. The next innovators that will be purchase by Medtronic, Abbott and the like.