Table of Contents
Slowing US and European Markets Demand Alignment with Global Market Needs
- While there is a positive outlook for global in vitro diagnostics (IVD), top companies face challenges such as slowing growth, increasing competition, and a changing business environment.
- Prime opportunities include pursuing the underpenetrated Brazil, Russia, India, and China (BRIC) markets; and high-growth IVD segments, such as point-of-care testing (POCT) and self monitoring of blood glucose (SMBG).
- Beyond the BRIC countries, the African IVD market holds early-stage opportunities but the market differences should be understood.
- Due to cuts in reimbursement, clinical laboratories are becoming more open to new technologies that can reduce operating costs.
- An IVD company that leverages external partners for developing cost reducing technologies may have a competitive edge.
Industry Overview and Definitions
•IVD is a $x billion market worldwide and is growing in the mid single-digits. Market revenue consists of product sales of the instruments and consumables.
•IVD are tests that can detect disease, conditions, or infections in patients. Testing occurs outside of the body on specimens like blood, tissue, or urine.
•Customers of IVD products are typically hospitals and laboratories. Customer segmentation varies according to region.
•Much of the US IVD testing volume occurs in hospital laboratories.
Key Market Principles
•The unit in this market is test volume that comes from test utilization, which is most significantly impacted by healthcare access.
•There are improving valuations for diagnostics, which is evident in the companion diagnostics segment.
•There is strong demand for segments using advanced technology like molecular diagnostics and clinical sequencing.
•Key segment trends
oThe immunochemistry segment is the largest segment and is growing more rapidly than the others.
- In previous years, growth had been driven by volume since these are routine tests and this area of the laboratory is very automated. Presently and moving forward, this segment is more and more driven by growing demand from China and other emerging markets.
oThe molecular diagnostics segment also has an impressive growth trajectory. This segment may reach the size of the POCT segment within 3 years.
Intensifying Competitive Landscape
•Tier I Companies: Roche Diagnostics, Siemens Healthcare, Abbott Laboratories, Ortho Clinical Diagnostics (J&J), and Beckman Coulter (Danaher).
•Tier II Companies: Alere, Bayer Diabetes Care, bioMerieux, Sysmex, and Becton Dickinson.
•In the period 2009–2012, Tier I and Tier II have increased their market share at the expense of other weaker competitors. The pace of consolidation is remarkable and will only continue in these challenging market dynamics.
•Further consolidation is expected in the future with M&A guided by strengthening or gaining access to new regions and customer segments.
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