Tim McCready from BioPacific Partners spoke with healthtech multinationals about changes in the industry and why they are interested in NZ innovation.
The healthtech sector is broad, and big corporations in pharma, consumer health and medtech all have slightly different attitudes toward accessing external innovation – but they all share an increased reliance on external innovation to supplement and bolster their pipeline.
Multinational corporations can bring with them strong investment, a powerful workforce, and access to global markets for local New Zealand (NZ) innovators. But regardless of whether a partnership or investment happens or not, there are always insights to be gained from them. Even a 15-minute conversation can reveal insights that might help reshape a product to be more suitable or better accepted by the market, or perhaps adapt a business model to one that had not previously been considered.
Most of these multinationals are not embedded within the Australasian region. They might have sales and marketing teams here, but there are few business development personnel. While it can be a challenge identifying and reaching relevant decision-makers within the confusing hierarchies of multinationals, there are many reasons why it can be a worthwhile activity.
“Innovation does not have a boundary. There is no border limit, wherever there is good science, we go for it,” I was told by a business development executive at a healthtech multinational. It helps that generally these companies are positive about NZ innovation – thanks to our well-regarded education and science, robust regulatory environment, and diverse population.
“If something is making headway there, there’s a whole lot of hurdles it has overcome and it makes me think I can pick it up and run with it elsewhere,” they said.
For the pharmaceutical industry, the cost of research and development for new drugs, the high risk of failure, and the significant exposure many have due to the expiry of blockbuster drug patents means they increasingly look to external innovations for their product pipelines. If the technology fits a gap in the company’s pipeline they will be interested – and are largely ambivalent about the stage of development.
But for medical technologies this is slightly different. For traditional medical devices, multinationals will often prefer to wait until a technology has regulatory approval and can demonstrate strong sales. This is because some of the most challenging aspects of bringing a device to market are the registration of the device, and the considerable work required to convince physicians and surgeons that an innovation is worth considering (and often retraining for) over existing alternatives. Multinationals prefer to see a technology that is proven to mitigate these risks.
There has been a rapid shift in digital innovation in healthtech, and the development of technologies for a consumer market, including mobile phone sensors, smartwatches, fitness trackers, apps and the use of big data for diagnostics and treatment. This is causing huge concern in the medtech and consumer health industries about where future revenues will come from.
I was told by a business development executive in a medtech multinational: “I joke that I’m glad I am closer to the end of my career than the beginning because I’m not wired to think this way. My gut feel used to be pretty good, but I don’t have that for the future… I think it is incredibly naïve to think that technology and digital won’t fundamentally change the sector.”
The onset of digital giants entering the healthtech space has made traditional medtech multinationals nervous. They are hesitant to enter the consumer market since the big players – the likes of Amazon, Samsung, Apple, Google and Huawei – could quickly wipe out the market share of new technologies that begin to gain traction.
A business development director joked with me that “One day I will need a new hip. I’ll go onto Amazon, where there will be a base one, and then ones with extra features… I’ll select my hip, pick my doctor, choose a hospital – after checking their reviews – and take my basket to the checkout. Somebody is going to figure that out.”
Before the pandemic, these big players were reluctant to travel the 12 to 24 hours required to visit NZ and saw the significant time zone difference as a barrier. This meant that costly visits to the big conferences – the likes of the BIO Convention or The MedTech Conference – were the only places to sit down for 15 minutes with the relevant people in these companies.
But over the past year these interactions have moved online, and with it so has a growing acceptance from large corporations that new technologies can be discovered using digital platforms – no matter where in the world they might come from.