Computer Aided Detection – Exploring New Realms of Clinical Applications

Kaavya Karunanithi, Research Associate

HealthcareHealthcare

September 8, 2011

Evaluation of

Implementation of Strategies

Today’s Presenter: Kaavya Karunanithi

Functional Expertise•Market research in the Medical Imaging sector•Competitive analysis and benchmarking skills•3 years of research experience in various sectors of biotechnology, biomedical and biomaterials engineering

Industry Expertise•Knowledge of various Medical Imaging and devices sectors in the European market•Authored various market insights and research services in the medical imaging sector

What I bring to the team•Novel outlook at the market perspectives

2

Generation of Opportunities & Strategies

Evaluation of Opportunities & Strategies•Technical expertise and skilled analytics

Career highlights•Co-authored articles in international peer reviewed journals•Worked on cloning and characterization of BCAS and OCIAD genes in Indian Institute of Science •Worked on cloning and characterization of HCN 4 genes at Dr KM Cherian tissue engineering institute•Worked on design and optimization of coils for cerebral aneurysms using computational fluid dynamics principles at Australian School of Advanced medicine•Member of Association of Professional Engineers, Scientists and Managers, Australia (APESMA)

Education•Masters in Biomedical engineering, University of Sydney, Sydney, Australia•Bachelor of Biotechnology, SRM university, India•Business English Communication (Cambridge University)- certified

KAAVYA KARUNANITHIResearch Associate-Healthcare

Frost & Sullivan, EuropeChennai, India

Focus Points

� Market overview

� Supply chain analysis

� Industry challenges

� Market drivers and restraints

� Market forecasts

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� Market forecasts

� Geographic trends

� Competitive analysis

� Strategic recommendations

Market Overview

CAD software constitutes a set of algorithms, which

by using the technique of pattern recognition, aides

the radiologist in detecting potentially diseased

•CAD has long since left behind its branding as a

supplement tool and has now widened its application

areas. It is now a valuable tool for detection and

diagnosis of various types of cancer.

This European CAD market is in its early growth stage

and is highly dependent on its corresponding imaging

modality market dynamics for its market penetration.

4

the radiologist in detecting potentially diseased

regions and lesions. This is done by using clinical

images obtained from various imaging modalities as

a platform.

With increasing use of CAD software for various

diagnostic applications of oncology, the market can be

described as highly specialized, competitive and

dynamic with considerable growth potential.

A unique feature of CAD market is the OEMs that

incorporate CAD solutions into their modalities

have a huge role to play in determining the market

dynamic parameters, along with CAD suppliers.

Market Scope

Product segmentation Geographic scope

CAD

Breast CAD

Chest CAD

GermanyUnited Kingdom

5

Chest CAD

Colon CAD

Prostate CAD

Liver CAD

Bone CAD

Benelux France

Spain

Italy

Scandinavia

Technology and Market Trends

• The European CAD market will have increasing growth

rates as the need for digitization and highly automated

integrated workflow will increase with widening clinical

applications of CAD and development of multimodal

imaging solutions.

• The commercialization of investigational CAD

applications will lead to new entries in the market

thereby expanding the product portfolio available in

terms of technologically superior variants such as Medic

RISDemographic

reports

Imaging Modality

6

terms of technologically superior variants such as Medic

sight's colon CAD 4.0. The increased competition may

also result in price fluctuation.

• There is a need for large scale clinical studies validating

the competence of CAD products. This will aid in its

widespread penetration throughout Europe.

• The market is expected to grow steadily during the

forecast period. Newer segments like chest, colon,

prostate, liver and bone will have an increased percent

revenue contribution to the total CAD market of Europe.

CAD

Diagnostic Imaging

workstation

Image Storage

Online Image

storage

Off line Data recovery back up

Source: Frost & Sullivan

Market Adoption Trends

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

United Germany France Spain Italy

ScandinaBenelux

•From the graphical representation we

can see that there has been a steady rise

in the number of cancer incidences

reported for the past 5 years.

•Germany, France, Spain and Italy has

the highest compound annual growth

rate of cancer occurrence.

•Breast, prostrate and colon cancer

along with coronary artery disease acts

7

CAGR of cancer incidence for

2005-2010 in %

1.3 1.6 2.9 2.6 3.3 0.1 1.6

United

KingdomGermany France Spain Italy

Scandina

via Benelux

Compound annual growth rate of reported cancer incidences (Europe), 2005-2010

along with coronary artery disease acts

as the single largest cause of death in

Europe according to the report published

by European Union.

•This has in turn increased the need for

early detection of the mentioned

conditions by using various

prognostic/diagnostic measures like CT,

MRI and US scans, which incorporate

CAD modality within them.Source: Frost & Sullivan

Healthcare Expenditure Overview - Europe

BeneluxScandinavia

Spain

Italy

FranceGermany

United Kingdom

0.0

10,000.0

20,000.0

30,000.0

40,000.0

50,000.0

60,000.0•A number of large scale multi

centric clinical trials are being held

for validating the efficiency of

established CAD regimes namely,

breast and colon CAD.

•The results of these studies

indicate a 15 to 40 percent

reduction in the cancer mortality

rate.

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0.0

0.0 1,000.0 2,000.0 3,000.0 4,000.0 5,000.0 6,000.0

H ealthcare expenditure per capita $

rate.

•Additional short term clinical

studies on newer clinical

applications of CAD including

bone, prostate and liver offer

promising results which imply

CAD as a robust diagnostic tool in

the early detection of cancer.

Due to increased prevalence of cancer, European countries have and are continuously increasing their percent GDP spent on cancer prevention and regulation.

This is evident from the healthcare expenditure per capita data given above.

Source: Frost & Sullivan

Geographic Trends

• Numerous nationwide screening

programs for detection of breast cancer

using digital mammography techniques

which incorporate CAD along with

colon cancer screening programs are

already in place in most of the

European countries like the United

Kingdom, Germany, France etc.

• NHS has recently introduced an

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• NHS has recently introduced an

informed choice, Prostate cancer risk

management program based on the

results of the European Randomized

Screening for Prostate Cancer (ERSPC)

study.

• Informed choice programs for low dose

helical CT scanning for lung cancer has

been introduced in France and Benelux.

CAD Manufacturer

Alliances

rers

Alliances with OEM Manufactu

rers

Distributors

Direct Sales/Web services

•The supply chain for the CAD industry in Europe is

versatile in nature.

•There are absolute standalone workstations or CAD

integrated with the imaging modality. A fair share of market

participants have started offering web-based services of

CAD solution.

•CAD solutions of non Europe-based manufacturers is sold

through regional distributors. Some of the CAD

manufacturers like iCAD and EDDA technologies have

strategic alliances with the OEMs, which involve in selling

the third party CAD software as a part of their imaging

modality.

•The larger OEMs like GE and Siemens also integrate their in

Supply Chain Analysis

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,

End Users (Hospitals

and Clinics)

•The larger OEMs like GE and Siemens also integrate their in

house CAD algorithms into their CT and MRI scanner.

•The newer trend of web-based services and pay-per-use

model is gaining acceptance with the users as they get to

have a say in the customized payment model.

•In future, we can expect an increased preference for this

mode of distribution. At the end of forecast period, this shift

will be evident. Nevertheless the standard procedure of sales

through software distributors and integrated workstations

will also be practiced. Source: Frost & Sullivan

Ambiguous reimbursement patterns affect the adoption rate of the technology

Need for large-scale clinical studies validating the efficiency of CAD procedures

Industry Challenges

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Industry Challenges

Ambiguous reimbursement patterns affect the adoption rate of the technology

Dynamic market state, in terms of technology and competition, demands

continuous evolution of its products

Inhibition of radiologists against CAD utilization and shortage of resources and

trained personnel

Market Drivers and Restraints

Very High Growth Impact

Increased prevalence and

awareness of

cancer and coronary artery

disease

High Growth Impact

Commercialization

of investigational

CAD areas

Growth and performance of CAD

software manufacturers have greater

12

Low GrowthImpact

Medium GrowthImpact

High cost of solution

and a highly

competitive market

induces price war

Urgent need for a

high number of white

papers and

publications

validating efficiency

Transition to Electronic

Health Records (EHR)

dependence on larger OEMs

DRIVER RESTRAINTSource: Frost & Sullivan

Product Lifecycle Analysis

Chest CAD

Early majorityInnovators Early adopters Late majority

Ad

op

tio

n

Laggards

Breast CAD

13

Colon CAD

Bone CAD

Prostate CAD

Time

Ad

op

tio

n

Source: Frost & Sullivan

Liver CAD

Market Parameters and Forecasts

Average price per unit

$50,000-$150,000

Number of competitors

(2010)

17+

7 9 . 0 %

14 . 4 %

3 . 5 %1. 6 %1. 0 %0 . 5 % Per cent revenue

contribution by segments

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Source: Frost & Sullivan

R&D Spend as a Percent of Market Revenue

6%Marketing Spend as a Percent of Market Revenue

4.5%

$150,000

2010 2017

$234.8 M

$822.7 M

CAGR (2010-2017) 20.7%

Breast Chest Colon

Prostrate Liver Bone

Competitive Analysis

Tier 1Competitive Factors

-Product portfolio width

-Geographic presence

-Price

•Siemens

•Philips

•GE

•iCAD

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Tier 2 & 3

-Price

-Business Model

- Vendor Relationship

•Medicsight

•Sectra

•Riverain

medical

•Medipattern

•Median

•EDDA

•im3D

•Confirm

Widening the scope of clinical applications to all areas of oncology and cardiology is a key technological trend.

Chest CAD solutions is likely to have exponential growth in the next 3-4 years. Prostate CAD

will also be a high growth rate segment. Heavy marketing of bone CAD and slow growth of

colon and liver CAD will be observed.

Strategic Recommendations

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CONCLUDING

POINTS

Need for digitization and automated integrated workflow processes will act as major drivers for

market. Large scale, long-term clinical studies and white papers will be needed to prove potency in

CAD’s newer segments.

Germany, UK and France are big markets for chest and prostate CAD. Scandinavia and Benelux will have a

high adoption rate in terms of emerging segments of CAD; and Spain and Italy will continue to contribute to

colon CAD’s revenue. Breast CAD will have a uniform penetration rate throughout Europe.

Mammo CAD is likely to reach a steady growth rate and will reach the pinnacle in terms of

adoption, whereas breast MRI and ultrasound CAD is here to grow.

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Kaavya KarunanithiResearch Associate - Medical Technologies Healthcare+91 44 6160 6666Kaavya.karunanithi@frost.com