Samsung and HP: here come the techies

When you think of big players in the life sciences sector, companies such as Gilead Sciences, Pfizer and AstraZeneca might spring to mind.

But the life sciences arena is changing, and companies that you might think better placed within the technology sector are making their presence felt in, and may be set to disrupt, the industry.

According to a report earlier this year by research and development insight company PatSnap, as of April 26, technology companies Philips and HP are among the top ten most intensive filers of patents covering enabling technologies in the synthetic biology field.

Technology company Samsung was named the second most active collaborator in terms of sharing or selling patents in the same field, after US-based research and development company Agilent Technologies.

Microsoft even has an eHealth solutions platform, which includes a cloud-based health information management system.

According to the technology company, a series of factors such as clinician shortages, time and cost pressures, and increased patient needs are creating a series of challenges for health organisations.

Microsoft says that such organisations can be more “efficient, effective and productive” if better tools for information sharing and coordination are made available to them.

German-based Siemens has a Life Sciences Industry Solutions division, which it says acts as a partner in making a supply chain safer and more efficient.

Seizing the opportunity

With international technology companies entering the space and showing an interest in filing patents, it is important to understand how this could perhaps disrupt the industry for the traditional pharmaceutical companies.

Jonathan Turnbull, partner at Herbert Smith Freehills, says that one of the reasons for technology companies to invest in the sector is the opportunity it presents.

“It is a large, global sector in which significant revenues can be generated,” he tells LSIPR.

According to statistics website Statista, as of 2016, revenue generated from the global pharmaceutical market stood at $1.1 trillion.

“Healthcare spending is increasing as the global population increases in size and age, although governments are trying to implement measures to curtail the increases in spending,” comments Turnbull.

According to the UK’s Office for National Statistics, total healthcare expenditure in the UK was 9.8% of gross domestic product (GDP) in 2016. In the US, healthcare spending grew by 4.3% in 2016, reaching $3.3 trillion; this represents 17.9% of GDP.

As Turnbull points out, these figures are not directly applicable to the pharmaceutical companies as they would cover hospital expenditure and other areas of the healthcare sector.

“Within the pharmaceutical and life sciences sector, the need to demonstrate the ‘value’ of their products and services is key. It is driving the sector,” he explains.

By this, Turnbull doesn’t necessarily mean making things cheaper, but rather making things more efficient or effective, such that they lower related or follow-on costs. He says that this is reflected in the move towards personalised healthcare.

For example, this can mean increasing efficacy of developing a drug which is targeted to individuals and thereby removes the costs associated with ineffective treatment, he says. It can also mean preventing, or effectively managing or eradicating chronic diseases so that hospitalisation or ongoing costs associated with a disease are reduced or removed.

“Although the costs of initial treatment may be high, the value is delivered by off-setting this against the increased quality in a patient’s life and the higher costs of disease progression, hospitalisation, or ongoing treatment,” says Turnbull.

This demand for adding value to the industry can provide technology companies with an opportunity to offer their knowledge in achieving this common goal. Technology companies can bring a different insight into finding answers and delivering more targeted solutions.

Craig Brownlie, partner at Potter Clarkson, says that the life sciences sector offers a new commercial market for technology companies that are typically associated with the highly competitive consumer electronics and software sectors.

“Furthermore, the demand for cures and better treatments for known diseases and medical conditions provides a vast number of possible opportunities for innovation,” he explains.

Using big data

One of the key benefits of these technology companies investing and filing patents in the life sciences sector is the “significant potential” in the use of big data within the medical industry, according to Brownlie.

“For example, the real-world genetic and molecular information taken from large numbers of patients could be used to map the human body to facilitate the detection of disease,” he says.

“This information could then be used to develop preventive measures, treatments and personalised medicine.”

Turnbull agrees that there are opportunities for technology companies to collect, aggregate and analyse datasets to help develop personalised healthcare.

“It’s here that tech companies may have the biggest influence and disruption,” he says. “Many technology companies specialise in collecting, maintaining and analysing datasets, which could positively disrupt the sector. In some cases this could be achieved by technology companies using their existing datasets.”

However, this is just one of the ways in which technology players have broken into the life sciences sector.

To some extent, they have done this with the release of fitness trackers and health monitoring devices in response to increasing consumer interest in fitness and wellbeing, according to Brownlie.

For example, fitness tracker Fitbit is sold by the company of the same name, with Apple also offering different health monitoring products.

“The larger technology companies have the technical capability and resources to develop data-driven platforms,” says Brownlie.

“Coming from a different industry, they can provide a new perspective when it comes to addressing existing challenges, which has the potential to be disruptive in the life sciences sector (especially with their reputation for creativity),” he adds.

Bringing with them their own experience and knowledge in different areas, technology companies are positioned to influence the future of the life sciences sector by using their own novel approaches to solve existing medical problems and provide products and services that aren’t currently available.

“In particular, being able to detect diseases and discover new drugs more cheaply would have a substantial impact on the sector,” says Brownlie, adding that the use of artificial intelligence (AI) and neural networks may be key to achieving this.

In late August 2018, a team led by scientists at The Institute of Cancer Research, London and The University of Edinburgh announced that they have been able to use AI to predict how cancers will progress and evolve. This means that doctors can design the most effective treatment for each cancer patient.

The technique is called REVOLVER (Repeated Evolution of Cancer) and identifies patterns in DNA mutation within cancers and uses that information to forecast future genetic changes.

This is just one of the ways in which AI and machine learning can be used to propel the life sciences industry. Turnbull explains that it is being considered and used in all aspects of the healthcare and pharmaceutical lifecycle.

For example, in drug development, AI is being used to predict the best candidates for further development without undertaking the chemical or biochemical studies that are normally needed to identify these candidates, he says.

Obstacles

While there are opportunities for technology companies to turn to the life sciences sector, there can also be some obstacles.

Turnbull says that the high degree of regulation of pharmaceutical products and medical devices and the high cost of developing therapies, including clinical trial costs, need to be considered.

“These will all impact the rate and speed of return on investment and, therefore, the attractiveness of the sector to a technology company.”

But there could be wider benefits of technology companies investing in the life sciences.

“My view is that technology companies’ entry into the life sciences sector will increase innovation and competition, and be a positive disruptive force rather than one that is going to hinder innovation,” says Turnbull.

“It may also cause a change in the business models adopted in the sector and how companies look to generate revenue.”

In fact, Turnbull encourages the life sciences sector to embrace technology companies’ interest in the market.

He says that pharmaceutical companies have three options when it comes to embracing the changes brought by technology.

“One option is to grow organically by up-skilling existing employees or recruiting new employees with the necessary technological or computing skills.”

A second option is to acquire a technology company with the relevant expertise and then integrate this into the company.

“A third option is to collaborate with a suitable tech partner. As with all collaborations, whether they are effective or not will depend on all parties pursuing a common interest and a common goal, with a clearly designed and well structured partnership under which all partners understand the extent of the collaboration, their role and what they will get out of the partnership,” Turnbull says.

“This approach should result in an effective collaboration, which in many instances would be an effective option as it would allow the collaborating technology and pharmaceutical companies each to bring their expertise to the table and capture the mutual benefits of their different perspectives.”

Turnbull warns that some difficulties may arise if the technology and pharmaceutical companies do not clearly understand the other, particularly as the product development and sales process in each of these industries is very different.

“As with all partnerships, you have to know and understand your partner really well and make sure it’s a good fit. Clear communication is key,” he adds.

While big technology companies may not immediately spring to mind when you think of leading players within the life sciences sector, their influence so far may suggest some disruption is on the way.

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