The keys to digital healthcare success
The perceived opportunities in digital healthcare are generating considerable excitement about the investment prospects for the sector and the prospect of a boom in innovations, acquisitions and perhaps even completely new types of business partnerships.
 
Over the next 18 months, 92 percent of the life sciences companies and 96 percent of the technology companies we surveyed report that they plan to increase their investment in digital healthcare.
 
Increasing investment Both sectors agree on digital healthcare’s investment potential: 48 percent of technology companies said they expected a significant increase, and 48 percent a moderate increase in their overall investment in digital healthcare. Meanwhile, 42 percent of life sciences companies planned a significant increase in investment, and 50 percent a moderate one.
 
However, they differ slightly on the best routes for entering and succeeding in digital healthcare. The vast majority of technology companies said their strategy will be driven by creating new proprietary products and acquiring others in development.
 
In contrast, 55 percent of life sciences companies placed the highest priority on partnering as a route to entering and succeeding in digital healthcare. This is interesting given that 44 percent of life sciences companies viewed technology companies’ entry into healthcare as a threat. Life sciences companies ranked creating new products and acquisitions second and third almost equally: 52 percent and 50 percent, respectively.
 
High valuations won’t stop M&A As digital healthcare enters the mainstream, this could prompt a new wave of M&A for companies that are no stranger to the deal-making table. More than half of our survey respondents saw M&A as an attractive route for entering and succeeding in digital healthcare, despite the fact that 88 percent of respondents believed that digital healthcare companies are significantly or moderately overvalued.
 
Even companies that think these assets are overvalued still want to be involved in developing technologies that can contain healthcare costs, collect enormous quantities of data, measure patient outcomes and deliver more effective solutions.
 
Leslie Morioka, a White & Case Intellectual Property partner, says client feedback about digital healthcare innovators is largely positive. “This is a real sea change in healthcare. Everyone is trying to come up with new ideas and new ways of doing things. The digital healthcare company that successfully takes us to the next step can dramatically improve results for patients while gaining a competitive advantage.”
HEADLINES
92% of life sciences and 96% of technology companies plan to increase their investment in digital healthcare Lack of awareness among patients and consumers is seen as the biggest practical obstacle to the broader use of digital healthcare services and devices Most companies see the creation of new, proprietary products as the best route for entering and succeeding in digital healthcare ​55% of life sciences companies see partnering as the best route for entering and succeeding in digital healthcare 63% of technology and 50% of life sciences companies see M&A as an attractive route for entering and succeeding in digital healthcare, though 88% of them say digital healthcare assets are overvalued
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