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Feeding the Future: How Plant-Based Pet Food Is Shaping a Greener Bowl by EOS Intelligence
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Feeding the Future: How Plant-Based Pet Food Is Shaping a Greener Bowl

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Over the past few years, the plant-based pet food market has been witnessing rapid growth due to pet humanization. As the market becomes increasingly competitive with many new brands and larger players, companies compete using innovative differentiation strategies to secure market share. By leveraging novel protein sources and innovative product formulations, brands look to enhance their product quality to gain an edge. Some brands focus on eco-friendly and sustainable practices to align their products with ethically-driven consumers. Others strive to optimize production processes to reduce costs and stay price-competitive.

According to Future Market Insights, the global plant-based pet food market was US$27 billion in 2024, with a growth forecast of a CAGR of 7.5% from 2024 to 2034. Vegan dog foods are some of the most common plant-based pet foods.

American and British companies overwhelmingly dominate the market. The leading players in this segment include Petaluma (USA), V-Dog (USA), Wild Earth (USA), PawCo Foods (USA), Omni (UK), The Pack (UK), and Benevo (UK). Other large players include Halo (USA), Nestlé Purina (USA), Mars Petcare (USA), and Hill’s Pet Nutrition (USA).

Plant-based dog food brands innovate with new protein sources

Creating products from protein-rich plants

One of the most critical components of a dog’s diet is protein. To compete with traditional animal-based dog foods, many vegan dog food brands focus on creating protein-rich formulas that match the nutritional profile of meat proteins. These products compete by combining and utilizing various plant proteins from sources such as peas, potatoes, lentils, and chickpeas.

Addressing the taurine deficiency in legume proteins

However, these plant proteins are often legume-based and deficient in taurine, an essential amino acid that dogs need in their diet. Some research studies claim that taurine deficiency increases the risk of dilated cardiomyopathy (DCM), a heart disease in dogs.

As more companies enter the vegan dog food market, brands try to differentiate their offerings by introducing more non-legume protein sources to offer a complete amino acid profile and address DCM issues in dogs. More and more vegan dog food formulations use ingredients such as quinoa, chia seeds, yeast, algae, and hemp. For example, US-based Wild Earth uses yeast-based plant proteins in its products such as Wild Earth Maintenance Formula and Performance Formula to create a more balanced dog diet.

However, incorporating these specialized ingredients raises costs due to complex production processes, and this results in products’ high-end prices. For instance, an 18-pound (about 8.2kg) bag of Wild Earth’s performance formula food costs the consumer US$99, about US$5.50 per pound. On the other hand, a 20-pound (about 9.1 kg) bag of US-based Open Farm’s Kind Earth formula, which does not use a special protein source, costs only US$72.99, about US$3.65 per pound.

Feeding the Future How Plant-Based Pet Food Is Shaping a Greener Bowl by EOS Intelligence

Feeding the Future: How Plant-Based Pet Food Is Shaping a Greener Bowl by EOS Intelligence

Innovation beyond protein sources also drives competition

Along with high-protein formulation, players compete through various advancements, including product formulation, ingredient sourcing, and catering to specific dietary needs.

Formulating nutritionally complete products

To ensure nutritionally complete offerings, companies are enhancing their plant-based dog foods with high-quality proteins, vitamins, minerals, and fatty acids. For example, the American company Natural Balance utilizes brown rice, oats, barley, peas, and potatoes as the primary sources of protein and carbohydrates in its Vegetarian Formula. The product is enriched with taurine and l-carnitine amino acids, along with antioxidants from spinach, cranberries, and dried kelp.

Innovating in more appealing flavors and textures

In an attempt to make their products stand out, many plant-based pet food companies incorporate enriching flavors such as peanut butter, carrots, berries, and quinoa to make their products appealing to dogs. For instance, Open Farm’s Kind Earth plant-based kibble includes ingredients such as barley and fava beans, aiming to provide a nutrient-dense and palatable meal.

Apart from diverse flavors, texture innovation is an important competitive factor. Companies attempt to develop products with a meaty and fibrous texture that carnivore pets prefer. For instance, US-based Petaluma introduced Sweet Potato Jerky treats, a plant-based alternative to traditional meat jerky, made from sweet potatoes.

Addressing specific health concerns

Many vegan dog food brands also incorporate more functional ingredients to target specific health issues in dogs. Some vegan dog food brands offer grain-free and gluten-free options for dogs with allergies or grain sensitivity. An example of this is the British Benevo Adult Dog Food brand that offers wheat-free products catering to dogs with grain sensitivity.

Some companies provide formulas rich in probiotics and fiber to support healthy digestion. For instance, American Halo Holistic enriches its plant-based dog foods with prebiotics, probiotics, and postbiotics for complete digestive health and immune function.

To address dogs’ health concerns and enhance the competitiveness of their products, some companies enrich their foods with targeted ingredients. A case in point is another British brand, Omni, which formulates its vegan dog food with glucosamine, curcumin, and turmeric – ingredients that support joint structure and mobility in dogs.

Some brands also try to add calming ingredients to address stress and anxiety issues in dogs. For instance, Petaluma uses chamomile and lavender to reduce agitation in dogs.

Brands that prioritize pet health distinguish themselves by aligning with owners’ unwavering focus: ensuring their pets’ lifelong well-being. This strategy delivers a measurable competitive edge — reducing long-term veterinary expenses, building durable trust through proactive care, and fostering customer loyalty. Collectively, these outcomes create a self-sustaining advantage, positioning brands as partners in pet care while raising barriers for competitors lacking similar commitment.

Developing hybrid diets for flexitarian consumers’ pets

Recognizing the flexitarian trend among pet owners, companies are exploring hybrid diets that combine plant-based and traditional meat-based foods. This approach caters to consumers seeking to reduce meat consumption without fully committing to a vegan diet for their pets. ProVeg International, a food awareness organization, recommends designing products suitable for flexitarian feeding practices, as a way to attract a broader customer base and increase sales by pet food companies.

Brands differentiate by focusing on fresh, instead of processed, foods

Kibble and canned food are the most prevalent forms of dog food. Currently, most vegan dog brands offer dry foods in the form of kibbles and treats. However, the process of producing kibble involves extruding ingredients at high temperatures, which might destroy essential nutrients in a dog’s diet. These foods can also contain excessive preservatives to extend shelf life and fillers to bulk up to the product, compromising their nutritional value and making them less suitable for a dog’s long-term health.

As awareness of this grows, players are strategically expanding their focus to adopt gentle production methods, offering minimally processed meals from fresh (and sometimes organic) ingredients. For instance, UK-based Bramble and US-based start-up PawCo Foods offer oven-baked fresh meals. The oven-baked slow-cooking process allows easy digestion with better nutrient availability for the dog’s optimal health. A few brands also use organic ingredients in their product formulations to attract consumers. For instance, Petaluma uses about 50% organic ingredients in its dog food.

Plant-based fresh meal options are still not common, thus providing these companies with a competitive advantage in this highly competitive industry.

However, fresh, unprocessed meals and organic ingredients can be considerably more expensive than conventional kibbles and other vegan pet foods. Furthermore, fresh vegan meals are less available in comparison to popular kibbles. Due to the high prices and limited distribution, many consumers may struggle to maintain these pet meals over the long term. Consequently, players pursuing this strategy may face strong competition from other vegan dog food brands that might offer better distribution and price their products more affordably.

Companies use sustainability to attract ethically driven consumers

Several vegan dog brands emphasize their environmental commitment to attract pet owners with ethical and sustainability values. These companies advertise practices such as eco-friendly packaging, ethical sourcing, advanced production processes, and lower carbon footprint.

For instance, Petaluma promotes itself as a green vegan dog food brand, catering to pet parents who prioritize sustainability. The company regularly publishes the products’ lab results and sustainability practices on its website. In addition, it offers its products in attractive compostable packaging with graphics that illustrate dogs and humans working together to achieve a better planet.

While emerging companies and smaller brands use the sustainability approach to gain customers’ attention, more prominent brands might struggle to justify their eco-friendly claims. These popular brands have a broader range of traditional (and cheaper) products that they produce using less sustainable processes. When these companies promote their plant-based pet food products, environmentally conscious pet owners might perceive them as capitalizing on the growing demand without genuine environmental commitment. Consequently, pet owners may view these larger brand products as examples of greenwashing and dismiss their sustainability claims.

Plant-based food brands use diverse strategies for price competitiveness

Plant-based pet foods are mostly pricey due to several factors. These products are still niche and produced primarily by smaller companies with limited sourcing and production capabilities, factors that increase costs.

Additionally, these foods use high-quality, complex plant ingredients, involving extensive research, development, and testing, to ensure nutritional completeness. The high prices may prevent customers from buying these products.

Offering subscription models to make products more affordable

Currently, many companies provide subscription-based purchases associated with discounts to offer more affordable options to customers. These options allow the companies to lock customers for a long time, creating recurring revenue streams.

Using direct-to-consumer models to build trust and loyalty

Vegan dog foods are not mainstream yet. Companies in this space, especially smaller firms, use e-commerce sites and online pet retail platforms to increase their brand visibility and reach. However, over recent years, they have increased the use of direct-to-consumer models where companies sell directly to customers through their websites.

Unlike online retail platforms, this model allows companies to gain more control over product pricing and achieve better profit margins without having any middlemen involved. Several companies offer customized vegan meal plans that they tailor to the dog’s age, health conditions, and dietary preferences. This model allows companies to foster a direct consumer relationship, thus building trust and loyalty.

Introducing process optimization to reduce production costs

There is also an increasing instance of smaller brands collaborating with larger companies to lower production and distribution costs. A few companies have started exploring innovative technologies to increase efficiency and lower production expenses. For instance, PawCo is leveraging AI to test its products’ palatability and to streamline simulation and production processes.

While smaller companies undertake various internal efforts to reduce product costs through process optimization, these companies might still struggle to compete with larger brands to provide affordable plant-based pet foods. Large companies offer vegan pet foods at affordable prices due to their strong brand presence, financial resources, and versatile distribution networks.

 

Read our related Perspective:

Pet and Animal Health M&A: What’s the Scoop on the Industry’s Latest Shake-ups?

Plant-based food for cats poses greater challenges

While plant-based dog food is becoming more common, developing vegan cat foods is more challenging. Cats are obligate carnivores, meaning their nutrition relies primarily on animal-based meat. Cat owners have been skeptical about the nutritional profile of vegan diets. This makes them less willing to embrace such options for cats compared to dogs.

This creates an opportunity for players to innovate and compete in targeting cat owners. Some companies have been exploring solutions such as cultivated meat as an alternative to plant-based meat foods. For instance, Meatly, a UK-based start-up, has been exploring meat cultivation for cat food using cells from chicken eggs. While costly in R&D, this innovation could tap into a large market segment, offering cat owners more choices.

EOS Perspective

Health and sustainability will drive market growth in the West

While North America currently leads the market, Europe is not far behind and will likely experience significant growth in the coming years. Pet owners in the USA and Europe have been actively looking for plant-based pet foods that offer improved health benefits including oral, skin, joint, digestive and immune health.

Furthermore, there has been a growing demand for sustainable pet food products in these regions. Many pet owners are willing to pay high prices for vegan pet foods that promise minimal environmental impact and improved pet health.

Players in the Western plant-based pet food markets who are most likely to succeed will be those who effectively combine innovation, customization, sustainability, and consumer trust.

Asia-Pacific will be a rising frontier for players with localized strategies

Although the Asia-Pacific region lags behind North America and Europe in demand and availability of such products, it is poised for steady market growth. Key drivers mirroring Western trends, such as heightened pet health awareness, rising disposable incomes, and the growing appeal of veganism, are gaining traction across Asia.

The Asia-Pacific region’s diverse dietary and cultural preferences present both challenges and opportunities.

In recent years, some international plant-based pet food companies have entered Asia-Pacific, often forming partnerships with local retailers and pet food companies. For instance, in 2020, American V-dog launched its first plant-based pet food through Whole Foods, a major wholesale distributor in Japan. Such collaboration with Whole Foods, a reputable distributor, likely provided V-dog with strong market visibility and credibility. This entrance can serve as a strategic blueprint for other players aiming to expand into the region.

The region’s diverse diets and ingredients demand that companies tailor products to local preferences, such as incorporating sweet potatoes and seaweed in Japan. By aligning with these preferences, players can effectively navigate varied consumer demands. Those who can achieve that are better positioned to build relatability and trust with consumers, ensuring sustained long-term growth. A one-size-fits-all approach, or directly transplanting Western products into the regional markets, is unlikely to succeed.

The surge in online shopping across Asia-Pacific offers a significant opportunity to bypass traditional retail markups and reduce costs for consumers. Online platforms offer good growth avenues for brands that know how to strategically leverage e-commerce channels.

Asia’s price sensitivity will require careful threading

Price sensitivity will remain a critical factor and a barrier in this region, especially in developing economies such as India and China, where affordability often outweighs premium positioning. Here, players must adopt localized pricing strategies that cater to local economic conditions.

This can include offering smaller, budget-friendly packaging that can make plant-based pet food accessible for middle-income households. Hybrid products (combining plant-based and traditional ingredients) can serve as a cost-effective entry point for price-conscious consumers.

Subscription models, bulk discounts, and tiered pricing are good strategies for keeping product pricing accessible and relevant across diverse income levels. Tiered pricing, in particular, works well in markets with wide income disparities: simple formulations and no-frill products for budget-conscious consumers, enhanced formulations for middle-income buyers, and advanced formulations with premium ingredients for the high-income pet owners.

The regional markets also require investments in promotional campaigns, loyalty programs, and value-added offers that can further improve affordability and perceived value.

Brands that strike a balance between quality and affordability will likely appeal to a broader consumer base, ensuring deeper market penetration and success in the region.

 

China's Medtech Volume-Based Procurement Big Savings, Bigger Challenges by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

China’s Medtech Volume-Based Procurement: Big Savings, Bigger Challenges

China’s phased rollout of Volume-Based Procurement (VBP), which started in the pharmaceutical industry in 2018, quickly expanded to the medical devices market in 2019. VBP standardizes medical device prices in China, fosters medtech innovation, makes medical consumables more accessible, and reduces healthcare expenses for both patients and the government. The program is doing this by granting high-volume sales to medical device manufacturers, offering the lowest prices across the city, province, or country level, depending on the tender type.

VBP policy follows the Healthy China strategy

In September 2021, the National Healthcare Security Administration, a governmental body responsible for funding public healthcare in China, made its 14th five-year plan (FYP), including the years from 2021 to 2025. China’s 14th FYP has laid down a Healthy China strategy that aims to improve social conditions, including healthcare in the country.

China has struggled with costly and uneven healthcare access between urban and rural areas, contributing to poverty, primarily in rural regions. Poverty due to illness affected around 20 million people, or 44.1% of the poor population in 2015, according to the National Health Commission. Other challenges include a hike in noninfectious diseases due to poor lifestyle habits and an increasingly aging population.

The 14th FYP aims to mitigate these challenges by improving the affordability and accessibility of healthcare services in China by 2025. China will achieve this through various policies, including public hospital reform and equal access to essential public healthcare services.

The Chinese government rolled out VBP, or competitive tendering of medical consumables, to achieve the 2025 target of 80% of hospitals’ expenditure to go through the provincial tendering process across several device categories.

China's Medtech Volume-Based Procurement Big Savings, Bigger Challenges by EOS Intelligence

China’s Medtech Volume-Based Procurement Big Savings, Bigger Challenges by EOS Intelligence

VBP has had a tremendous impact on many medtech players in China

Between 2019 and 2021, the top 10 producers of high-value medical consumables in the Chinese market participated in VBP tenders at the provincial level with a nearly 70% median reduction in the prices the manufacturers offer under the tender.

The average price reductions on medical devices such as coronary stents, joint replacement systems, spinal and orthopedic products, and total knee replacement systems were cut by 95%, 82%, 84%, and 84%, respectively.

With these significant price reductions, VBP rippled through the medtech sector, affecting companies in many ways and forcing them to rethink their strategies to compete more effectively in China.

Declining revenues

The introduction of VBP has adversely affected some of the leading medtech companies, resulting in a downturn in their revenues in China. These medtech companies aimed to mitigate the impact by reducing costs and discounts. The impact of VBP on the world’s largest medical device maker, Medtronic, caught the attention of the medtech community due to the company’s considerable presence in China. The company’s Q3 2022-2023 earnings call reported that sales declined drastically due to VBP. Medtronic’s most impacted business lines included the surgical division, cardiac ablation solutions, and neurovascular lines. According to estimates, VBP affected 80% of Medtronic’s product portfolio in China. As a response, the company reduced its marketing, selling, administrative costs, and discounts. However, by Q2 2023-2024, the company said it would work through the impact due to China VBP by the end of FY 2024.

VBP has also negatively affected other foreign medtech companies, such as Alcon in China. Alcon’s exposure to China is about 5% of the company’s sales, predominantly in the surgical division. Alcon is likely to witness the impact of VBP in FY2024, ending in March 2025. Since the rollout of VBP takes place on a province-by-province basis, an abrupt fall in sales is highly unlikely in Alcon’s implants segment.d

The introduction of VBP has unfavorably impacted domestic medtech companies manufacturing intraocular lenses (IOLs) in China. Local player Airui Technology decreased its price of IOLs by as much as 65%.

Pressure on resource availability

National-level VBP tenders in China are usually finalized and awarded quickly. For instance, a temporary alliance of 22 (out of 23) provinces issued a competitive tender for liver function tests (LFTs) in November 2022. This tender’s result was published on December 30, 2022.

Compared to biopharma players, an idiosyncratic challenge for medtech companies is the need for a considerable amount of resources to be readily available when tenders occur. These resources must be strategically deployed to facilitate responses to tenders that are issued on short notice and awarded quickly and frequently. This is particularly challenging when bidding for regional or provincial VBP tenders that occur more frequently than national tenders, as many provinces in the country award contracts at different times.

Market exits

Although in the minority, some companies opted for more extreme measures. A few of them decided to withdraw from the Chinese market. For example, in March 2023, US-based Zimvie disclosed its intention to withdraw its spine business from the Chinese market following the challenges caused by the VBP roll-out.

Medtech companies have adapted amidst tough market conditions

Medtech companies faced pressure to lower prices, adjust their market and segment entry strategies, and optimize their workforce. These strategic changes aimed at mitigating the impact of lower revenue and profit margins on their existing product lines.

Staffing and organizational changes

Many medical device manufacturers that have encountered significant price reductions have responded by either reducing their workforce to manage expenses or by maintaining only managerial roles to focus on distribution in markets outside of VBP. Similarly, some medtech companies that witnessed moderate price cuts streamlined their field force to better align with the future servicing needs of their customers, including hospitals.

Other staffing and organizational changes include freezing hiring, outsourcing technical service jobs to third-party providers, and consolidating multiple product-focused teams into a single team.

Business model alterations

Some MNCs, including in-vitro diagnostics (IVD) companies, have changed their business model and leveraged partnerships with local medtech players to develop products. This strategic move will likely attenuate margin pressure by utilizing the local medtech partner’s cost advantage. Another advantage is that in-licenses or combined medical device development will likely counteract revenue stream losses.

IVD players are increasingly partnering with local medtech players to minimize the risk to their business model due to VBP, increase profit margins, expand their revenue streams, and continue to have sustainable relationships with hospitals. For example, Roche Diagnostics partnered with Fapon Biotech in November 2022 to improve its cost advantage by outsourcing its non-core reagent materials. Similarly, Danaher partnered with China Resources to outsource portfolios to national distributors or contract sales organizations in 2022.

VBP brought a mixed bag of consequences to other medtech industry stakeholders

Impact on the Chinese government spending

The Chinese government made considerable savings through the VBP program, thanks to curbing certain healthcare costs, and could potentially shift these savings to the sector’s other segments. The estimated annual savings based on the intended purchase volume was 10.9 billion yuan (US$1.6 billion) for coronary stents, 16 billion yuan (US$2.3 billion) for artificial hip and knee joints, and 26 billion yuan (USD$3.7 billion) for spinal and orthopedic products.

To put these numbers into perspective, the total savings from these three categories alone make up nearly 2.2% of China’s total public medical insurance spending of US$372.6 billion in 2021. These savings stem from VBP’s aim to reduce healthcare expenditures for the Chinese government by providing reasonably priced medical devices and implementing standardized pricing nationwide.

Impact on medtech distributors

One of the primary reasons for the high costs of medical devices for hospitals and patients in China is the unreasonably elevated profit margins of medtech distributors. The introduction of VBP has negatively impacted these margins.

At the same time, medtech companies are likely to pivot from a distributor-driven model to a direct distribution strategy to regain their own margins lost due to the increasing price pressures imposed by VBP. This transition is likely to limit the role of distributors to logistics functions, as seen in many other markets. At the same time, medtech companies will take ownership of commercial responsibilities and execute them through various channels.

The focus of VBP has expanded to specialized medical device categories

While the initial focus of VBP was on commoditized products with strong local alternatives, VBP has now ventured into medical device categories earlier perceived as not feasible for VBP tenders, such as electrophysiology for cardiology and immunoassays for IVD.

With VBP causing a radical change in commoditized products, medtech companies must now speed up registration and commercialization of products from specialized (non-commoditized) medical device categories that are in the pipeline. Pharmaceutical companies have already embraced this shift in strategy, while the change is gradually gaining steam among medtech players.

EOS Perspective

VBP is not a win-win strategy for all medtech stakeholders. Clear winners of VBP are patients and the Chinese healthcare system, while medtech companies, both domestic and foreign, and medtech distributors might get the shorter end of the stick.

VBP has made it difficult for all medtech companies operating in China to earn profits as high as in the past and has forced them to navigate in a more challenging environment.

At the same time, VBP is not entirely synonymous with foreign medtech players not succeeding in China. Chinese patients tend to prefer medical devices made by Western producers over those from domestic companies, provided that the imported devices are available at affordable prices. This preference is mainly due to the perception that foreign products are of higher quality than local options.

VBP will likely foster innovation in technology as companies will need to develop and design the best quality products to have an edge over their competition in tenders. Due to lowered prices, the bargaining power of medtech companies has decreased. Therefore, to differentiate themselves from their competition, they will need to prioritize innovation.

Although VBP has increased headwinds on the prices of medical devices, it has fueled strategic partnerships of MNCs with local medtech players. Local partnerships are likely a good move for all involved stakeholders, potentially also driving the overall growth of the medtech industry in China.

With China’s intention to pay 80% of its medtech expenditure through VBP by 2025, it will not be surprising to see VBP’s rollout in new categories of medical devices in the country.

The introduction of VBP will also have global repercussions, including a decline in small to medium medtech players’ interest in entering the Chinese market. However, the undeniable advantage of VBP’s introduction is that medtech companies will strive to innovate at lower costs, which will be a long-term driver for the market.

 

Pet and Animal Health M&A What’s the Scoop on the Industry's Latest Shake-ups by EOS Intelligence
by EOS Intelligence EOS Intelligence 1 Comment

Pet and Animal Health M&A: What’s the Scoop on the Industry’s Latest Shake-ups?

The pet and animal health market has seen a recent surge in M&A, signaling shifting dynamics within the industry. While rising pet ownership and increasing pet care awareness are creating positive momentum for the sector, broader trends are pushing major players to venture into the industry.

Many European players are focusing on cross-border acquisitions

M&A activity is particularly robust in Western markets

A significant number of mergers and acquisitions observed recently in the industry indicate a desire for major players to consolidate their positions and expand geographically in a bid to build their global presence and diversify revenue sources. Many companies pursuing geographic diversification are targeting Western markets with well-established pet care, mainly due to high disposable incomes, advanced veterinary services, and a cultural tendency to indulge pets.

An example of such a move is the 2023 acquisition of UK-based Kin Vet Community by Perwyn Capital, a European private equity (PE) investor, to gain entry into the UK veterinary services market. This acquisition aims to capitalize on the UK veterinary services market’s significant growth, which has risen from US$6.4 billion in 2021 to almost US$8 billion in 2023.

The UK-based veterinary sales and service provider, Animalcare Group acquired Australia-based Randlab in 2024 to strengthen its presence in the equine veterinary market. With this acquisition, Animalcare Group will be able to bolster its existing product portfolio and expand from the UK and Europe into Australia and New Zealand.

Similarly, Sweden-based investment company EQT Partners acquired VetPartners, a veterinary care network spread in Australia and New Zealand, in 2023. This move will not only help EQT enter the Australian and New Zealand veterinary markets but also help gain a strategic position in the veterinary industry with a network of 267 clinics and hospitals.

Experts believe that all these recent acquisitions indicate a desire of players to solidify their industry presence and widen their customer base, especially in the lucrative Western markets.

Central Europe is also experiencing a notable uptick

While M&A activity is the strongest in Western markets, some companies are also looking to Central Europe to search for their acquisition targets. An example is the 2024 acquisition of Bratislava-based VetCare Group by AniCura, a Swedish veterinary care provider owned by US-based Mars. This acquisition will add ten clinics to AniCura’s portfolio, three in the Czech Republic and seven in Slovakia. This strategic move also marks AniCura’s entry into the Czech and Slovak markets, significantly expanding its footprint in Central and Eastern Europe and complementing AniCura’s existing presence in Poland.

The developing markets are also grabbing players’ attention

A few players are also showing interest in developing markets such as Asia and Africa, where pet ownership is increasing, but veterinary and pet healthcare infrastructure remains underdeveloped.

Strategic acquisitions are increasing in Africa

Africa is a particularly lucrative investment zone with a favorable market situation for able players interested in investing in the continent’s animal health sector. This is due to barriers in local drug manufacturing, lack of local vets in private practice, and shortage of veterinary drugs.

A recent example of such an investment is Dutch-based animal nutrition company Nutreco’s 2024 acquisition of AECI Animal Health in South Africa. With this acquisition, Nutreco intends to utilize AECI’s expertise in animal nutrition to bolster its operations in South Africa. This move is also expected to allow Nutreco to tap into AECI’s distribution network and manufacturing facility in Burgersdorp, expanding its footprint in Africa’s crucial markets.

Similarly, in 2022, Ireland-based Bimeda acquired Afrivet, an animal health product distributor based in South Africa. This acquisition facilitated Bimeda’s entry into the African animal health products industry.

Foreign players are targeting the growing Asia-Pacific market

The Asia-Pacific (APAC) animal health market is also seeing similar interest from many competitive players. The pet care market in Asia, though still developing in several areas, is experiencing rapid growth. Countries such as China, India, and Japan are seeing a rise in pet ownership and heightened awareness regarding pet health. This makes it a great place for players looking to concentrate on various growth strategies, including collaborations, partnerships, agreements, and M&A, to strengthen their market presence.

An example of a recent strategic acquisition in the Asian market was France-based animal health company Virbac’s purchase of Japanese ORIX Corporation’s animal health subsidiary, Sasaeah, in 2024. The acquisition will help position Virbac as a leader in Japan’s farm animal vaccine market, particularly in the cattle sector. Sasaeah already has a strong presence in Japan and develops a wide range of veterinary products for both farm and companion animals. With this acquisition, Virbac will also gain Sasaeah’s local manufacturing facilities in Japan and Vietnam and its R&D capabilities. It will also strengthen Virbac’s status as a major player in the Japanese animal health market and offer opportunities for further expansion throughout Asia.

Virbac also acquired in 2023 a majority stake in Globion, a poultry vaccines company located in India, as part of its strategy to enter the avian vaccines market in the region and expand its geographic reach.

Similarly, in 2022, Germany-based Symrise AG, the parent company of Diana Pet Foods, which provides palatants for the pet food industry, acquired Wing Pet Food, a leader in pet food palatability in China. This acquisition gave Symrise access to the APAC markets.

Though the acquisition efforts are much lower in the developing markets, with favorable conditions such as increasing pet ownership and rising demands for efficient veterinary care, interested players can expect an overall improvement in market conditions and attractiveness in the future.

Major players are vying for smaller companies in a bid to grow product portfolios

Beyond increasing the geographical reach, the M&A activities aimed at expanding and strengthening companies’ product portfolios are also a significant trend observed in the animal health industry. Many big players are eyeing smaller firms to build comprehensive portfolios that can compete more effectively against other industry giants.

An example is the 2024 acquisition of Boston-based Invetx, which specializes in protein-based animal therapeutics and monoclonal antibody (mAb) development, by UK-based Dechra Pharmaceuticals. This acquisition enhanced Dechra’s specialty therapeutics portfolio for pets and provided access to the growing mAbs market. It will also introduce new technological capabilities, strengthen Dechra’s pipeline, and create significant future growth opportunities for the company.

Similarly, in 2024, the NJ-based Merck Animal Health acquired Indiana-based Elanco Animal Health’s aqua business to enhance Merck’s position in the aquaculture sector. This includes medicines, vaccines, supplements, and nutritional products for aquatic species, as well as two manufacturing facilities located in Vietnam and Canada and a research center in Chile. With this acquisition, Merck aims to strengthen its extensive portfolio, including warm and cold water products, vaccines, anti-parasitic treatments, and nutritional supplements.

Many other acquisitions materialized in 2024 in a similar vein. This includes Animalcare Group’s acquisition of Randlab to enter the equine care market and Australia and New Zealand’s animal health market. Also, South Korea-based Easy Bio acquired US-based Devenish Nutrition to bolster its feed additive and premix operations in North America.

Players are focusing on consolidation to bolster their veterinary service offering

The veterinary services segment is also seeing robust consolidation. Several corporate buyers acquired independent clinics and businesses to strengthen their market position and access the robust customer base of the target companies. Significant consolidation has been visible in the USA and globally for the past three decades.

A recent example is Norway-based veterinary dental care provider EMPET acquiring Smadyrklinikken, a Norway-based provider of veterinary services, including surgery and emergency care, in 2023. EMPET also acquired a Norway-based horse treatment clinic, Hesteklinikken Bergen, in 2024, further expanding its veterinary treatment scope.

Similarly, in 2024, Miami-based at-home veterinary care provider The Vets merged with Boston-based BetterVet, a mobile veterinary service provider, to combine the strengths of both companies and enhance their pet healthcare services across the USA.

Another acquisition along the same line in 2024 was that by Pavo, part of the Netherlands-based ForFarmers‘ global equine organization, which acquired Thunderbrook Equestrian, operating primarily in the UK and Ireland. Thunderbrook offers a diverse range of products, including conventional and organic horse feed, supplements, and herbs, supported by a strong distribution network and online presence. Experts expect this acquisition to enhance Pavo’s distribution capabilities.

Private equity firms are also targeting pet health firms

It is not only businesses within the veterinary or pet sector that are acquiring clinics and animal health businesses, but also companies from other industries and PE firms.

One example is the 2024 acquisition of Ireland-based veterinary products manufacturer Chanelle Pharma by Exponent Private Equity, a UK-based PE firm. Chanelle specializes in R&D and has a prominent position in the market as a producer of generic pharmaceuticals for both human and veterinary use. This acquisition offers Exponent many opportunities for investments in product development and R&D.

Similarly, UK-based PE firm Apax Partners, in 2023, acquired stakes in US-based pet care software service provider Petvisor to focus on accelerating innovation and to position itself as a market leader in the pet software segment.

This trend will continue since the pet care market is expanding remarkably. According to Fortune Business Insights, an India-based market research firm, the global pet care market valued at US$246.7 billion in 2023 is expected to reach US$427.8 billion by 2032. Experts anticipate that this significant growth fueled by the increasing trend of pet ownership will prompt more PE firms to invest in the pet care market.

Pharmaceutical and vaccine segment is seeing acquisitions with rising pet diseases

The growing demand for specialized pet treatments is driving M&A in the pharmaceutical and vaccine segments of the pet health industry. The rising cases of pet and livestock infections and increasing zoonotic diseases are creating a strong demand for improved treatments, conveniently available medicines, and vaccines. This has prompted many players to divert their attention toward acquiring companies in the veterinary pharma segment to gain market access.

An example is the 2024 acquisition of Iowa-based animal pharmaceuticals and vaccines manufacturer Diamond Animal Health by Minnesota-based animal compounding pharmacy, Veterinary Pharmaceutical Solutions. Experts see this acquisition as the first step in VPS’s plans to grow its capabilities, market presence, product offerings, and research capabilities.

Another example is the 2023 acquisition of PetMedix, a UK-based firm developing species-specific therapeutic antibodies for pets, by US-based Zoetis, a global animal health firm. With this acquisition, Zoetis has gained access to PetMedix’s portfolio of antibody drug candidates targeting unmet clinical needs in dogs and cats with chronic and terminal diseases, including oncology and inflammatory diseases.

Similarly, the US-based Better Choice Company‘s acquisition of Canada-based Aimia Pet Healthco in 2024. This move will allow Better Choice to lead internal clinical trials focused on addressing the increased demands for treating obesity-related issues in cats and dogs.

In 2023, Zoetis acquired Germany-based veterinary care company Adivo, which focuses on creating animal therapeutic antibodies. This acquisition will allow Zoetis to leverage Adivo’s existing libraries of species-specific antibodies, facilitating the creation of a diverse array of new veterinary products.

The vaccine market in emerging economies such as Asia-Pacific is also seeing some scattered M&A activity. Virbac’s 2023 acquisition of a majority stake in India-based poultry vaccines company Globion to venture into the growing avian vaccines market can be seen as an instance of this budding trend.

Preventive care and wellness players are becoming attractive targets

A 2023 survey published by the American Veterinary Medical Association indicated that 76% of pet owners consider their pet’s safety and health a top priority. This disposition has also started influencing how pet owners choose food for companion animals, prompting them to opt for organic and healthy treats. All these have made diagnostics, preventive care, and sustainable health a hot topic among interested players, leading to some major acquisitions.

Wellness and preventive care players are attractive acquisition targets

Many acquisitions in the animal health industry are also focused on wellness and preventive care businesses. The factors driving this trend are the rising awareness among pet owners about the advantages of preventive healthcare, early disease detection, and overall wellness of the pets in the long term.

An example is the 2024 acquisition of US-based treat and pet care company Riley’s Organics by Skane-based Swedencare‘s subsidiary business, Pet MD Brands, marking its entry into the organic dog treat market in the U.S. The acquisition will give Pet MD access to Riley’s premium organic dog treats and nutritional supplements targeting coat and skin health, liver support, ear care, etc.

Similarly, Antelope, a US-based company that offers premium pet care products and services, has acquired My Perfect Pet, a US-based brand known for its ‘gently cooked’ dog and cat food. With this acquisition, Antelope can strengthen its portfolio with My Perfect Pet’s nutritionally balanced pet food without preservatives.

Veterinary diagnostics surge as acquisitions drive segment growth

The veterinary diagnostics sector has also seen some recent acquisitions. Mars, currently a leading name in the pet health segment, acquired Cerba HealthCare’s stake in the French veterinary diagnostics firms Cerba Vet and Antagene. Mars made a similar decision in 2023 when it acquired US-based Heska, a veterinary diagnostic and specialized solutions provider. All these acquisitions can help Mars position itself as a major competitor in the pet diagnostics sector.

Similarly, in 2024, US-based Ollie, a subscription service for fresh dog food, acquired Dig Labs, a diagnostic company that delivers real-time health screenings for pets, including stool analysis and weight management. This acquisition also aims at helping pet owners monitor their pet’s food intake and get personalized food intake recommendations to prevent health issues.

We expect the veterinary diagnostics segment to grow significantly, and M&A activity will continue accelerating in the coming years.

EOS Perspective

The flurry of M&A activity in the animal health sector highlights the industry’s significant potential. Along with the existing trends, experts believe there are many more segments interested and able players looking to consolidate their position in the industry can focus on.

Online and mobile pet care is a promising area for businesses considering investment or acquisition within the pet health sector. Companies that can effectively navigate this space will likely capitalize on the increasing demand for online services, likely through acquiring businesses with an established customer base to strengthen their portfolio. It will also help firms enhance their competitive edge through a digital-first approach. The 2024 acquisition of The PharmPet Co by Pharmacy2U, both UK-based firms, can be seen as one of the early steps in this direction. This merger will allow Pharmacy2U to offer pet medicines online to customers.

A nascent trend that could offer opportunities in the future is pet owners’ increasing interest in their pets’ gut and microbiome health. Experts believe this inclination of pet owners will increase in the coming years, creating a massive market for pet foods and supplements, especially those containing probiotics and gut-supporting formulas. This will make profitable businesses in the pet supplement segment a lucrative option for able and interested players to focus on.

Read our related Perspective:
 Poop to Pills: Is FMT the Future of Veterinary Medicine?

Sustainable and eco-friendly products are another segment with growing attractiveness thanks to the ever-increasing environmental awareness. As in many other markets, pet owners will seek products that consider environmental impact. With consumers aligning their choices with eco-friendly solutions, we can expect major brands to merge or acquire companies making eco-friendly pet products. The 2024 merger of Chr. Hansen and Novozymes, both Denmark-based firms, to create Novonesis is an example. With this merger, the new company aims to develop microbial solutions and enzymes while focusing on minimizing chemical use and advancing climate-neutral practices.

Recall Aftermath Who is Gaining Share in the Sleep Apnea Devices by EOS Intelligence
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Recall Aftermath: Who is Gaining Share in the Sleep Apnea Devices and Ventilators Market?

In recent years, the number of ventilator recalls has increased considerably, primarily due to product quality issues, software malfunction, and manufacturing defects. This affected manufacturers such as Philips, Medtronic, and Vyaire Medical, leading to brand damage, financial losses, and a shift in the market competition. Existing players and new entrants such as Getinge and Nihon Kohden are stepping in to fill the gap with innovative and non-invasive products. The recalls caused challenges for manufacturers and patients, highlighting the need for strong quality control and regulatory oversight.

Recalls of its sleep apnea devices and ventilators hit Philips the hardest

The medical device industry has recently experienced many product recalls, particularly in the ventilators segment, impacting major market players such as Philips, Medtronic, Baxter, GE Healthcare, Hamilton Medical, and Vyaire Medical.

Philips (Philips Respironics) faced a series of class I respiratory product recalls, including CPAP and BiPAP machines, and ventilators, due to health risks caused by the polyester-based polyurethane (PE-PUR) sound abatement foam breakdown in the devices. Industry experts consider Philips’ sleep apnea devices and ventilator recalls among the most significant since 2021. As of January 2024, the company experienced a recall of over 15 million sleep apnea devices and ventilators, and reportedly hundreds of deaths. The recall seriously hurt the company’s reputation, weakened its position in the market, and caused significant financial problems.

The recalls led to a decline in the company’s share price by 60-70% in 2021, and it is still about 50% lower than its peak in April 2021 (US$ 53.45). Comparable sales of the connected care segment, including sleep apnea devices and ventilators, declined by about 19% in 2021 in comparison to 2020. This happened primarily due to sleep apnea devices and ventilators recalls, and the normalization of demand for hospital ventilators and monitoring systems following the COVID-19 surge. Recalls continued to drive down ventilator and sleep apnea device sales in 2022 and 2023.

The considerable impact on sleep apnea devices and ventilator sales resulted in a decline in Philip’s share in the sleep apnea device market, dropping to an estimated 20% between 2021-2023 from over 30% before the recall. The company also experienced a notable decline in market share in the ventilators market. Despite the decline in market share, Philips maintained its position as one of the leading players in both the sleep apnea devices and ventilators market.

However, in January 2024, Philips agreed to halt the sales of 19 sleep and respiratory products in the USA as a part of the consent decree with the US Department of Justice (DOJ). These products included hospital ventilation, certain home ventilation, sleep diagnostic devices, and portable and stationary oxygen concentrators. This affected the company’s brand image greatly and resulted in a further loss of market share in both ventilators and sleep apnea devices markets. Since the company will continue to sell consumables and accessories, including masks, it is anticipated to maintain a portion of its market share in both segments.

In April 2024, the company agreed to pay US$1.1 billion in legal settlement to resolve injury-related cases caused by sleep apnea devices and ventilators in the USA. Overall, sleep apnea device recalls cost the company over US$5 billion, likely including charges such as provisions for Philips Respironics-related litigation, consent decree, remediation costs, legal settlements, workforce restructuring, and quality remediation action. In addition, Philips cut 6,600 jobs by 2023 and is likely to reduce its workforce by a total of 10,000 by 2025.

Several companies bore the brunt of their own ventilator recall setbacks

Other prominent manufacturers such as Drägerwerk (Draeger), Medtronic, Vyaire Medical, Hamilton Medical, and Baxter also experienced various ventilator recalls due to manufacturing and quality defects. Although the FDA classified these recalls as serious, these companies did not face the same severe consequences as Philips, as these recalls did not result in major injuries.

All these manufacturers also witnessed a drop in ventilator sales largely due to the stabilization of demand for ventilators following the COVID-19 surge, with product recalls also contributing to the downturn.

In February 2024, Medtronic completely exited the ventilator market due to unprofitability. Similarly, in June 2024, Vyaire Medical filed for bankruptcy and was subsequently acquired in October 2024 by Zoll, an Asahi Kasei company engaged in the manufacturing of medical devices and related software solutions. This caused a profound impact on the ventilators market.

Market players are introducing products with advanced features to gain market share

The ventilator market encountered a radical shift in competition due to numerous product recalls. The suspension of sleep and respiratory product sales cost Philips its leading market position in sleep apnea devices and ventilators (except for certain home ventilators). It remains unclear when or if Philips will be able to resume sales of these devices. However, the company is unlikely to leave its presence in the sleep apnea devices and ventilators market entirely due to its commitment to service and supply of parts of ventilators in use, as well as its decision to continue the sale of consumables and accessories.

Existing market players such as Getinge, Hamilton Medical, Drägerwerk (Draeger), ResMed, and GE Healthcare, and newer entrants such as Nihon Kohden, are likely to fill in the gap left by Philips, Medtronic, and Vyaire Medical in the USA.

Market players such as Getinge, Drägerwerk (Draeger), and Nihon Kohden are focusing on introducing technologically advanced ventilators with features such as enhanced patient comfort, advanced monitoring capabilities, portability, and adaptive ventilation modes, to grab a slice of the pie. They are also increasingly focusing on expanding their portfolio of non-invasive ventilators with different interfaces, including face masks, nasal masks, helmets, and mouthpieces.

For instance, in October 2024, Nihon Kohden introduced a new ventilator system that combines invasive and non-invasive ventilation and high-flow oxygen therapy in one device, offering adaptability and eliminating the need to switch between machines. It also features a customizable, app-based touchscreen interface with advanced monitoring capabilities. Similarly, in January 2024, Getinge introduced ‘Servo-air Lite’, a non-invasive ventilator with high-flow therapy that offers optimal respiratory support, enhanced patient comfort, and ease of use for clinicians.

ResMed, a leading player in both the sleep apnea devices and ventilators market, is estimated to have grabbed over 10% of Philips’ market share in the sleep apnea devices market in the USA. ResMed witnessed a substantial increase in demand for its sleep and respiratory care products, including sleep apnea devices and ventilators, for various reasons, including Philips’ product recalls. The demand for its sleep and respiratory care products in the USA, Canada, and Latin America increased by 16%, 25%, and 10% in 2022, 2023, and 2024, respectively.

Companies engaging in sleep apnea devices and ventilator rentals, sales, and distribution, such as Trace Medical, also started adding brands from different companies to their product mix to meet the demand for these devices.

Patients experience delays in treatment and struggle to switch to other brands

Philips’ foam degradation issue has exposed patients to severe health risks, leading to respiratory complications and even cancer. Recalls of many ventilators and sleep apnea devices have left hospitals struggling to replace them, causing delays in patient treatment.

Patients relying on a specific brand faced reduced treatment options. Many patients found it difficult to switch to other brands due to cost and differences in machine settings or interfaces. With Philips halting sales of various sleep apnea devices and ventilators, patients have no choice but to switch to other brands.

The recall of various products from different companies has created significant demand and supply chain pressures for existing companies. These pressures will likely drive up ventilator and sleep apnea device prices, further burdening patients.

EOS Perspective

Product recalls in the sleep apnea devices and ventilator segment brought quality issues to the limelight. This highlights the need for stronger quality control processes and technologically advanced sleep apnea devices and ventilators incorporating virtual monitoring and AI integration, which can help detect defects earlier.

While the FDA received complaints about Philips’ degradation of the sound abatement foam in the sleep apnea devices and ventilators before the recall initiation, decisive action to force correction was not taken immediately. Also, despite knowing that Philips had been aware of the foam degradation issue for many years, the FDA did not take stronger enforcement measures against the company sooner. This situation highlights the importance of assessing and enhancing the FDA’s oversight process to ensure timely response to medical device complaints.

Philips suffered lasting brand damage due to the recalls. Although the company is trying to regain shareholder and consumer trust after settling US claims for an amount much lower than anticipated (US$2-5 billion) by analysts and the public, it faces a long road ahead.

Regarding market competition, ResMed is estimated to continue to lead and strengthen its dominant position in the sleep apnea devices market. The exit of well-established players from the ventilator market will intensify competition among existing companies and new entrants seeking to capture market share. However, it will be a gradual process as customers slowly transition from existing products to new brand ones. On top of that, the new entrants are likely to face stricter regulatory norms and product approval processes aimed at reducing the number of product recalls and enhancing patients’ safety.

Personalized Image-Guided Therapy Medicine's New Crystal Ball by EOS Intelligence
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Personalized Image-Guided Therapy: Medicine’s New Crystal Ball?

Precision and personalized care are becoming the keys to unlocking better patient care in modern medicine. With personalized medicine image-guided therapy (IGT) systems offering physicians better control over therapy decisions, the healthcare industry hopes discomfort and uncertainty will give way to reliability and healing.

IGT enhances surgical precision and treatment management

IGT is an approach that uses various imaging technologies to plan, perform, and evaluate surgical procedures and treatments. There are two main groups: traditional surgeries enhanced by imaging technology and newer procedures that use imaging and specialized instruments to treat internal organs and tissues without surgery.

The IGT systems, such as Dutch Philips’ Azurion and American Varian’s Halcyon, help improve minimally invasive procedures by offering real-time imaging support during interventional techniques, especially in cardiology and oncology. They also aid in precise navigation and treatment delivery.

Azurion’s IGT system offers various clinical suites, including Coronary, Onco, and Neuro suites, tailored to a particular surgery. This customization can make a surgeon’s work easier. Many IGT systems also integrate with hemodynamic systems and similar interventional tools that give surgeons more information.

On the other hand, advanced imaging platforms such as the 1788 visualization platform by US-based Stryker, TIVATO 700 by Germany-based Zeiss, and VISERA ELITE II by US-based Olympus specifically work in open surgical settings, providing high-definition imaging that enhances visibility during more invasive procedures.

IGT employs imaging modalities and technological innovations for disease management

The most commonly used imaging modalities in IGT are X-rays, ultrasound, MRI, and CT scans, which provide detailed cross-sectional images of the body. Other supporting technologies include angiography, ultrasound, tracking tools, surgical navigation systems, and integration software.

IGT also offers invaluable insights into disease diagnosis and management of minimally invasive procedures. Significant advancements have been made in this field in recent years owing to developments and integration of innovations such as artificial intelligence (AI), big data, deep learning, sensor fusion, and advanced signal processing.

Personalized Image-Guided Therapy Medicine's New Crystal Ball by EOS Intelligence

Personalized Image-Guided Therapy Medicine’s New Crystal Ball by EOS Intelligence

IGT and advanced visualization systems complement each other in cancer surgeries

Applying advanced visualization systems for open cancer surgeries adds a competitive aspect to the image-guided therapy landscape. Systems such as Stryker’s 1788 have the potential to be a viable option in low-resource environments or hybrid surgical settings. Such facilities may view it as a cost-effective and simpler substitute for comprehensive IGT systems for certain cancer surgeries.

The competition could also intensify in niche applications where minimally invasive tumor resection overlaps with interventional oncology. This is especially true for hospitals that aim for a one-stop surgical solution without high investment in IGT infrastructure.

However, the IGT systems have a different clinical role, being particularly effective in procedures such as catheter-based interventions or radiotherapy, where accurate imaging is extremely critical. Therefore, the competition may be nuanced, depending on the specific surgical approach, as the two technologies could also complement each other by providing tailored solutions for distinct surgical techniques and scenarios.

IGT sector is rapidly growing in minimally invasive and specialized procedures

The IGT market has seen rapid development, especially in the post-pandemic era. The global IGT systems market was US$5.5 billion in 2023 and is estimated to reach US$8.9 billion by 2032, according to an India-based market research firm, IMARC. The company also forecasts the market to grow at a CAGR of 5.4% from 2024 to 2032.

Several factors drive this growth, including IGT’s ability to offer better health outcomes in treating severe conditions such as cancer, its application in treating old age-related conditions, such as stroke and vessel blockage, and the surge in demand for minimally invasive procedures.

Rising cancer cases are boosting sector growth

The American Cancer Society estimates that approximately 20 million new cancer cases were diagnosed, and 9.7 million people died from cancer worldwide. The number of cancer cases is expected to reach 35 million by 2050. The high prevalence of cancer has increased the need for innovative treatment options with limited damage to healthy cells. Oncologists and patients are now opting for IGT, such as image-guided surgeries and radiotherapy, to treat cancers, including severe and complex ones.

For example, hepatocellular carcinoma, the most common liver cancer, is a challenging disease to treat. A 2010 study published in Insights into Imaging, a peer-reviewed open-access journal, indicated that due to the advanced stage of the disease at diagnosis and limited donor availability, only 10–15% of HCC patients are eligible for surgical resection or liver transplantation. Surgical options are primarily reserved for patients with solitary, asymptomatic HCC and well-preserved liver function without significant portal hypertension or elevated bilirubin levels. Also, systemic chemotherapy has largely been ineffective for HCC.

Image-guided procedures can offer doctors detailed imaging data to aid diagnosis, patient risk assessment, and treatment planning during the early detection stages. Image-guided catheter-based techniques are used for treating larger lesions or more extensive liver involvement seen in intermediate-stage HCC, and ablative procedures are employed for early-stage HCC.

Minimally invasive image-guided therapies can also extend survival, preserve more healthy liver tissue (crucial for cirrhotic patients), allow for potential retreatment, and serve as a bridge to transplantation.

Growing geriatric population is also contributing to sector expansion

The rising geriatric population is also driving the need for image-guided therapies. UN estimates there were 761 million people aged 65 or older globally in 2021. This number is expected to rise to 1.6 billion in 2050. Age is a significant factor in determining the likelihood of developing serious conditions such as cancer. According to the National Cancer Institute (NCI), the average age of individuals diagnosed with cancer is 66, indicating approximately half of all cancer cases are diagnosed in people aged 66 and older.

Older people are also at a higher risk of suffering from severe post-procedural complications, especially in the case of invasive surgeries. IGT-supported therapies, especially minimally invasive surgeries, can help doctors treat geriatric patients with limited adverse effects.

Advancements in minimally invasive procedures and cancer radiotherapy are on the rise

The rising demand for minimally invasive procedures is another factor driving the increasing adoption of IGT systems. A 2015 study published in JAMA Network, an open-access medical journal, indicated that minimally invasive surgeries have fewer postoperative complications, provide better outcomes, and reduce healthcare costs. This has prompted many physicians and patients to choose IGT system-based minimally invasive therapies in treating complicated conditions that may otherwise require longer hospital stays and repeat visits.

The growing number of developments in cancer radiotherapy is also an important factor propelling the IGT market forward. AI in radiation therapy enhances the accuracy and precision of treatment. In image-guided radiotherapy (IGRT), AI-based algorithms are used to analyze images taken during treatment and make adjustments to the treatment plan in real time. This enables clinicians to target tumors with greater precision, reduce the amount of irradiated healthy tissue, and improve treatment outcomes.

Several premier institutions, such as Cancer Research UK, London-based Medical Research Council (MRC), and US-based Stanford Medicine, are involved in cancer radiotherapy research to develop cancer imaging, diagnostics, and minimally invasive treatment platforms. With the radiotherapy market will likely reach US$12.51 billion by 2029, according to a 2024 report by India-based market research firm Mordor Intelligence, these efforts can contribute to the growth of the IGT sector.

IGT therapies allow for prompt and low-risk interventions

The introduction of IGT into personalized medicine has had a crucial impact on patient outcomes. IGT enables healthcare professionals to diagnose and treat serious conditions more rapidly. This prompt initiation of treatment reduces the risks associated with delayed interventions.

An example of an IGT system offering better treatment management is Philip’s Azurion Lung Edition, a 3D imaging and navigation platform that streamlines the diagnosis and treatment of lung cancer. The system combines tableside CT-like images with real-time X-ray guidance and advanced tools to support guided procedures. It is specifically designed for bronchoscopy procedures and enables clinicians to perform minimally invasive biopsy and lesion ablation in a single procedure. This reduces the need for additional procedures and speeds up diagnosis.

IGT systems also offer a precise, real-time visualization of the therapy site, enabling highly targeted interventions. This level of accuracy can minimize complications and failures during procedures. For example, IGRT used in cancer treatment enables oncologists to target tumors while sparing healthy tissues precisely, reducing side effects and boosting treatment success rates. Surgeons also better comprehend spatial relationships between the tumor and vital organs or blood vessels when they can access high-resolution images highlighting the essential structures during the procedure.

Minimally invasive nature of IGT therapies minimizes complication and disability risks

IGT procedures are minimally invasive in nature. This reduces the trauma caused by the procedure, reducing the risk of complications. Patients can recover faster from IGT procedures, reducing hospital stays and lowering the likelihood of hospital-acquired infections and other potential complications. A 2022 study published in the National Library of Medicine’s (NLM) online portal indicated that image‐guided procedural techniques reduce risks, prompt faster recovery, and shorten hospital stays.

IGT’s minimally invasive nature also reduces the risk of disability post-treatment. In the case of complicated surgeries such as brain tumor removal, surgeons use techniques such as intraoperative MRI (iMRI) to get a detailed map of the tumor and surrounding brain structures before and during surgery. This allows for more precise resection of the tumor and reduces the risk of injury to critical brain areas, thereby lowering the possibility of neurological damage and associated disabilities. A 2014 article published in NLM’s online portal indicated that using iMRI improved surgical outcomes, including increased tumor resection and survival rates and decreased risk of neurological deficits.

IGT systems offer interventional tools supporting surgeons in complex procedures

Advanced IGT systems now come with integrated interventional tools, which can be especially beneficial during complex or delicate procedures. For example, Azurion, an IGT platform developed by Philips, has interventional tools integrated into the imaging system. It offers procedure cards that allow clinicians to pre-program routine tasks and preferences, as well as an interface for performing various procedures in interventional labs.

Integrations such as these can help surgeons make informed and data-driven decisions during procedures, allowing them to make mid-procedure adjustments. Such flexibility is crucial, particularly in complex surgeries or when treating conditions such as cardiovascular diseases.

Development high costs and cybersecurity issues hinder adoption

Despite offering numerous benefits to patients, the developers of IGT systems face several challenges.

Huge R&D costs and market competition are impacting new players

The significant financial burden of research and development in this field is one major obstacle for companies, especially newer ones entering the market with limited budgets. Developing advanced imaging technology that seamlessly integrates with therapeutic tools requires substantial investments in software and hardware.

Also, these systems require continuous refinement to ensure optimal accuracy and adaptability, as they must be able to accommodate diverse patient anatomies and conditions. This is a time-consuming and costly process. Consequently, only established companies with significant R&D budgets may be able to compete in the market.

Not just the R&D budget but also leading players’ brand equity is a significant challenge for new players trying to enter the IGT systems market. The newer entrants face intense competition from established players such as Philips, GE Healthcare, and Siemens. These companies have been in the market for years and have a strong foothold in terms of market share and brand recognition. This can make it challenging for new players to establish themselves in the sector, limiting innovation and market growth.

New companies can attempt to tackle this and make inroads into the market by forming partnerships with hospitals and public health initiatives to drive the adoption of their IGT systems.

High upfront costs are affecting the widespread adoption of IGT devices

The IGT devices’ market prices reflect the high R&D costs. Almost all IGT systems have high upfront costs. For example, an interventional radiology suite can cost anywhere between US$1 million to over US$3 million, depending on its sophistication. This can make acquiring and implementing IGT systems prohibitively expensive for many healthcare providers, particularly smaller or publicly funded organizations.

While healthcare providers can pass on the cost to patients, it can also cause many other challenges. Even with insurance coverage, some patients may not be able to afford certain procedures or treatments when the out-of-pocket expenses are significant. Consequently, this can reduce the overall demand for IGT devices, negatively impacting sales for manufacturers.

Companies can try tackling this issue by offering price flexibility and discounts for large orders or entering into long-term contracts with healthcare providers to help maintain demand. They may also offer leasing or subscription-based payment models instead of selling devices outright. This could encourage purchases by healthcare providers, allowing them to spread out the costs over time and lighten the upfront financial burden on patients.

Cybersecurity challenges are threatening patient care and security

Another significant challenge in adoption is cybersecurity and data management issues. A 2024 fact sheet by the US Office of the Director of National Intelligence indicated that there has been a 128% increase in healthcare ransomware attacks in 2023 over 2022 in the USA. As a result of these attacks, American hospitals have faced disruptions to medical procedures, patient care, and operations, including delayed procedures, diverted patients, rescheduled appointments, and strained acute care provisioning.

IGT systems generate and store vast amounts of imaging and procedural data on the cloud. Any security breach can lead to privacy leaks and misuse of patient data. Attackers can also maliciously embed images or reports and manipulate medical images, thereby delaying procedures and patient care and causing loss of life. This complexity often leads to hesitation in adoption, particularly for institutions that lack the necessary IT infrastructure.

Many companies are addressing this issue by creating devices with secure design and in-depth defense approaches. An example is Philip’s Azurion, which offers a six-layer protection to combat cyberattacks.

EOS Perspective

IGT systems promise to improve patient outcomes and revolutionize healthcare in the long run, particularly in treating serious medical conditions such as cancer. While there are some challenges to address in order to strengthen widespread adoption, with rapid developments underway in technologies such as AI and augmented reality, IGT can play a greater role in disease treatment in the coming years.

Currently, studies are underway using AI and machine learning to predict the response to minimally invasive image-guided therapies. Similarly, AI-based algorithms are also being developed to monitor tumor motion, reduce treatment uncertainty, and improve treatment precision.

One promising direction new entrants can push for is more portable and cost-effective IGT solutions. Research to miniaturize imaging devices and develop affordable hardware could make IGT systems more accessible to a broader range of healthcare providers, even those in remote areas, thereby expanding the market. Also, as costs come down and standardization improves, hospitals and clinics of varying sizes will be more likely to invest in IGT technologies.

In the short term, larger, well-funded players are likely to continue to lead the way in adopting and refining IGT systems. These companies have the resources to invest in technology and training, enabling them to push the boundaries of personalized medicine. However, as the technology matures and becomes more affordable, smaller players will increasingly be able to capture a market share.

Mind over Matter How Non-invasive Neuromodulation Is Becoming the Future of Pain Management by EOS Intelligence
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Mind over Matter: How Non-invasive Neuromodulation Is Becoming the Future of Pain Management and Beyond

Scientists have been researching the possibility of using electrical impulses to treat many health conditions. The starting point was the introduction of the first TENS (transcutaneous electrical nerve stimulation) device in the 1970s in the USA. Its goal was to test the tolerance of chronic pain patients to electrical stimulation. In recent years, non-invasive neuromodulation has emerged as a promising field for treating various neurological disorders. This field will likely experience significant growth in the coming decade, thanks to technological advancements, such as AI-powered sophisticated wearables.

Non-invasive neuromodulation is emerging as a novel treatment for several diseases

Non-invasive neuromodulation is a technique that uses external devices to apply electromagnetic fields, electrical currents, or other forms of stimulation to the brain to enable targeted modulation of neural activity.

The technique is effective in treating a range of conditions. Currently, several devices are available in the market for treating illnesses, including chronic pain, tinnitus, diabetic neuropathy, and functional disorders such as bladder and bowel control.

The non-invasive neuromodulation market encompasses a diverse array of devices that can modify neural activity without the need for invasive procedures. This includes transcranial magnetic stimulation (TMS), transcranial direct current stimulation (tDCS), and TENS.

TMS therapy sessions typically require the presence of a physician. An example is MagVenture Pain Therapy, a TMS device developed by a Denmark-based company, MagVenture, for treating chronic pain.

TENS and tDCS devices are portable and, hence, suitable for at-home treatments. The FDA has not yet approved tDCS in the USA for medical use. However, its use falls under the Investigational Device Exception (IDA) regulations. Though it is marketed for non-medical uses in the USA, it is used for medical treatment in regions such as the EU, Singapore, and Israel.

TENS devices are small, battery-powered devices that consist of leads that connect to electrodes, sticky pads placed on the skin in the area that needs stimulation. An example is Cefaly, an FDA-approved TENS device developed by the US-based Cefaly Technology for pain management. This device works by stimulating and desensitizing the primary source of migraine pain, the trigeminal nerve, using a precise electrical impulse.

Mind over Matter How Non-invasive Neuromodulation Is Becoming the Future by EOS Intelligence

Mind over Matter How Non-invasive Neuromodulation Is Becoming the Future by EOS Intelligence

The non-invasive neuromodulation market is showing rapid growth

The global non-invasive neuromodulation devices market for neurological and psychiatric disorders was approximately US$1.2 billion in 2022. According to a 2023 report by Report Prime, an India-based market research firm, the market is projected to grow at a CAGR of 7.2% from 2023 to 2030, reaching US$2.1 billion by 2030.

Several reasons fuel this rapid growth in recent years, including the increasing prevalence of chronic pain and other neurological conditions (especially in older patients), the numerous advantages this technique has over invasive neuromodulation, breakthroughs in non-invasive technology, and a surge in investments.

Increasing incidence of neurological disorders is a major driver

The increasing incidence of debilitating disorders such as chronic pain, Parkinson’s disease, diabetic neuropathy, etc., is creating a pressing need for new and efficient treatments to address these conditions. A 2023 study by the CDC indicated that 20.9% of American adults suffered from chronic pain, and 6.9% experienced chronic pain that significantly limited their daily activities.

Similarly, Parkinson’s disease affects nearly 1 million people in the USA as of 2023, with this number expected to rise to 1.2 million by 2030. These statistics indicate a rising trend of neurological disease burden in the USA.

One major issue that many patients and physicians face is that the current treatments for many of these conditions fall short, leaving a significant gap in the care of patients. Typically, doctors treat people suffering from chronic pain, including that of diabetic neuropathy, using painkillers. Most patients develop medicine tolerance, experience drug-wearing-off effects, or suffer from severe side effects, diminishing the overall treatment effectiveness.

Some patients may even consider drastic and irreversible surgical procedures, such as nerve amputation, due to inadequate treatment results. However, even these may not always provide the desired relief. This indicates the need for a reliable and effective solution for managing the pain, discomfort, and other neurological symptoms associated with the primary disease.

As non-invasive neuromodulation stimulates the brain areas responsible for pain processing, it alters the patient’s perception of pain. With the growing incidence of neurological disorders, this desired neuromodulation effect will continue to be in high demand, contributing to the growth of the non-invasive neuromodulation devices market.

Non-invasive treatments offer advantages over other techniques

Typically, conditions such as chronic pain are treated using a combination of prescription medicines. However, these medications, including NSAIDs, opioids, etc., come with a variety of side effects, such as digestive issues, ulcers, drowsiness, etc. Long-term use of opioids can lead to a range of negative consequences, including the development of tolerance, physical dependence, and opioid use disorder, increasing the risk of overdose and death. Conventional treatment methods also need frequent hospital visits.

Invasive neuromodulation is an effective treatment option for various neurological conditions. However, it also carries significant risks, such as site infections, perioperative and postoperative complications, blood clots, and device malfunctions. Additionally, these techniques often require multiple hospital visits.

In contrast, non-invasive neuromodulation offers several advantages over invasive methods. These wearable devices provide drug-free treatments that do not require surgery or complex installation. As a result, they are easy for patients and physicians to use.

A comprehensive study about the efficacy of various non-invasive devices is not yet available. However, controlled individual studies by companies and developers have shown promising efficiency in treating various diseases.

Moreover, a 2019 report published in BMJ, a peer-reviewed medical journal, indicated that non-invasive neuromodulation offers a potential solution for patients who are sensitive to traditional treatments. This includes patient groups such as pregnant women, adolescents, and those who experience poor tolerability or lack of efficacy from pharmacological treatment therapies.

The need to treat health conditions of these patient groups may drive the use of non-invasive devices to treat health conditions.

Scientific advancements help improve efficacy and expand applications

The non-invasive neuromodulation field has seen several breakthroughs in recent years, showing promise for accelerated R&D and new and improved devices potentially entering the market in the future.

One example is the proprietary magnetic peripheral nerve stimulation (mPNS), marketed as Axon Therapy, developed in 2023 by US-based Neuralace Medical for managing painful diabetic neuropathy.

Another example is vibrotactile stimulation (VTS), currently under development by an interdisciplinary research team from the University of Minnesota as a treatment for spasmodic torticollis or cervical dystonia. This is a painful neurological condition that affects the neck. Though the product is not yet marketable, the clinical trials are showing significant promise.

VTS devices are also being developed for conditions other than pain. An example is the VTS glove, a wearable device developed by researchers at Stanford University and the Georgia Institute of Technology in 2024. The device applies high-frequency vibrations to the hands and fingers to relieve uncontrollable arm and hand spasms. In clinical trials, patients who used the device experienced significant improvements in symptoms, with some even reporting a reduction in their use of oral medications. The team is now working to develop the device further and make it available to patients as a publicly available therapy.

Furthermore, a new treatment for tinnitus, known as bimodal neuromodulation, which involves stimulating two sensory pathways in the brain, has been developed. Ireland-based company Neuromod offers the Lenire device, which combines headphones and a mouthpiece to deliver auditory and tactile stimuli to alleviate symptoms. Patients wear the device for an hour daily, for at least six weeks, to stimulate the tongue with electrical impulses while listening to tones.

These new developments are likely to give momentum to the ongoing R&D in the sector.

Increased investment signals growing market potential

The sector has also seen an uptick in investments. For example, Nalu Medical, a US-based company, secured US$65 million in funding in 2024 to advance its neurostimulation technology for treating chronic pain.

Similarly, Avation Medical, a US-based company focusing on treating bladder issues, raised over US$22 million in 2024 to launch the Vivally System. This wearable device treats patients with urge urinary incontinence (UUI) and overactive bladder (OAB) syndrome.

Massachusetts–based Cognito Therapeutics, a company focused on developing a new therapy for Alzheimer’s disease, raised around US$73 million in 2023.

This increasing trend in R&D investments shows investors’ rising interest in the field of non-invasive neuromodulation, indicating promising market prospects.

Integration with AI is expected to pave the way for future developments

Non-invasive neuromodulation is seeing considerable success in developing closed-loop systems that leverage artificial intelligence (AI) and machine learning (ML) to give customized therapeutic output. This trend is likely to see more growth, especially with the rapid advancements in the field of AI.

An example is Avation Medical’s Vivally System, a wearable neuromodulation device that uses closed-loop, autonomously adjusted electrical stimulation to treat patients with UUI and OAB syndrome. The device uses a smartphone app to calibrate itself for each patient and then delivers a constant current of electrical stimulation through a wearable garment. It also uses an advanced AI-powered closed-loop algorithm and electromyography (a medical test that measures the electrical signals sent by nerves to muscles and received back from them) to enable continuous real-time monitoring and therapy adjustment, ensuring uniformity and safety.

Non-invasive neuromodulation device companies are forming partnerships with research institutes to develop safe ways to treat various disorders using generative AI neuromodulation.

One such collaboration started in June 2024 between US-Swiss generative neuromodulation firm, Dandelion Science and Geneva-based research institute Wyss Center for Bio and Neuroengineering. The goal is to develop a generative AI neuromodulation platform for treating neurodegenerative and neuropsychiatric disorders.

Similar collaborations are likely to commence in the future, as it is clear that the combination of neuromodulation and AI is set to impact various treatment fields significantly.

Expansion of insurance coverage could boost treatment accessibility

Conventionally, chronic pain treatment involves a combination of drugs and physical therapy. The US patient usually pays 20% of their Medicare-approved amount. People with severe pain spend about US$7,700 on annual healthcare expenditures, and with insurance, they have to spend around US$1,600 annually. For the management of pain conditions such as migraine, the out-of-pocket expense can increase to 30% of their Medicare-approved amount.

Non-invasive neuromodulation treatment has proved to be more cost-effective than conventional treatments. Although many non-invasive pain management devices are not covered by insurance, some are eligible for reimbursement.

For instance, Nerivio, a wearable device for treating migraine, is covered by Medicaid and Highmark Insurance. Moreover, Theranica, Nerivio’s Israel-based parent company, introduced the Nerivio Savings Program in October 2020 to help US patients access the device. It is a reimbursement plan that allows patients to receive their first device for a copay of up to US$49 (for 18 treatments), depending on their insurance coverage. The refill costs US$89 for those without insurance.

Additionally, patients may be able to use Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) to pay for specific approved devices. An example is Cefaly, for which, though not covered by insurance in the USA, consumers can use HSA and FSA funds or finance their purchase with Affirm (a US-based financial technology company that offers flexible payment options) for US$36 per month upon qualifying. Without insurance or other financial aid, the upfront cost varies from US$330 to US$430, and an additional US$25 for three reusable electrodes, each usable up to 20 times each.

Non-invasive neuromodulation devices’ high upfront cost remains the key barrier to broader adoption 

Overall, non-invasive neuromodulation devices offer a more cost-effective option than other treatments. The most significant barrier for patients opting for non-invasive neuromodulation is the high upfront cost, especially with no insurance coverage.

For example, Israel-based Zida Therapeutics’ Zida Control Sock, a device to treat urinary incontinence, comes with an upfront cost of US$750. Without insurance, many people may find it challenging to cover this cost. This is particularly true for older adults whom conditions such as chronic pain and urinary incontinence affect the most. According to 2023 data released by the US Census Bureau, 14.1% of Americans aged 65 and older live in poverty, making these devices less accessible to them without insurance coverage.

However, this situation may improve as several companies are now in talks to receive insurance coverage for their devices. With an increase in R&D, companies can also offer robust evidence to demonstrate the effectiveness and long-term safety of the devices, prompting insurance companies to provide coverage.

With reimbursement available for companies such as Theranica and Zida, and with several other companies such as Neurovalens planning to enter discussions with insurance providers to achieve reimbursement status, the accessibility has a chance to improve in the near future. This will likely drive adoption in the coming years.

EOS Perspective

Adopting non-invasive devices will likely increase as a standalone treatment and adjunct therapy. While non-invasive treatments currently focus on conditions such as chronic pain, tinnitus, urinary incontinence, etc., experts believe that this will soon expand into other neurological conditions, including ALS, and Parkinson’s disease.

Currently, there are only seven FDA-approved drugs for ALS treatment, all of them with limited effectiveness. The significant unmet need in this field presents a compelling opportunity for non-invasive neuromodulation companies. PathMaker Neurosystems is among the few companies conducting feasibility studies and developing non-invasive neuromodulation treatment options for ALS patients.

Research is also underway to develop a non-invasive treatment for Parkinson’s disease, which was previously treated using invasive techniques. Czech Republic-based STIMVIA has reported promising results from its initial pilot study of a new treatment for patients with Parkinson’s disease as an add-on therapy.

Several new non-invasive devices are also in the development pipeline, and their clinical trials are promising. An example that has shown positive results in a pivotal trial is a treatment for improving upper limb function by Netherlands-based ONWARD Medicals.

Non-invasive neuromodulation has the potential to revolutionize the treatment of chronic pain and other neurological disorders. As the field continues to evolve, with advancements in AI-powered wearables and increased investment in R&D, we can expect to see even more innovative solutions emerge in the coming years.

New Directions in Alzheimer’s Diagnostics Will Blood Tests Replace CSF and PET by EOS Intelligence
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New Directions in Alzheimer’s Diagnostics: Will Blood Tests Replace CSF and PET?

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Around three-fourths of dementia cases continue to remain undiagnosed even though the incidence of Alzheimer’s disease (AD) is rapidly growing across the globe. AD affects about 60-80% of dementia patients worldwide. Early diagnosis of AD is critical in forging beneficial medical care strategies and enhancing patient outcomes. Current AD diagnostic tests, such as cerebrospinal fluid (CSF) and PET scans, are either invasive or associated with side effects and are generally expensive. This calls for developing less invasive, safer, faster, and more accurate AD diagnostics, such as blood tests.

Blood-based tests promise accurate and non-invasive AD diagnosis

Researchers are developing less invasive and less costly blood tests that are likely to be more accurate than contemporary tests. There are currently two types of AD diagnostics blood-based tests: the phosphorylated tau217 (ptau217) test and the amyloid beta (Aβ) 42/40 plasma ratio test.

The ptau217 biomarker has the potential to differentiate AD from other neurodegenerative diseases, as ptau217 levels can be high in AD patients before the onset of clinical symptoms. Studies have proved that ptau217 tests can detect AD early on and monitor disease progression.

The Aβ 42/40 plasma ratio tests detect amyloid beta protein plaques in the brain that cause cognitive impairment. Due to the lack of a certified reference standard for measuring plasma Aβ42 and Aβ40’s absolute values, ptau217 may be better than an amyloid beta ratio test. However, both tests are accurate enough to diagnose AD.

Notably, ptau217 blood tests are believed to give up to 95% accurate results when coupled with CSF tests as against 90% accuracy of CSF when used as a standalone method. At the same time, amyloid beta (Aβ) 42/40 ratio tests are known to give around 80% accuracy in detecting amyloid positivity.

Many laboratories and diagnostic companies have designed or are designing ptau217 assays. C2N Diagnostics, Quanterix, Quest Diagnostics, and Laboratory Corporation of America (LabCorp) offer ptau217 laboratory-developed tests (LDTs).

Low cost of blood-based AD tests can also be a growth-driving factor

A major push towards blood-based AD diagnostics comes from the tests’ lower cost in comparison to PET and CSF. The cost of blood tests typically ranges from US$200 to US$1,500, depending on the test provider.

The cost of PET ranges from US$1,200 to US$18,000, while the average price of CSF tests is around US$4,000 (in both cases, the actual cost depends on the type of facility, location, and the extent of insurance coverage).

As of 2023, Medicare and Medicaid covered PET scans for AD in the USA outside clinical trials. Therefore, AD patients need to pay around 20% of the PET cost, which translates to US$240-US$3,600, even after insurance coverage.

Considering the high share of dementia and AD cases remaining undiagnosed, there is a chance that the lower cost of blood-based tests can help contribute to higher accessibility to testing and ultimately improve the early detection rate.

Large AD diagnostic players partner with smaller ones to develop new tests

In an attempt to develop ptau217 assays, major diagnostics companies tend to recognize the development progress made by smaller players. ALZpath, a novel AD diagnostic solutions provider, is the pioneer of the ptau217 antibody, which helps in the early detection of the disease. Large players such as Roche and Beckman Coulter are enticed by the synergistic opportunities ALZpath offers.

In June 2024, Roche partnered with ALZpath, an early-stage biopharmaceutical company specializing in AD diagnostics, to launch the plasma ptau217 In-Vitro Diagnostic (IVD) test. As per the partnership, Roche will use ALZpath’s ptau217 antibody to design and commercialize an IVD test to detect AD with the help of Roche’s Elecsys platform.

In July 2024, Beckman Coulter also partnered with ALZpath to utilize ALZpath’s proprietary ptau217 antibody to detect AD on Beckman Coulter’s DxI 9000 Immunoassay Analyzer.

AD diagnostics firms receive funding from various sources, including drugmakers

Constantiam Biosciences, a bioinformatic analysis firm, received a US$485,000 Phase 1 SBIR grant (Small Business Innovation Research) from the National Institute on Aging to develop a tool for deciphering risk variants pertaining to AD and related dementias (AD/ADRD) in September 2024.

Biogen and Eli Lilly invested in the Diagnostics Accelerator, a funding initiative started in 2018, at the Alzheimer’s Drug Discovery Foundation (ADDF) in 2020. The Diagnostics Accelerator has invested over US$60 million across 58 projects, most of which are blood tests. In its Q4 2023 earnings call, Biogen emphasized its support for developing tau biomarker diagnostics and pathways. Its partner, Eisai, has invested around US$15 million in C2N Diagnostics and collaborated with IVD companies such as Sysmex, among others. In September 2024, ADDF invested US$7 million in C2N Diagnostics to further develop blood-based AD detection tests.

Other investors have also identified the opportunities AD diagnostic offers. A 2024 market research report by Market Research Future estimated that the AD diagnostic industry would nearly double, from US$4.5 billion in 2023 to US$8.8 billion in 2032.

FDA stands as an accelerating force for blood-based tests via breakthrough device designation

For a while now, the FDA has been granting breakthrough device designation (BDD) to devices that could address life-threatening diseases with unmet medical needs. BDD facilitates the expedited development, review, and assessment of medical devices, ensuring quicker access for patients and medical professionals. It would not be too ambitious to conclude that strong positive evidence from several uses and studies of ptau217 tests is likely to compel the FDA to approve them for use in the near future. The first sign of this is that the FDA is granting BDD status to multiple ptau217 blood tests.

In March 2024, the FDA granted BDD to Simoa ptau217 by Quanterix. This blood test can detect AD in patients with cognitive ailments even before signs and symptoms start to appear.

In April 2024, the FDA gave BDD to Roche’s Elecsys ptau217 plasma biomarker test to augment early diagnosis of AD. Roche partnered with Eli Lilly to develop this blood test that will widen and accelerate AD patients’ access to diagnosis and suitable medical attention and care.

In early 2019, the FDA gave BDD to C2N Diagnostics’ blood test to detect AD. The BDD status of AD blood tests will likely accelerate the development, review, and assessment processes of these tests, improving patient outcomes.

Some FDA-approved AD drugs have used blood tests in clinical trials. Eli Lilly’s Kisunla and Esai/Biogen’s Leqembi have successfully utilized C₂N Diagnostics’ Precivity-ptau217 blood biomarker in their clinical trials. The FDA approved both drugs to manage AD. This improves the chances of this blood test getting approved by the FDA.

Lumipulse G β-Amyloid 1-42 Plasma Ratio test by Fujirebio Diagnostics received BDD from the FDA in 2019. The company submitted an FDA filing for the Lumipulse G ptau217/β-Amyloid 1-42 Plasma Ratio IVD test in September 2024. If approved, this test will become the first commercially available blood-based IVD test in the USA to detect AD.

EOS Perspective

There has been considerable progress in developing blood-based assays for AD diagnosis by pharma and diagnostics companies. However, a good portion of the liability for their products not reaching market readiness faster lies (and will probably remain to lie) on the approving authorities that are unable to accelerate the administrative steps.

Some blood tests, such as PrecivityAD, are approved for safe use in the EU but are still not in the USA. While such approval is typically a time-consuming process and requires a thorough investigation, the blood tests will enter the market at a larger scale across several geographies only if the authorities fast-track their approvals. This is particularly applicable to blood tests previously successfully used in clinical trials for approved AD drugs and for tests that have already attained BDD status from the FDA.

As an example, PrecivityAD by C2N Diagnostics received BDD status in 2019 from the FDA. However, the FDA has still not approved the blood test for safe use in the USA. This is still despite the fact that PrecivityAD and other C2N Diagnostics’ assays have been utilized in over 150 AD and other research studies across the USA and abroad. FDA’s time-consuming and lengthy review procedures and bureaucratic reasons are some of the factors responsible for the delay in approval. In addition to this, C2N Diagnostics needs to submit some more evidential data pertaining to the accuracy of PrecivityAD, which is likely to take time to produce.

These procedural and administrative impediments, along with the time taken by the device makers to present the data to the FDA, will likely continue to put a brake on the blood-based tests becoming available to patients in the near future.

The situation will remain so, given the FDA’s recent decision to regulate new LDTs involving diagnostic tests that use body fluids such as blood, saliva, CSF, or tissue on similar lines as medical devices (meaning LDTs must comply with the same standards as medical devices). As per this regulation, LDTs need to prove the accuracy of their tests. This decision will have both winners and losers in the AD stakeholder ecosystem.

Researchers and physicians are looking at this regulation with a positive stride as this step will reduce the number of tests with unconfirmed accuracy from the market in the USA. This is undoubtedly a positive change for patients’ safety, reducing the number of misdiagnoses and accelerating correct diagnoses.

On the other hand, smaller start-ups and diagnostic companies are not likely to benefit from this decision as it will restrict the development of new innovative tests vis-à-vis large diagnostic companies. Overall, the decision will likely decelerate the approval of blood-based AD tests or at least will require much more paperwork and proof of accuracy from the device makers. This decision will take effect in multiple phases over four years, starting from July 2024.

On the research and development side of the Alzheimer’s disease diagnostics space, a certain level of symbiosis between drug producers and diagnostic solution providers will continue to impact the market positively. Drugmakers are partnering with or investing in diagnostic companies to leverage the latter’s innovative blood-based biomarkers (BBBM) technologies in the clinical trials of their own drug candidates. This trend is likely to continue.

Not only drugmakers but also more prominent healthcare diagnostics companies, such as Roche and Beckman Coulter, are partnering with early-stage biopharmaceutical companies, such as ALZpath, to develop and commercialize AD ptau217 tests. Collaborations such as these are a testimony to the fact that it is mutually beneficial for AD industry stakeholders to work in tandem to advance AD diagnostics research, a significant growth-driving factor for the market.

Phase 3 Drug Candidates - A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape by EOS Intelligence
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Phase 3 Drug Candidates – A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape?

Many biopharmaceutical companies, such as AriBio, Annovis Bio, Athira Pharma, Cassava Sciences, and Alzheon, specializing in treating neurodegenerative diseases, are developing drugs for Alzheimer’s disease (AD) that are currently in phase 3 of clinical trials. If approved, these drugs can ameliorate the AD treatment approaches to a considerable extent. A major prerequisite to this is for concerned authorities to take concrete steps to fast-track clinical trials and increase AD research investment.

With only a 1% success rate of clinical trials in drug development until 2019, the AD treatment gap is alarming. A 99% failure rate means there is a very limited influx of new, more effective, and more advanced AD drugs into the market, and the gap between available treatment options and the rising number of AD cases is increasing.

The disease burden of Alzheimer’s will rise from US$1.3 trillion in 2020 to US$2.8 trillion by 2030 globally. With the rise in the aging population across the globe, the estimated number of AD patients will increase from 55 million in 2020 to 78 million in 2030.

However, recent drug approvals, such as Elli Lilly’s Kisunla (Donanemab) in July 2024 and Biogen/Eisai’s Leqembi (Lecanemab) in January 2023, bring a ray of hope for a new approach to AD treatment.

Initial hopes for new drugs can be premature

New drugs do enter the market from time to time. However, their impact on AD treatment in the long term is not always significant. An example of this is Biogen’s Aduhelm. Based on its ability to reduce amyloid protein in the brain, the FDA approved Aduhelm (Aducanumab) in 2021 in an accelerated approval route for AD treatment.

However, in 2024, Biogen discontinued the drug in the alleged desire to reprioritize its resources in AD treatment. Experts cite weak clinical evidence for efficacy, serious side effect risks, a high price point, and poor sales among the many reasons for Aduhelm’s withdrawal from the market.

AD drug candidates succumb to clinical failures

Eisai and Biogen have been working together since 2014 to develop and commercialize AD drugs. However, they have faced clinical drug failures, similarly to many other pharmaceutical companies during that time. For instance, they had to terminate Elenbecestat, one of their AD drugs, in phase 2 clinical trial in 2019 following an unfavorable risk-benefit ratio finding by the Data Safety Monitoring Board (DSMB).

Eisai launched its first AD drug, Aricept, an acetylcholinesterase inhibitor, in the USA in 1997 in collaboration with Pfizer. The annual peak sales of Aricept were US$2.74 billion before its patent expiry in 2010. However, Pfizer exited neuroscience drug research and development in 2018 after the failure of its AD drug candidates, such as Dimebon and Bapineuzumab.

Clinical challenges in Alzheimer’s research and reallocation of resources were among the other reasons for Pfizer’s exit from neuroscience R&D and drug development. Nevertheless, Pfizer did not desert the neuroscience space completely, rather forged a spin-off company called Cerevel Therapeutics in partnership with Bain Capital.

Phase 3 Drug Candidates - A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape by EOS Intelligence

Phase 3 Drug Candidates – A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape by EOS Intelligence

Recent drug launches focus on amyloid beta targeting mechanism

In January 2023, the FDA approved Leqembi (Lecanemab), a drug by Biogen and Eisai, for AD treatment. It is a monoclonal antibody that clears away the amyloid beta plaques known to cause cognitive impairment in AD patients. With MHRA’s (Medicines and Healthcare Products Regulatory Agency) approval of Leqembi, Great Britain becomes the first European country to authorize the drug for the treatment of early-stage AD as of August 2024.

In July 2024, the FDA approved Kisunla (Donanemab) by Eli Lilly to treat early-stage AD. The drug’s mechanism of action is the same principle as that of Leqembi, an amyloid beta protein plaque targeting mechanism. Kisunla becomes the third anti-amyloid drug approved for AD treatment, following Aduhelm (now discontinued) and Leqembi. Both Kisunla and Leqembi drugs carry the risks of the formation of temporary lumps in the brain that can be fatal. Therefore, physicians advise regular brain MRIs to alleviate this risk. Neurologists and researchers are in disagreement over whether the benefits offered by these drugs are clinically meaningful.

Researchers are still studying the side effects of these two drugs. Prescribing them requires confirmation of the presence of amyloid protein in the brain. Therefore, PET scans and CSF tests are required before such a prescription.

The FDA has approved both drugs in the USA for intravenous infusions (IV) in the early stages of AD. Kisunla is administered every four weeks instead of every two for Leqembi. Therefore, Kisunla offers greater convenience compared to Leqembi.

Experts from Bloomberg Intelligence suggest that Eli Lilly will likely surpass Biogen and Eisai’s reign at the top of the AD drug market by capturing around 50% of the US$13 billion market globally by 2030. This is partly because of Kisunla’s convenient dosing and the fact that AD patients can stop taking the drug after the amyloid levels touch the clearance threshold.

Newer therapeutic approach-based drugs are in phase 3 clinical trials

Apart from the amyloid beta therapeutic approach, AD researchers are exploring the role of other mechanisms in AD treatment, such as anti-tau antibodies, neurotransmitter receptors, and synaptic plasticity or neuroprotection. Drugs based on these mechanisms are currently in phase 3 of clinical trials.

The Washington University School of Medicine’s DIAN-TU (Dominantly Inherited Alzheimer Network Trials Unit) trial is testing Lecanemab plus Eisai’s investigational anti-tau antibody E2814 in patients with early-onset AD caused by a genetic mutation. E2814 prevents the spreading of tau seeds in the brains of AD patients. This drug is in phase 3 clinical trial. The clinical study commenced in June 2024 and will complete by November 2029.

ACP-204 by Acadia Pharmaceuticals is also in phase 3 clinical trial for AD. The agent acts as an inverse agonist at the 5-HT2A serotonin receptor. FDA has approved Acadia’s previous 5-HT2A inverse agonist, Nuplazid, for Parkinson’s disease psychosis. ACP-204 will be the first drug for AD treatment in Acadia’s product portfolio if approved.

Another drug in phase 3 trial is AriBio’s AR1001, a phosphodiesterase-5 (PDE5) inhibitor. Apart from AR1001, two more AD drugs are in AriBio’s pipeline, AR1002 and AR1003 that are currently under the investigational new drug-enabling stage of clinical trials.

For better patient outcomes, researchers are attempting to develop AD drugs with non-invasive modes of administration that are likely to be less expensive and equally effective compared to AD drugs administered intravenously.

The safety and effectiveness of oral therapy candidate Buntanetap, developed by Annovis Bio, are comparable in people with early onset AD regardless of whether they do or do not carry a genetic risk factor APOE4. That is according to new data from a phase 2/3 clinical trial that tested three doses of Buntanetap against a placebo in more than 300 patients with the neurodegenerative disease. Buntanetap modulates protein production to reduce clumping. The competitive advantage of Annovis Bio over its peers is the fact that Buntanetap targets multiple proteins in the brain, such as amyloid beta, tau, alpha-synuclein, and TDP43, making it more effective than AD drugs that target a single protein.

Apart from Buntanetap, Annovis Bio has another oral drug to treat advanced AD and dementia in its pipeline, ANVS301, which is in phase 1 of clinical trial. In July 2024, Annovis Bio received FDA approval to transition to a new solid form of Buntanetap in future clinical trials allowing the company to refine its drug formulation, potentially improving its efficacy and safety profiles.

Another promising AD drug candidate, Fosgonimeton by Athira Pharma, is a small-molecule positive modulator of the hepatocyte growth factor (HGF) system, previously showing neuroprotective, neurotrophic, and anti-inflammatory effects in preclinical models of dementia. This drug is in phase 3 clinical trial. Athira Pharma ended 2023 with a strong balance sheet, signaling its better financial position to augment its ongoing pipeline development.

Eli Lilly’s new drug Remternetug works as pyroglutamyl (3)-amyloid beta-protein (3-42) inhibitors, positioning it as a promising AD drug. Remternetug will join Eli Lilly’s portfolio as a second AD drug if approved.

Simufilam by Cassava Sciences is a proprietary, small-molecule oral drug that restores the normal shape and function of altered filamin A (FLNA), a scaffolding protein, in the brain. It is now in phase 3 clinical study to test this new and promising scientific approach to treating and diagnosing AD. The mechanism of action of this drug involves stabilizing a critical protein in the brain instead of removing it. This novel approach distinguishes Cassava Sciences’ drug from other treatments that predominantly focus on amyloid-beta or tau proteins. In May 2024, Cassava Sciences raised US$125 million by selling its stock to shareholders. The funds will be utilized for the continued development of Simufilam.

Valiltramiprosate by Alzheon is potentially the first oral disease-modifying treatment for AD. Valiltramiprosate is well differentiated from plaque-clearing antibodies in development for AD due to its novel mechanism of action, oral mode of administration, and potential efficacy in a genetically targeted population. In October 2017, Valiltramiprosate/ALZ-801 received FDA Fast Track designation for AD investigation. Due to Alzheon’s significant progress in AD drug development, the company has attracted a lot of investors since 2022. Alzheon received US$100 million in June 2024 in Series E venture capital funding which will be utilized to further develop and commercialize Valiltramiprosate. This is in addition to US$50 million received in series D round of funding in 2022.

Big names dominate the competition, with clinical trials in progress by smaller biopharma players

On the competitive landscape front, the AD drug market is highly competitive, with many pharmaceutical companies financing R&D to engineer new drugs that could potentially delay the progression of AD and/or restore neuronal health. The global AD therapeutics market size was US$4.8 billion in 2023 and will surpass US$7.5 billion by 2031, as per Towards Healthcare, a healthcare consulting firm.

A couple of large players still dominate the global AD therapeutics market. Interestingly, they are not the only ones active in the AD treatment development, as several smaller biopharmaceutical companies that specialize in neurodegenerative disease treatment are working on AD drugs (many currently in phase 3 of clinical trials).

High R&D costs are a considerable factor in slowing the progress down

Between 1995 and 2021, the cumulative private spend (total R&D expenditure by pharmaceutical companies, does not include federal funding) on clinical stage R&D for AD was US$42.5 billion, with the largest share of 57% (US$24.1 billion) incurred during phase 3. During the same period, the FDA approved 878 drugs across all therapeutic areas; only six of these drugs were for AD treatment (four cholinesterase inhibitors [ChEIs], memantine, and aducanumab). These statistics speak volumes of the complex, expensive, time-consuming, and predominantly unsuccessful nature of AD clinical trials. This ultimately leads to exorbitant prices of AD drugs.

A range of factors drive the R&D costs and, in turn, the price of AD drugs. A significant component here is patient screening, which contributes to 50-70% of the cost. Patient recruitment and retention are also challenging, given the considerable length of such trials.

Moreover, patient recruitment challenges stunt the progress of AD clinical trials. The recruitment rate for AD clinical trials is as low as one patient per site per month. In terms of eligibility, 99% of AD patients who are eligible for participation in a clinical trial never consider taking part. This further increases the time taken to conduct AD clinical trials.

EOS Perspective

After decades of failure in clinical trials, two anti-amyloid AD drugs, Kisunla and Leqembi, are available in the market, forming a duopoly in the USA. There are several promising drugs in phase 3 clinical trials with a new mechanism of action apart from amyloid beta protein inhibitors. However, the disease management landscape is prone to unforeseen changes, such as the withdrawal of drugs owing to safety, efficacy, and pricing issues.

The AD treatment landscape faces challenges such as drug inefficacy, complex pathophysiology of AD, expensive and time-consuming clinical trials, delays in diagnosis by physicians, behavioral changes and deteriorating mental health of AD patients, and severe side effects of medications. These challenges will continue to impede the development of new disease management approaches.

An issue that is very likely to continue to challenge progress in developing better treatment options for AD is the severe lack of funding. Dementia research is extremely underfunded compared to HIV/AIDS, cancer, and COVID-19 in the USA. Irrespective of the fact that the deaths attributed to AD are on par with cancer, the difference between the annual US federal government funding for AD vis-à-vis cancer is strikingly huge.

AD drug development is a tough market to operate in. The ongoing issue with AD research funding persists, and there do not seem to be changes in federal funding soon. On top of that, the slow progress in successful R&D and many failed clinical research trials will likely make private-sector investors hesitate or withdraw.

In addition to this, AD drug manufacturers will also continue to face the challenge of low to modest drug sales due to poor adoption rates stemming from issues like restricted coverage.

As of June 2023, Medicare was covering AD drugs that slow down the progress of the disease provided a physician agrees to the collection of real-world evidence of these AD drugs, as per the Centers for Medicare & Medicaid Services (CMS). However, there is a significant underlying problem with drugs for AD treatment. When the drug finally enters the market, patients cannot afford the treatment, and the coverage is restricted and sometimes withdrawn. There is no foreseeable change to this impasse, and hence, the AD treatment development is likely to be slow.

If reimbursement of AD drugs is removed, patients are likely to stop administering AD drugs altogether and adopt alternative healthcare resources such as antidepressants, as found in a 2021 study by researchers from Paris-Saclay University and Memory Center of Sainte Périne Hospital in France.

The reluctance of payers to cover the treatment cost for AD is influenced by several factors beyond just the high cost of the drug. Factors include cost-effectiveness of treatments, uncertain long-term safety and efficacy benefits of treatments, clinical guidelines and recommendations, availability of alternative treatments including generics (from drug makers such as Cadila, Cipla, Dr. Reddy’s, among others), and regulatory and reimbursement policies.

The future of AD treatment approaches will continue to remain bleak, and patients will be left with only a few available drug options unless the right authorities set out a plan for fast-track clinical trial processes, increase AD research investment, and support broader insurance coverage.

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