Turning Point: COVID-19 Highlights How Important Diagnostics Will Be to Our Future
The criticism of the United States’ initial limited COVID-19 diagnostic testing has given way to a much-needed clarion call for antibody testing to help spur our economic rebound. We expect that in the post-COVID-19 world, buyers and investors will be more focused than ever before on innovative diagnostic testing companies that offer the opportunity for enhanced information while improving patient care and outcomes. Moreover, we anticipate that this demand for increased access to cutting-edge diagnostics will yield increased transaction interest in the following sectors.
Point of Care (POC) Solutions
As evidenced by the COVID-19 pandemic, having rapid and actionable information from POC testing can be a game changer. Clinicians can gain valuable insights into the cause of a patient’s symptoms and can recommend a course of treatment before the patient leaves. The keys to POC success are systems that are simple to use and generate results that offer high sensitivity and specificity. Innovators in this segment are developing systems addressing a broader menu of infectious diseases with faster testing speeds, lower capital equipment fixed costs, and variable per test costs.
Empowering the Consumer
Patients are on an ongoing journey to control more of their healthcare experience and diagnostics are no exception. Rather than waiting for annual in-office check-up, consumers are supplementing their healthcare knowledge with periodic testing. From lifestyle-based food sensitivity testing to routine bloodwork and STD testing, healthcare companies (including diagnostic players) are increasingly seeking to build direct relationships with consumers. Winners in this segment are building seamless tech with highly-tailored information-based solutions for outstanding consumer experiences and trusted brands that stand for accuracy and quality.
Significant advancements in testing technology platforms like PCR and NGS have increased the breadth of test menus and diagnostic applications once reserved for centralized, specialized research institutions. Molecular testing is now regularly being utilized for COVID-19, influenza and other respiratory testing, urinary tract infections and STDs, to name a few. We see greater interest in this segment with continued innovation and broader adoption into routine care protocols.
Advancements in drug discovery and therapeutics are creating a massive need for advanced diagnostics to support the work of biotech and pharma. Specifically, biomarkers are playing an increasingly critical role in drug discovery and patient treatment. Whether it is genomic-based patient selection or tumor pathology, biomarker testing and monitoring can stratify patient responses and help predict the effect of the drug. Diagnostics innovators with such value-added capabilities are in high demand for lucrative pharma work. Already a hot area for investment and acquisitions, we anticipate increasing activity with new innovations emerging and strategic players seeking to augment their portfolio offerings.
An unfortunate legacy of COVID-19 is the critical importance that better diagnostics tools could have played to mitigate the virus’ impact on our health and economy. As widely stated in the industry, lab services account for less than 3% of total U.S. healthcare spending today, even though their test results impact a majority of all clinical decisions regarding patient care. This pandemic should drive greater investment into the vital diagnostics sector and hopefully yield greater access and insights, so we can hopefully be better prepared for the future.