- Medical device makers are putting more of their investment dollars into developing wearable technologies while de-emphasizing robotics, a new survey from global accounting firm BDO suggests.
- The shift in investment focus comes against a backdrop of slowing overall R&D spending among life science organizations, including medical technology and device companies, according to the survey of chief financial officers.
- The top concerns of device and drug developers are also evolving, with access to technical expertise and resources the biggest worry of 29% of those respondents, followed by data protection and governance (28%), the poll found.
The popularity of wearables for at-home monitoring of health indicators ranging from blood pressure and ECG readings to glucose and oxygen saturation levels gained momentum during the COVID-19 pandemic, and patients have come to like the convenience, BDO reported.
The larger number of organizations looking to pull out of robotic projects could reflect acknowledgment of the challenges involved in achieving a successful commercial launch, said Doug Gustin, a BDO partner who leads the firm’s medical device sector.
“Robotics sometimes has a higher and longer cost pathway and regulatory pathway,” Gustin said. “Some of those companies may need to have a quicker path to (return on investment) for some of their investors.”
Wearables, on the other hand, tend to face a lower regulatory bar and can lead to a quicker ROI, Gustin added.
BDO found that 72% of medical device and medtech companies plan to invest in developing wearables, compared to 52% that expect to fund robotic projects.
Among companies already developing robotic systems, 28% said they planned to end their investment, compared to 16% that intend to stop funding development of wearables.
For its survey, BDO polled 100 middle-market life sciences CFOs in October 2022. The results showed that while the flow of cash into life sciences has slowed, companies still plan to invest significant resources in R&D, with 65% saying they will increase research spending. However, more respondents (19%) said they plan to reduce R&D spending than in the past three years. Just 2% planned to cut their R&D investments last year.
Device and drug company CFOs ranked access to technical expertise and data protection concerns as bigger worries this year than access to raw materials, supply management, regulatory compliance, or access to patients.