analysis of the global tissue diagnostics market

Analysis of the Global Tissue Diagnostics Market Reimbursement Cuts and Hospital Consolidation Impede the Uptake of

Automated Equipment in Laboratories

NC76-52

November 2013

2 NC76-52

Primary research,

80%

Secondary research,

20%

Most of the quantitative and qualitative information in this research service was acquired through primary

research regarding reagent and service providers from the microRNA (or miRNA) market. Most consults

were vice presidents (VPs) of business units, VPs of marketing, product managers, marketing managers,

marketing directors, and business development directors from various companies within the mass

spectrometry market.

The analysis contained in this research service is based on the following:

• information collected through discussions with market participants and from secondary sources—

government, industry associations, companies, Web sites, and other credible sources

• public announcements and plans by OEMs*, suppliers, new entrants, and others

• Frost & Sullivan’s published research, market, and technology expertise

Forecasts are based on the data and analyses relating to industry challenges, market drivers and

restraints, and market trends. If specific revenues or market sizes were unavailable, estimates were

derived through consultations with industry experts augmented by secondary research. Growth trends

specific to certain market participants are based on consultations, past growth rates, and technology

reviews.

Industry-specific information obtained includes:

• revenue breakdowns by technology segments and

regions specific to tissue diagnostics

• company revenues, market share estimates, and

projected growth rates of various competitors

• market information, including customer and regional

and technology trends

• market drivers, restraints, and challenges

Note: *original equipment manufacturers (OEMs). All figures are rounded. The base year is 2012. Source: Frost & Sullivan

Methodology

Total Tissue Diagnostics Market: Research

Methodology, Global, 2012

3 NC76-52

This study aims to cover the 2 technology segments for the following geographic regions:

• US

• Western Europe: United Kingdom (UK), Germany, Italy, France, Spain, Benelux (Belgium, the

Netherlands, and Luxembourg), and Scandinavia

• APAC: Singapore, Japan, Taiwan, India, China, South Korea, Australia, New Zealand, the Middle

East, and Malaysia

• ROW: Africa, Latin America, and Russia

Scope and Segmentation

Geographic Coverage Global

Geographic

Segmentation US, Western Europe, APAC, and ROW

Technology

Segmentation

Pre-analytical: histology equipment and

reagents, H&E* instruments and

reagents

Advance stains*: IHC, ISH, SS

Study Period 2009–2017

Base Year 2012

Forecast Period 2013–2017

Monetary Unit US Dollars

Note: Hematoxylin and eosin (H&E); immunohistochemistry (IHC); in-situ hybridisation

(ISH); special stains (SS). Source: Frost & Sullivan

4 NC76-52

Key Questions This Study Will Answer

What are the key technologies currently used for tissue-based diagnosis? Which of the market

segments are likely to experience growth?

Are the products/services offered currently meeting customer needs, or is additional development

needed?

Which participants are competing in the areas of pre-analytics and advance stains within the realm

of anatomic pathology and why?

How will the structure of the market change over time? Is it ripe for acquisitions?

How supportive are the current regulatory bodies? What impact do they have in various regions?

What are the key challenges that affect the uptake of automated systems in the US, Western

Europe, and APAC and ROW?

Source: Frost & Sullivan

5 NC76-52

Advanced Cell Diagnostics (ACD)

(US) HistoRx (Novartis Company)

(US) Biomarker Strategies LLC

(US)

Key Companies to Watch

This US based company has

long-term commercialization

plans in Western Europe and

Asia for its SnapPath platform.

The platform is in research use

with many units currently used

for preclinical and clinical

studies. The platform offers live

tumour biopsy processing and

testing. Additionally, the

company offers ex- in vivo

biomarker tests for drug

selection.

In 2012, the company was

acquired by Genoptix which is a

part of the pharmaceutical

company Novartis. Since 2009,

HistroRx has sought active

partnerships with Aperio and

Caliper, both of which have a

strong presence in the area of

digital imaging. Histo Rx’s

AQUA® technology offers

quantitative IHC and delivers

multi-parametric analysis of

protein in clinical specimens.

For additional information on companies, click here. Source: Frost & Sullivan

ACD operates in the US and

Western Europe (in Europe through

a distributor network). The company

is currently actively pursing

partnership opportunities for their

proprietory RNAscope® technology

in the area of personalized

medicine. ACD offers services

based on this automated multiplex

chromogenic in-situ hybridization

(ISH) platform. The company has

already partnered with CST and

Definiens in Western Europe to

expand its base.

6 NC76-52

Total Tissue Diagnostics Market

Pre-analytical Advance Stains

Total Tissue Diagnostics Market: Market Segmentation, Global, 2012

• The pre-analytical segment includes these

products:

o Tissue embedding equipment

o Tissue processing

o Microtomes/cryostats

o Cover slipping machine

o Histology slide stains (H&E)

o Routine stains

• The advance stains segment

includes these products:

o IHC and ISH slide stainers

o IHC/ISH/SS reagent kits

*Note: This study does not include cytology and other imaging products associated with cytology

(e.g., cytometry, microscopy).

Market Segmentation


7 NC76-52

US, 52.0%

Western Europe, 27.0%

APAC and ROW, 21.0%

Key Takeaway: During the forecast period, opportunities in emerging markets loom large.

APAC and ROW, 29.1%


US, 44.8%

Total Tissue Diagnostics Market: Revenue

Breakdown by Geographic Region, Global,

2012

Total Tissue Diagnostics Market: Revenue

Breakdown by Geographic Region, Global,

2017

Global Market Perspective

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

8 NC76-52

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

APAC and ROW, 22.6%

US, 47.9%


APAC and ROW, 18.8%

US, 57.7%


APAC and ROW, 30.0%

US, 40.8%


APAC and ROW, 27.7%

US, 51.9%


In the overall market for advance stains segment, sales in the emerging countries will grow while in the US

market, sales will shrink. In Western Europe, the pre-analytical segment might shrink to 20.4%, thus creating

opportunities for the US, APAC, and ROW markets. The trend is due in large part to many laboratories (about

70.0%) in Western Europe that adhere to an automated workflow process.

Global Revenue Forecast

Advance Stains Segment: Global, 2012 Advance Stains Segment: Global, 2017

Pre-analytical Segment: Global, 2012 Pre-analytical Segment: Global, 2017

9 NC76-52

Western European Tissue Diagnostics Market—Percent

Regional Analysis

Scandinavia— 4.2%

UK— 12.5%

Spain— 14.2%

Italy— 19.0%

Benelux— 6.1%

Germany— 24.0% France— 20.0%

Key Takeaway: Germany, France, and Italy lead as the top 3 revenue contributors to the Western

European tissue diagnostics market.

Tissue Diagnostics Market: Percent Regional Analysis, Western Europe, 2012


10 NC76-52

Lower

Growth

Impact

Medium

Growth

Impact

Higher

Growth

Impact

Higher Impact

Projected

Impact on the

Tissue

Diagnostics

Market

Lower Impact

Certainty Low High

Market Impact of Top 8 Trends

Tissue Diagnostics Market: Impact of Top 8 Trends, Western Europe, 2012

Lack of pathologists

necessitating automated

workflow

Reimbursement delays

Used and

refurbished

instrument

market

Life science

market

consolidation

Sluggish Western

European economy

Funding uncertainty in Western Europe and US

(Research grants from NIH, ERC, and vendors)

Price pressure due to

increasing competition

Hospital/laboratory

consolidation resulting in

cuts for new equipment

purchase


11 NC76-52

New Market Opportunities

Unmet Needs

• Standardize testing practices

• Decrease number of pathologists year on year

Company Current Strategy

Roche • Focuses on lean and six sigma across laboratories aiming to provide shortest

turn around time for tests

• Innovates value-based pricing strategy to combat in price sensitive environment

• Increases local production capacity and increased access through Emerging

Market strategies in Brazil, China, Mexico, Russia, South Korea, Turkey, and

India such as working with local governments and partners

• Attracts new top talent and retain talent in emerging markets

Leica • Utilizes broadest range of instruments and consumables for histopathology with

solutions designed to maximize workflow efficiency

• Leverages global market access by strong position in sample preparation,

digital pathology and microscopy markets

• Invests for growth in India, Brazil, the Middle East, Turkey

• Focus on digital marketing: eSales through Leica Direct

• Provides consultancy services to effectively manage workflows

Total Tissue Diagnostics Market: New Market Opportunities, Global, 2012


12 NC76-52

New Market Opportunities (continued)

Unmet Needs

• Create more real-time monitoring technologies for biomarkers

Company Current Strategy

Thermo Fisher • Offers attractive payment schemes to combat customer budget crunching

• Strengthens presence in selected geographies (e.g., R&D center in Shanghai

and focused expansion in China)

• Increases focus on R&D budgets to aim for innovative products

Dako (Agilent) • Focuses (early) in Brazil and China recording highest growth performance

• Leverages know how in pharma diagnostic partnerships to competitively

position products

• Strategizes strong positioning in Scandinavian countries that offer very good

economies for growth in tissue diagnostics sector

• Launches new product s (e.g., new fast Dako IQISH technology enabling

laboratories to identify gene status with great speed and accuracy)

• Forges strong reagent partnerships and distributor networks fostering growth

for antibodies sold in bulk forms to OEMs

• Pursues partnership opportunities within personalized medicine and other

companies having complementary technologies

Total Tissue Diagnostics Market: New Market Opportunities, Global, 2012


13 NC76-52

For More Information

Jennifer Carson Corporate Communications

(+1) 210.247.2450

[email protected]

mailto:****@frost.com

mailto:****@frost.com

14 NC77-52

Table of Contents

Section Slide Numbers

Executive Summary 13

• Key Findings 14

• Scope & Segmentation 16

• Key Questions This Study will Answer 17

• Market Engineering Measurements 18

• CEO’s Perspective 19

• Key Companies to Watch 20

• 3 Big Predictions 21

Market Overview 22

• Market Background 23

• Market Segmentation 26

• Global Market Perspective 27

• Defining Healthcare Trends in Future 28

Competitive Playbook 30

• New Market Opportunities 31

15 NC77-52

Contents (continued)


• Merger, Acquisition, and Partnership Assessment 35

Forecasts and Trends—Total Tissue Diagnostics Market 39

• Market Engineering Measurements 40

• Forecast Assumptions and Definitions 41

• Total Global Revenue Forecasts 43

• Global Revenue Forecasts by Segment 44

• Percent Revenue Forecast by Region 45

• Global Revenue Forecast by Region 46

• Revenue Forecast Discussion 47

• Procurement Process 50

Competitive Environment 51

• Competitive Environment 52

• Product Analysis 53

• Top Competitors 55

16 NC77-52



US Breakdown 60

• Market Analysis 61

• Key Findings 62

• PEST Analysis 63

• Drivers and Restraints 64

o Drivers and Restraints 65

o Market Impact of Top Trends 67

• Forecasts and Trends 68

o Market Engineering Measurements 69

o Revenue Forecasts 70

o Market Share by Tier 72

o Companion Diagnostics Partnerships 76

o Pricing Analysis 77

o Changes to Pathology CPT Codes 79

17 NC77-52



o Key Tissue Diagnostics Service Providers 81

• US Pre-analytical Segment 82

o Revenue Forecast 83

o Revenue Forecast Discussion 84

• US Advance Stains Segment 85

o Revenue Forecast 86

o Revenue Forecast Discussion 87

Western European Breakdown 88


• Key Findings 90


• Drivers and Restraints 93

o Drivers and Restraints 94

o Market Impact of Top Trends 96

18 NC77-52





o Revenue Forecasts 99

o Revenue Forecasts by Segment Type 100


o Key Tissue Diagnostics Service Providers 108

Western European Regional Analysis Introduction 111

• Tissue Diagnostics Market Outlook in Western Europe 112

• Regional Analysis–Percentage 113

Germany 114

• Overview 115

• Revenue Forecasts and Discussion 116

19 NC77-52



France 119

• Overview 120


UK 123

• Overview 124


Italy 128

• Overview 129


Spain 132

• Overview 133


20 NC77-52



Benelux 138

• Overview 139


Scandinavia 143

• Overview 144


APAC and ROW Breakdown 148


• Key Findings 150




o Revenue Forecast by Segment 154

21 NC77-52



o Revenue Forecasts Discussion 156


o Country Trends (China, India, Brazil) 161

Key Companies to Watch 168

• ACD 169

• BioMarker 170

• HistoRx 171

The Last Word 172

• The Last Word 173

• The Last Word Discussion 174

• Legal Disclaimer 178

Appendix 179

• List of Other Companies 180

22 NC77-52



• Table of Pricing Data 181

• Table of CPT Code Descriptions 187

• US—Drivers Explained 189

• US—Restraints Explained 193

• Western Europe—Drivers Explained 197

• Western Europe—Restraints Explained 201

• Associated Multimedia 207

• Decision Support Database 208

• Market Engineering Methodology 218

• Learn More—Next Steps 219

analysis of the global tissue diagnostics market

Health & Medicine