SPECIAL REPORT: As markets struggle under the pressure of the COVID-19 pandemic, the medtech industry has found itself with an unparalleled, if challenging, opportunity.
As markets struggle under the pressure of the COVID-19 pandemic, the medtech industry has found itself with an unparalleled, if challenging, opportunity.
Before the COVID-19 pandemic arrived in Australia, one of the more insidious claims about the virus was that it was no more harmful than seasonal influenza. Noting that disease outcomes for the coronavirus were worse in older individuals (as is the case with the flu), the claim minimised the novel nature of the virus and sought to frame it as predictable, if not entirely treatable.
It’s personal experience of the downside of that tendency to minimise the broader effects of illness that Alex Dunmow, chief executive of West Leederville-based software developer Ninja Software, says changed his thinking.
Last winter, Mr Dunmow came down with a case of the flu he says made him the sickest he had ever felt.
The company had fewer than 20 staff and it didn’t take long for almost half the office to contract the virus. According to Mr Dunmow, it left the company in disarray.
“It hit us right when we bought another company, and we were migrating customers to another platform,” Mr Dunmow told Business News.
“That month the flu hit us … honestly, it almost killed our company.”
A strong believer in staying home when sick, Mr Dunmow was so jolted by his experience that he set to work on a device that could stop viruses from spreading widely.
That led Ninja Software to develop and produce Flubar, a thermal camera technology that incorporates facial recognition and automation software to give a clear reading of whether someone is running a fever or not.
The idea, he said, was to have businesses use it at entrances to prevent sick individuals from entering an office.
Mr Dunmow said he didn’t see much potential in the idea at first, in part because he didn’t think it made much sense socially and culturally.
“People come in running a fever and they think they should come to work,” he said.
“Even if the culture is very in favour of keeping the sick out of the office, it’s ingrained in us [that we should work when sick].”
In recent weeks, however, as COVID-19 has ravaged some of the world’s best healthcare systems, Mr Dunmow said the market opportunity for this sort of technology had become enormous.
“When the pandemic went crazy and we saw people buying thermal units that are $40,000, we saw a market,” he said.
“We’ve developed a good product, and if that helps us survive the next five years and help people and other businesses keep sick people out of their offices, that’s a win on two fronts.”
Mr Dunmow’s story is one of fortuitous timing, if not good fortune.
With the pandemic now the major focus of businesses and governments across the world, technologies that can aid in the battle against the virus and assist in a return to life as normal have become highly sought after.
While that’s created unparalleled opportunities in the medtech sector, Mr Dunmow is reticent to label the situation as such.
“We’re not claiming [Flubar] would stop the spread of COVID-19,” he said.
“It might keep people out of the office who are carrying it, but we’re not going to make that claim.”
Others in the sector echo that view, saying that despite the unprecedented market prospects brought about by the pandemic, any response to it should not be viewed simply as part of a business case.
An example is Patrick D’Cruz, chief executive of Waterford-based software developer Neorise.
A 25-year veteran of the IT industry, Mr D’Cruz doesn’t specifically deal in medical technology and works across industries.
“Basically, we’re problem solvers,” Mr D’Cruz said.
“We like to help small, medium, and even large businesses to do well.
“The great thing about working in IT and technology is that it’s got this phenomenal power to make changes and improvements.”
He recounts coming across COVID-19 in December of last year, at first curious and then increasingly alarmed as the disease spread throughout Asia, Europe, and eventually Australia. While keeping pace with developments, Mr D’Cruz said he noticed the countries that had managed low caseloads – Taiwan, South Korea and Singapore – all had one thing in common.
“I remember reading that [those countries] were very vigilant about what we all now call contact tracing,” he said.
“It didn’t really have a name back then, but as soon as someone got infected they had teams of people going through tracing all their contacts over a period of 14 days.
“I remember thinking we could automate a lot of that.”
That led the company to quickly develop a prototype for UpHealth, an app that, much like the one currently touted by the federal government, can anonymously inform people whether they’ve come into contact with the virus and are required to isolate.
Such technology has become readily accepted in recent weeks as businesses and individuals have become eager to move beyond the restrictions currently needed to stop the spread of the virus.
Like Mr Dunmow, Mr D’Cruz is cautious with regard to the opportunity.
“When we started developing this we weren’t aware of anyone else developing anything like it,” he said.
“We thought the sooner we could get it out, the sooner we could start helping people. “The plan always was and still is to give [UpHealth] away for free. “I don’t know how we’re going to make any money off it; I really hadn’t thought that far ahead.”
He suggested the way in which some medtech companies were currently approaching the situation appeared tactless, if not offensive.
“I think you’ll find a lot of companies throw the name COVID-19 around, particularly public companies … they’re just trying to throw the words COVID-19 into their ASX announcements, in some way, shape or form,” Mr Leedman said.
“I think that most of them are rubbish.
“There’s no direct correlation between what they’re doing and COVID-19, they’re just trying to bring attention to themselves by throwing that [word] around.”
While medtech companies are being careful not to label the pandemic an opportunity, there is no denying it is causing the sector to fundamentally rethink its commercial fortunes.
Singular Health Group is one example. Originally planning an ASX listing in August (that has since now been moved back to November), managing director Thomas Hanly said the company has rapidly shifted its focus in recent weeks to students now learning from home.
That’s taken shape in a small-scale repackaging of the company’s software, which will allow students to interact with a built-in pathology library of cancers, lung conditions and broken bones through virtual reality while at home. While not calling the shift an opportunity as such, Mr Hanly said the pandemic had encouraged the business to rethink how its products could benefit consumers. “Prior to going into the pandemic, it was all about clinical licences or those large-scale education applications that were purchased by universities,” Mr Hanly told Business News.
“Now it’s forced us to look at individual users, students who, for the price of a textbook, can have an interactive tool to see various CT and MRI scans, annotated, and colourised, to help with their education.
“It hasn’t been a big step for us, in terms of the technical [side of the business].
“It’s about changing the mindset of how this would be used and how it would be paid for, which has been a big step.
He said while the pandemic would not fundamentally alter his business, heightened awareness of public health matters meant the sector would need to respond.
Mr Anderson said that did not mean businesses would go out of their way to profit from the hardship caused by the virus, but that they would stand to gain by reacting to and solving the larger problems caused by it.
“If we look back over the last 30 years, and in particular at global economic impacts that have resulted in recession or hard times, we have consistently seen high-quality, life-science-based products can burst out the other side successfully,” Mr Anderson said.
“Even in downtimes, we must continue to develop new and effective ways of doing things better in our healthcare system that result in more cost-effective, minimally invasive ways of doing things that we did before.
“That contributes to our cost economic base, contributes to improved healthcare, and increased productivity.
“These are essential elements in society that need to be championed and pushed forward, even in these periods.”