15 Oct 2002
Consolidation will continue as companies struggle to go it alone in the costly medical laser market.
Recent consolidation in the medical laser industry will continue for the foreseeable future. That's the view of Robert Grant from Lumenis, the Israel-based medical laser specialist.
"The industry shakeout will continue and there has to be a trend towards more consolidation," predicted Grant. Of the 30-40 companies currently in the sector, over half are not profitable, he added.
Grant, executive vice-president of the surgical and ophthalmic business unit at Lumenis, also stressed that the industry must become more focused on applications, rather than being technology-driven. On the plus side, he said that China offers the industry huge potential for growth, especially for refractive surgery.
He believes that the dominant manufacturers will increasingly build up their research and development portfolios through acquisitions. "We regard the smaller companies as individual 'bricks', which companies like Lumenis will put together and build into a 'wall'," he said.
Grant cited many reasons for the consolidatory trend. Chief among these is the high costs of clinical trials to gain regulatory approval for treatments coupled with the need for costly marketing campaigns and equipment distribution.
Grant estimates the current total market to be worth around USD 1.3 billion. Ophthalmology is the biggest application area, claiming a USD 550 million chunk of this total. This is despite a slump in the refractive surgery sector, which Grant says is temporary.
He thinks that the marriage of diagnostic and therapeutic procedures for customized corneal ablation will provide more growth for the sector. The huge Chinese population, on which refractive procedures have so far had little impact, also represents a huge opportunity, said Grant.
Grant believes that a change in approach is required to find the next big applications. "This industry has always been technology-driven, and that must change. It needs to become applications-focused," he said.
"The market is similar to other medical-device markets," said Grant, adding that there is a strong trend towards more office-based procedures and away from surgery in the operating theatre. The latter is a market shrinking by 5% annually, while non-invasive procedures are growing at 20%, he said.
On the technology side, Grant believes that the focus should be on improving delivery devices and laser pulse durations. "We have explored many wavelengths and we know which are useful - improving the pulse width is now more important than finding a new wavelength," he said.
In line with the recent development of customized refractive procedures, Grant sees a general trend towards "smarter" laser systems in medicine, where diagnostic and therapeutic features are integrated in a single package.
Michael Hatcher is technology editor of Opto and Laser Europe magazine.