Life science trends outlook

5 trends to watch

The life sciences sector is evolving rapidly, driven by technological advancements, market dynamics and the need for effective, efficient and patient-centric solutions. The post-pandemic years have been shaped by uncertainty and instability, combined with sharper regulatory requirements raising the barrier to market. As we look ahead, several key trends are poised to shape the industry’s future.

01. Regained focus on new product development in medtech

New product development is back again as a top strategic priority for medtech executives following the pandemic years of lower R&D activity and recent focus on major regulatory compliance initiatives, including MDR transition programs that have created capacity constrains. Based on our conversations with executives from medical device companies we now see an increased focus on new product development as companies realize that innovation will remain key to stay competitive. The increased activity level is clearly seen in the increased FDA approvals of medical devices in 2023, partly also explained by more companies shifting focus to US following the stricter regulatory requirements in Europe. A trend that is expected to continue.

02. AI-enabled medical devices gain clinical adoption at scale

The acceptance for AI/ML medical devices has gained momentum at scale, and international companies are racing to capitalize on the trend. The US market is on the forefront of AI/ML-enabled medical device applications with a cumulative 837 FDA approvals by the end of 2023, with US companies representing 44% of 2023’s approvals. A majority of the devices are seen in the field of radiology, followed by applications in the cardiovascular and neurological fields. 

 03. Radiopharmaceuticals on the rise                                                          

The cure of cancer? Maybe. Radiopharmaceuticals have gained lots of attention lately, given its potential as breakthrough treatment within oncology. Big-pharma expand their portfolios through transactions in the area, hoping to acquire the miracle compound. This modality has built up a real traction in the market with major recent deals, including AstraZeneca’s acquisition of Fusion in March and Novartis acquisition of Mariana Oncology announced in May 2024. Following the surge in funding and significant investments being made, we expect to see more radiopharmaceutical drug candidates reach the clinic soon.

04. Continued need to effectively manage supply chain change

Change in life science supply chains is a complex task. During recent years, we have witnessed increased uncertainty in supply chains and new conditions to manage, including; changing macroeconomics, inflation, supply shortages and geopolitical uncertainties. The rapidly changing environment is clearly exemplified by the recent change in global shipping routes as a result of the Red Sea attacks. Adding increasing regulatory demands and requirements from authorities and customers, we now see an increased proactive mindset in managing supply chains.

05. Slowdown in digital health deals but change to come?

Following the booming market in 2021, we saw a dive in deal activity in the digital health area in 2022 with a continued downhill trajectory in 2023. Half-year in 2024, there are indications of increased interest with higher deal-activity in Q1 although at lower check sizes. Creative financing measures and AI-driven investments are key trends, with 40% of Q1 funding in this area going to AI focused companies. Digital health players need to adapt and align to new paradigms including meaning focus on strong outcomes and healthy margins instead of topline growth.

The future holds significant potential for transformative growth within the sector, both for medical devices and pharmacology. The industry’s adaptability in the face of uncertainty has underscored the importance of robustness and innovation. Looking ahead, we can anticipate a landscape shaped by continued advancements in precision medicine, the integration of artificial intelligence and a stronger emphasis on robust value chains. As stakeholders across the sector embrace these opportunities, the next few years promise to be a period of remarkable progress and discovery, paving the way for a more resilient and innovative life sciences ecosystem.