The latest LSX Investor Perception Survey offers an interesting snapshot into current thinking amongst the life-sciences investment community. While some things remain steadfast in the market (a reassuring appreciation for the value of intellectual property (IP) when choosing an investment, for instance), elsewhere we see the impact of technological disruption.
As noted by one investor quoted in the report: “the healthcare market is one of the last markets to be disrupted by technology.”
So, what does this disruption look like in this market and how are investors responding?
Asked which technologies will have the biggest impact on the healthcare market, respondents gave a range of responses. As in other industries, virtual and augmented reality are yet to see significant up-take in the healthcare sector. None of the investors surveyed see VR/AR having a substantial impact on the market, despite some pioneering companies applying this technology to challenges ranging from drug discovery to medical training.
Other technologies such as block-chain and 3D printing have a little more support. 3D printing has immense potential when it comes to allowing for the distributed manufacture of medical devices and components for example. The technology also has more far-fetched applications with researchers having recently 3D printed cartilage in space for example – as discussed by a colleague here. Blockchain too has enormous potential, especially in disrupting markets for counterfeit medicines and medical devices.
The AI revolution
Interest in blockchain and 3D printing however is dwarfed by interest in artificial intelligence and machine learning. 68% of respondents foresee AI having the most impact on the market. Alongside this, a further 20% (up from 9% last year) of respondents see investments in healthcare IT as likely to perform the best over 2019, second only to biotech investments (59%).
So, why is the industry so excited about digital disruption and what intellectual property challenges will this disruption bring?
Artificial intelligence (AI) is pushing the boundaries of possibility in many industries, and healthcare is no exception. Data-driven platforms could be used to help predict how patients will react to certain therapies for example or even which patients are likely to become ill. AI and deep learning are also helping companies develop bespoke medicines and stimulate drug development.
It is reassuring to see therefore that respondents recognise the value of this innovation and the necessity of protecting it, with 81% rating IP as being important to their company. AI will present investors and innovators in this space with particular IP challenges however – challenges which may be familiar to many digital businesses but which will be novel to the healthcare sector.
While software is often patentable, some is excluded, and early advice on patenting is strongly advised so that the strongest and most appropriate protection can be obtained. There may also be pitfalls in patenting AI-related healthcare innovations of which many are unaware.
For example, if the invention relates to personalised medicine, it is important to ensure that the claims are not too narrow, e.g. covering individual treatments rather than an entire concept or invention. As momentum builds in the field of personalised healthcare, careful patent drafting will be key. Another burgeoning area of innovation is the world of healthcare apps. Similarly, protecting the technology underpinning a successful app can be difficult and early IP advice is key to maximising the likelihood of obtaining strong protection.
There are no simple answers to the challenge of patenting AI and the law is evolving as it attempts to keep pace with technological change. The European Patent Office (EPO) recently issued updated guidance on the patentability of AI and this will no doubt create greater clarity for innovators in this field.
Given the rapid speed of digital change, it is more important than ever to have a strategy in place to protect intellectual property. IP advice from patent attorneys with specialist knowledge of AI will be as important to the future of this industry as that from attorneys with backgrounds in chemistry and molecular biology.
You can download the LSX Investor Perception Survey 2019 here