The Future of Focused Ultrasound — Collaboration, Commercialization, and Competition Will Drive the Field Forward
By Neal F. Kassell, MD
Founder and Chairman — Focused Ultrasound Foundation
In the foreseeable future, our shared vision is that the lives of millions of people around the world will be improved, and the cost of their care will be reduced, as a result of a revolution in therapy created by focused ultrasound — a noninvasive, game-changing, highly disruptive technology that is an alternative or supplement to traditional surgery, radiation, drug therapy, and immunotherapy.
Scale of Focused Ultrasound Technology
The revolution in therapy created by focused ultrasound will be of the same magnitude as the revolution in diagnosis created by magnetic resonance (MR) imaging, in terms of impact on health and wellness. And, like MR scanning, it will result in a multibillion-dollar industry.
For comparison, the da Vinci robot, sold by Intuitive Surgical, is an evolution in surgery. Focused ultrasound is a revolution in surgery, radiation, drug delivery, immunotherapy, and more. While the da Vinci has one mechanism of action — mechanical disruption of tissue — focused ultrasound currently has 19 mechanisms of action, which include tissue ablation, drug delivery, immunomodulation, neuromodulation, and others. The da Vinci is applied in roughly 10 clinical indications; today focused ultrasound is in various stages of research and development and commercialization for more than 130 clinical indications — and counting — with 25 regulatory approvals worldwide, including six by the FDA in the US.
The cost of the da Vinci robot and focused ultrasound devices is roughly equivalent. This is important to note because currently, surgical robotics is the darling of the investment community. Intuitive Surgical, for example, has a revenue of approximately $4 billion and a market cap exceeding $60 billion; and Auris Health, Inc. — designer of the Monarch platform with a revenue of approximately $10 million — recently sold to Johnson & Johnson for $3.4 billion, with up to an additional $2.35 billion in milestone payments. To be sure, focused ultrasound is the next big thing and, in terms of economics, should be like robotic surgery on steroids.
Focused Ultrasound Industry: Current and Future Landscape
In our crystal ball, we see focused ultrasound in several years as a thriving industry with four to eight dominant manufacturers and a number of smaller niche players. There will be 10,000 treatment facilities around the world utilizing multipurpose focused ultrasound devices in therapy suites, and smaller single-purpose devices in clinics and doctors’ offices for indications such as prostate cancer, uterine fibroids, and others. The cost and complexity of the devices will be markedly reduced, allowing democratization of the technology and global deployment in developing countries.
The majority of clinical indications treated with focused ultrasound will include neurological disorders and cancer (both benign and malignant tumors). Primary mechanisms of action will be tissue ablation, drug delivery including blood-brain barrier opening, immunomodulation, and neuromodulation. The inertia of physicians to adopt new technology will be overcome, and the turf battles between the various medical specialties will be settled. Physicians from a variety of disciplines will be trained on focused ultrasound and credentialed.
Revolution in Care: Adoption and Commercial Success
Creating a revolution in therapy requires worldwide adoption of focused ultrasound as a mainstream standard of care. This revolution is a result of a process that starts with invention of the technology, enhanced by innovation, followed by development, then distribution, and ultimately adoption as a mainstream therapy. This process is driven by the virtuous cycle of discovery, development and distribution. Current activity in the field is centered on the development and distribution stages, with focused ultrasound provided in approximately 650 clinical treatment sites out of a potential 10,000.
The adoption or diffusion of any new therapeutic technology — such as focused ultrasound occurs exponentially. We are now at the inflection point of the adoption curve. In 2017, approximately 100,000 patients were treated with focused ultrasound around the world. Even more were treated in 2018. The expectation is that by 2035, close to one million patients will be treated with focused ultrasound each year.
Most importantly, the field is transitioning from primarily a research and development activity to clinical care and commercial success. Indicators that validate this transition are that in the last year or so a major iconic industrial organization — Koch Disruptive Technologies — made a very large investment in a focused ultrasound manufacturer; two highly important strategic investors — Varian Medical Systems and Johnson & Johnson Innovation, who had been waiting on the sidelines — made investments in the field; and the first ever institutional investor/analyst conference for focused ultrasound was held.
Emerging Field: Biological Effects of Physical Energy
Additionally, there is a new force developing that will facilitate growth and investment in focused ultrasound: an increasing interest in the emerging field of the biological effects of physical energy — including light, magnetism, electrical current, radiofrequency, ionizing radiation, heat and cold, and sound. While historically most investment in therapy has been directed at drug development, there is now a gradual paradigm shift to treating cells with energy instead of chemicals — and 50 years from now we will look back at most drug therapy like we currently look back at bloodletting. Focused ultrasound technology is a prime example of the biological effects of physical energy and will benefit by being on the leading edge as this field accelerates.
Looking Ahead: Evolution of Focused Ultrasound Industry
The focused ultrasound industry is developing in three phases. Currently, we are in the growth phase. Right now there are more than 50 manufacturers of focused ultrasound devices; 10 years ago there were just five. We anticipate this number will grow in the next several years to perhaps 60 or 70; their revenue will grow, and some will become profitable and successful. Today all of the focused ultrasound companies are small, with most having revenue of less than $40 million per year. Few if any are profitable, with many in need of financing.
In the next three to five years, we will then enter the consolidation phase, where the number of companies will be reduced to between four and eight major players, with a small number of niche players. This is reminiscent of the magnetic resonance industry, where 35 years ago there were a plethora of small companies, and ultimately there was a consolidation into “the big three” and a number of smaller organizations.
Lastly, perhaps five to 10 years from now, we will enter the leapfrog phase, where one or more of the companies will adopt new imaging and focused ultrasound-energy-delivering technologies that will decrease the cost and complexity of the devices by an order of magnitude.
Given the potential impact of focused ultrasound on millions of patients there is tremendous urgency to make the technology widely available in the shortest time possible. Every month that goes by where focused ultrasound is not a mainstream therapy translates into unnecessary death, disability, and suffering for countless people. At the Focused Ultrasound Foundation, “saving time, saving lives” is our goal.
Barriers and Opportunities
There are a number of barriers to widespread adoption of focused ultrasound that we must overcome, in particular the need for rigorous scientific evidence of long-term, durable safety and efficacy, as well as a reduction in the cost of treatment. These data will convince all stakeholders — including patients, physicians, institutions purchasing the equipment, regulatory authorities, and most importantly the payers — of the benefits of focused ultrasound. Essential to developing this evidence are clinical trials that are designed to satisfy the needs for reimbursement from government and private insurance. Along these lines, there also must be a recognition that patient registries are the key to the future for providing this evidence and will eventually supplant randomized trials.
Also, lack of awareness of the potential of focused ultrasound amongst all the stakeholders must be overcome. Focused ultrasound has been called “medicine’s best kept secret,” and much progress is being made to change this.
Funding for research that provides proof statements of the effectiveness of focused ultrasound is required from philanthropic, government, and capital markets. Investment from venture capital and private equity is required not only to develop the product but also to create the marketing, sales, support, and distribution channel. This year for example, if all of the manufacturers seeking financing had their appetite fulfilled, it would take approximately $350 million, and the consolidation phase could consume between $1 and 2 billion.
The companies must appreciate that commercial success depends not only on investment in the creation of the product, but also the channel for marketing, sales, support, and distribution. Lessons from other medical device industries suggest that for every dollar invested in technology development, another dollar must be invested in developing this commercial channel.
The Role of Collaboration
Beyond financial capital, additional human capital must be available including scientists, clinicians, and business people. One approach for rapidly scaling human capital is through collaboration, because collaboration is the ultimate force multiplier for intellectual capital. Collaboration is also essential to rapidly achieve a critical mass of knowledge and results by sharing experiences, information and ideas; coordinating activities; and avoiding duplication of effort. Furthermore, collaboration is a powerful stimulus for innovation.
Collaboration is not an end unto itself but an element in a value chain that starts with communication, then coordination, then cooperation, then collaboration, and, ultimately, competition. With regard to the final item in the value chain, nothing would benefit the focused ultrasound field more than healthy competition.
Conclusion: Our Shared Goal
It has been said that the highest purpose or calling that an individual can have is to help other people. The focused ultrasound community is populated by individuals who passionately embrace this philosophy and are rewarded by sharing the once-in-a-lifetime privilege of potentially improving the lives of millions of people around the world.
The best way to predict the future is to invent it. The hard work, risk-taking, and innovation of the entire focused ultrasound community will make this happen.