Ivo Višić, Senior Investment Office, CIO Office Europe and Matt Barry, Investment Strategist, Americas
Mar. 26, 2019

Digitalization is driving massive change in the medical device sector which is still considered to be the main route to investing into medical technology (medtech). At the same time demographics put increasing strain on healthcare provision. The hope is that technology will allow cost-efficient delivery of high-quality, client-centred care to aging populations around the world.

 

Executive summary

 

Medical technology (medtech) is mainly investable in via the medical devices sector which has global revenues of around USD370bn per year which corresponds to ~5% of the total health care market worth USD7tr.

 

The U.S. is currently both the biggest market for medical devices (43%) and the domicile of the majority of the sector’s big players, but demographics are helping to boost the importance of emerging markets.

 

At the same time, digitalization is encouraging a shift in the industry’s focus, with individual devices complemented by a more holistic approach to care.

 

This is likely to attract tech firms and other digital entrants: existing firms in the sector may need to collaborate to access a range of skills.

 

At present, U.S. medical device firms’ current focus seems however to be on short-term growth, with medtech-related M&A currently at low levels.

 

These trends could benefit some firms in the medium term but may also create some risks, given strong valuations and marked outperformance relative to the broader market over the past two years.

 

Over the longer term, however, we see significant opportunities as the changes wrought by digitalization and demographics encourage growth and the provision of new high-quality services.

 

To download a PDF of the full report, please click here.

 

In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk. CIO Office, Deutsche Bank Wealth Management, Deutsche Bank AG - Email: WM.CIO-Office@db.com.

You may also be interested in

Inflation: drivers and implications

Our new CIO Special looks at the important issue of inflation, brought into focus again by the economic impact of the coronavirus pandemic.

  • Jun. 16, 2020

UK economy: a perfect storm

In our new CIO Special, we look at how COVID-19 has hit the UK economy, exacerbating previous weaknesses.

  • Jun. 08, 2020

China: recovery adds to investor appeal

In this new CIO Special we identify China’s economic recovery and the investment opportunities post COVID-19.

  • Jun. 03, 2020


The content and materials on this website may be considered Marketing Material. The market price of an investment can fall as well as rise and you might not get back the amount originally invested.  The products, services, information and/or materials contained within these web pages may not be available for residents of certain jurisdictions. Please consider the sales restrictions relating to the products or services in question for further information. Deutsche Bank does not give tax or legal advice; prospective investors should seek advice from their own tax advisers and/or lawyers before entering into any investment.