HONG KONG (Reuters Breakingviews) - Forget autonomous driving: The latest digital buzzword is medtech. Investors at last week’s annual RISE technology conference in Hong Kong talked up a coming healthcare artificial-intelligence revolution, and the hype is as palpable in Silicon Valley. Chinese firms are well positioned to take the lead.
U.S. venture capital funds poured over $12 billion into local biotech, pharmaceutical, and medical-device upstarts in the first half of this year, according to data from Pitchbook, on track to surpass last year’s record of $17 billion. China isn’t far behind. Investments in the country’s life sciences sector doubled to $12 billion last year, according to ChinaBio Consulting, and accelerated to more than $5 billion in the first quarter of 2018, led by prolific backers like Qiming Ventures and Sequoia Capital China.
Biometric and genome data - everything from blood pressure readings to tissue samples and DNA - are transforming the industry, from the way pharmaceutical firms discover drugs to how doctors diagnose patients. The hunt is on for better, and cheaper, treatments.
The United States accounts for almost half the roughly $7 trillion of annual healthcare spending worldwide, according to Deloitte. But medical expenditures in the People’s Republic will top $1 trillion by 2020, analysts at Bernstein reckon.They estimate healthcare-related technology could account for $150 billion of that.
Beijing has made exploiting Big Data in healthcare a national priority in ways the United States arguably cannot match. The country is building massive regional data centres to house medical records, birth and death registries, insurance claims and other information. Most ambitious, though, is China’s push into precision medicine - tailoring treatments based on a person’s genetic profile. In 2016, The government earmarked $9 billion over 15 years to sequence and analyse genomes. That dwarfs the $215 million precision-medicine initiative launched in the U.S. the same year.
China’s population of 1.4 billion - and a government willing and able to encourage the sharing of data - gives healthcare AI companies there an advantage. Even for algorithms developed in Silicon Valley, the most fruitful applications may be across the Pacific Ocean. Future giants are waiting in the wings: Shenzhen’s $6 billion BGI Genomics is already the world’s top sequencer, while biotech upstarts like the Fidelity-backed Innovent Biologics are gearing up for Hong Kong listings. Really Big Data may be what gives China the edge.
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