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Recently, according to foreign media reports, Philips Medical is acquiring DiA Imaging Analysis, an Israeli ultrasound image analysis company. The company is an ultrasound imaging analysis company with AI as the core technology, and the company's core product is an ultrasound imaging analysis software driven by artificial intelligence.
Capital Point (TASE:CPTP), DiA's largest shareholder, informed the Tel Aviv Stock Exchange (TASE) that its portfolio company, DiA Imaging Analysis, has been acquired by a world-renowned medical device company, and although the name of the company is not mentioned in the notice, the source told Device Home that the world-renowned medical device is Philips.
01
Why DiA led to acquisitions
Company Profile
DiA Imaging Analysis is a leading provider of AI-enabled ultrasound analysis solutions that focus on the ultrasound of the heart to deliver automatic, accurate interpretation of important cardiac indicators. The technical foundation is advanced pattern recognition and artificial intelligence machine learning algorithms. Its solution is optimized for small and handheld ultrasound scanners, using proprietary machine learning algorithms to solve the problem that the position of ultrasound affects image quality during surgery, and doctors have many differences in the use of ultrasound behavior, and analyzes scans and detects current patterns in real time, mimicking the human eye to recognize boundaries and movement patterns.
DiA has received nine FDA approvals, the most recent of which was in February 2023. This software can guide the average person without professional training where to place an ultrasound probe for the most accurate ultrasound analysis. This technology will help patients quickly locate their injuries in emergency situations. According to foreign media reports, this FDA approval may be the biggest factor in the Philips acquisition.
DiA's AI advantage
Ultrasound analysis is often estimated visually or manually, which is subjective and time-consuming, requiring extensive training and long learning sessions to accurately judge patients based on ultrasound images. With the help of automated AI ultrasound solutions, DiA can effectively fill the growing demand for objective and accurate analysis in the market.
In addition, AI plays a role in remote ultrasound, obtaining ultrasound in geographic areas where healthcare personnel are undertrained in ultrasound, integrating with PACS, securely transmitting images to the cloud, and acting as a screening tool to determine if more tests are needed for a particular patient.
In the past 20 years, the field of ultrasound has undergone a revolution, and the miniaturization of ultrasound hardware can be used anytime, anywhere, and its functions are becoming more and more sophisticated and convenient. The AI ultrasound analysis technology in the popular circle is another revolution in the field of ultrasound, which is expected to make ultrasound imaging more portable and user experience more intelligent. In a recent survey, 85 percent of ultrasound users said AI saved operating time and 69 percent said it saved costs.
DiA's new technology will help sonographers more accurately determine patient status, and AI will help physicians determine patient status and improve patient survival when doctors use portable ultrasound devices.
Years of cooperation Final acquisition
Since February 2021, Philips and DiA announced a strategic partnership and acquired a minority stake in DiA.
The combination of Philips and DiA provides automation solutions for clinicians in healthcare settings. Philips' industry-leading ultrasound image quality, combined with DiA's AI library of automation solutions, will help improve diagnostic confidence, operational efficiency, and provide care to point-of-care customers inside and outside the hospital.
Philips has built a suite of intelligence and automation enhancements with the help of DiA that are integrated into the radiology workflow of its portfolio for the benefit of both customers and patients. By facilitating the development and integration of AI applications, Philips aims to achieve better patient outcomes, improve patient and staff experiences, and reduce the cost of care. Integrating AI applications into ultrasound technology can also improve the patient experience.
Philips benefits from working with DiA, whose AI-based ultrasound image analysis technology can be integrated into Philips ultrasound equipment to help clinicians determine patient conditions. This is a great improvement for Philips' ultrasound imaging equipment, making Philips' ultrasound equipment more competitive in the market. In the end, Philips decided to acquire DiA to further enhance the imaging quality and treatment efficiency of the device.
02
Collaborate with numerous companies in the industry
GE Health
In December 2017, GE Healthcare (General Electric), a subsidiary of GE, announced a partnership with DiA Imaging Analysis to import and integrate automatic image analysis technology into GE Healthcare's ultrasound equipment, and signed a non-exclusive licensing and professional services agreement.
DiA has developed an automated imaging analysis software that has been adopted in so-called "point-of-care" services to provide real-time and accurate ultrasound image analysis, enabling medical professionals in intensive care units (ICUs), emergency rooms, and even ambulances to quickly obtain ultrasound diagnosis results using small or handheld ultrasound devices. DiA said the software uses advanced pattern recognition and machine learning algorithms to create fully automated tools that mimic the human eye to recognize image boundaries and how they move, resulting in fast, accurate and automated diagnostic data.
Open medical treatment
In December 2020, AI-enabled ultrasound diagnosis Intel joined hands to open a medical to create a smart color ultrasound system. In May 2021, DiA Imaging Analysis Ltd., a leading provider of AI-enabled ultrasound analysis solutions, entered into a partnership with Kai Kai, which will provide DiA's ultrasound AI analysis solutions to reduce the variability associated with manual or visual analysis and improve the efficiency and accuracy of the entire analysis process.
IBM Watson Health
In February 2019, IBM Watson Health announced a partnership with DiA Imaging Analysis, and with the launch of the IBM Imaging AI Marketplace, IBM will launch DiA's LVivo EF solution, one of several cardiology and general imaging AI solutions developed by the company. DiA's LVivo EF application provides clinicians with an AI-based quantitative solution that will provide automated clinical data such as ejection fraction (EF) and global longitudinal strain (GLS). The company expects to add other solutions to the market in the near future.
In addition to the above companies, DiA has a partnership agreement with Google Cloud, saying that "its analytics tools can be accessed and used from anywhere." Reference sites have been established at Yale University, Mount Sinai University, Rush University Medical Center, University of South Florida, and UC San Diego medical centers.
03
The field of AI ultrasound has a broad market
The ultrasound market is growing significantly
The Diagnostic Imaging Ultrasound Devices segment had the largest revenue share of over 72.0% in 2021, mainly due to its wide application in obstetrics, cardiology, and oncology. In addition, the increasing prevalence of lifestyle-related diseases and the continued advancement of technology are also driving the demand for diagnostic ultrasound devices. The therapeutic ultrasound devices segment is expected to grow the fastest CAGR at 5.1%. This segment can be further segmented into high-intensity focused ultrasound and extracorporeal shock wave lithotripsy, with the high-intensity focused ultrasound segment having the largest revenue share in 2021 and is expected to grow rapidly during the forecast period due to its high effectiveness in treating cancer and other related diseases.
According to GrandView Research, the global ultrasound equipment market reached $79 billion in size in 2021 and is expected to grow at a CAGR of 4.5% from 2022 to 2030.
In the global market, the North American region dominates, with a revenue share of around 30.0% in 2021. North America is expected to continue to grow at a significant rate during the forecast period. The major drivers for the growth of the market in this region are the large number of market competitors and the increasing number of cancer cases.
Moreover, the adoption rate of advanced technologies in the region is also driving the demand for ultrasound devices. For example, in October 2020, St. Luke's University Health Network partnered with GE Healthcare to install 76 ultrasound systems to build an AI-assisted technology network, GE's largest ultrasound equipment purchase in the United States.
Figure 2 Size of the Japanese ultrasound market
Domestic ultrasound market analysis
According to CIC Consulting's estimates, the market size of China's ultrasound equipment will increase from 8.67 billion yuan to 12.7 billion yuan from 2016 to 2020, with a compound annual growth rate of 10.0%, and the market size is expected to increase from 13.97 billion yuan to 18.65 billion yuan from 2021 to 2025, with a compound annual growth rate of about 7.5%.
Figure 3 Size of China's ultrasound market
The growth rate of China's ultrasound equipment market has slowed, mainly because this market has entered a mature stage and competition is very fierce. Public hospitals are already quite well equipped with ultrasound equipment, so the market growth is mainly dependent on the demand from private hospitals. However, with the introduction of the tiered diagnosis and treatment system, there is still potential for expansion of the market.
For primary hospitals, what they mainly need is low-end ultrasound equipment. Therefore, if the number of grassroots hospitals increases significantly, the market for low-end ultrasound equipment is likely to grow greatly.
In terms of market share, low-end ultrasound equipment accounts for about 35%, mid-end ultrasound equipment accounts for about 45%, and high-end ultrasound equipment accounts for 35%. In terms of price, the average selling price of low-end ultrasound equipment is 100,000 yuan, mid-range ultrasound equipment is 500,000 yuan, and high-end ultrasound equipment is 2.5 million yuan.
Ultrasound segment analysis
In the ultrasound equipment market, the general imaging segment dominates, with its revenue share exceeding 29.0% in 2021. General imaging is relatively more economical and can be used in most clinical scenarios, such as the abdomen, musculoskeletal, small parts, urology, liver, thyroid, scrotum, bladder, pancreas, kidney, spleen, and gallbladder.
Due to the gradual increase in the incidence of cardiovascular diseases worldwide, the CAGR of cardiology field is expected to exceed 5.1% in the expected years. According to the World Health Organization, cardiovascular disease is the leading cause of death worldwide, killing about 17.9 million people each year. Advances in ultrasound technology in cardiac applications, such as Philips' Affiniti CVx cardiovascular ultrasound product launched in August 2020, are expected to further expand the market. The system is designed to provide better cardiology care and improve care efficiency and processing capacity.
In the ultrasound equipment market, the hospital segment dominates, with a revenue share of more than 39.0% in 2021, and is expected to maintain this leading position through 2030. The growth of this segment is mainly attributed to the widespread use of ultrasound devices in hospital settings and the increasing number of patients visiting patients for lifestyle-related diseases. Moreover, the introduction of portable ultrasound systems is expected to further drive the demand for ultrasound devices in outpatient and inpatient sectors.
The global diagnostic ultrasound equipment market is expected to be driven by the increasing demand for improved diagnostic devices such as miniaturized 2D and 3D/4D devices. The market can be further segmented into 2D, 3D/4D, and Doppler ultrasound devices.
Figure 4 Global ultrasound equipment market
The ultrasound equipment segment accounted for the largest sales share of the ultrasound market in 2021, with over 69.0%. By transporting the device to the patient's location, whether it is an intensive care unit (ICU) or emergency room, cart ultrasound completely avoids the problem of transferring critically ill patients. In addition, it facilitates rapid diagnosis, treatment decision-making, and management, all of which contribute to improved patient recovery and satisfaction.
The handheld ultrasound device segment is expected to witness the fastest growth rate during the forecast period. Due to the growing trend of home healthcare and remote patient monitoring, handheld devices are in high demand. During the COVID-19 pandemic, handheld ultrasound devices have proven effective in monitoring critically ill patients.
The demand for handheld ultrasound devices has been accelerating since the Covid19 pandemic. Technological advancements are expected to further augment the market size. For example, in April 2020, Mindray, a major global provider of medical devices and solutions, launched the ME Series, a new portable ultrasound system designed to improve the clinical experience of diagnosis and treatment of critically ill COVID-19 patients.
With the rapid development of science and technology, especially driven by artificial intelligence and big data technology, ultrasound imaging technology has been continuously optimized and innovated, making its application in many fields such as medical diagnosis, treatment and disease monitoring increasingly extensive. In addition, the global aging trend is obvious, the health needs of the population are growing, and the demand for medical equipment, especially non-invasive or minimally invasive diagnostic equipment, is also rising, which undoubtedly provides great potential for the development of the ultrasound imaging market. In addition, the medical and health industry in developing countries is also increasing, and the demand for high-quality ultrasound imaging equipment is increasing year by year. At the same time, policy support and active investment of investors are also promoting the further development of the ultrasound imaging market. Therefore, whether from the perspective of technological progress, market demand, policy environment or investment attitude, the international ultrasound imaging market has broad room for growth.
04
Acquisition of DiA
Powering Philips ultrasound equipment
Philips' acquisition of DiA will help Philips improve the capabilities of its ultrasound equipment, enabling it to provide not only high-quality ultrasound images, but also more accurate image analysis results. This will increase the competitiveness of its products. Philips can leverage DiA's AI technology to provide more comprehensive and accurate medical care. For example, it can integrate this technology into its devices to provide doctors with more accurate diagnostic recommendations, helping doctors track the progress of the disease more effectively.
Philips has a total of 4 product lines in the field of ultrasound equipment. They are the HD series, the ClearVue series, the Affiniti series and the EPIQ series:
HD series
The HD series is Philips' High Definition ultrasound series designed to provide higher image quality and more accurate diagnostics. This series often includes advanced image processing technology and ergonomic design.
ClearVue series
The ClearVue ultrasound series is a cost-effective solution for Philips. The design of this series is simple, easy to use, and has good image quality. They are suitable for a variety of clinical applications, including gynecology, cardiac, and general imaging.
Affiniti series
The Affiniti ultrasound series is Philips' high-end product line designed for high-flow medical environments. These systems feature advanced imaging techniques and efficient workflows to help doctors complete diagnoses quickly and accurately. They are suitable for a variety of complex clinical applications, including cardiac, vascular and gynecological/obstetrics.
EPIQ series
EPIQ is Philips' flagship ultrasound family, offering state-of-the-art imaging technology and the highest performance. With exceptional image clarity and depth, this family of products supports the most complex and challenging clinical applications. The EPIQ series typically incorporates Philips' latest technologies and innovations, such as smart imaging technology and ultrasound-guided treatment protocols.
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With Philips' acquisition of DiA, we can expect a qualitative leap forward in the field of ultrasound image analysis. This move not only demonstrates Philips' strong commitment to technological innovation, but also opens up new possibilities for improving the accuracy and efficiency of ultrasound diagnosis. Although the application of AI in the medical field still faces ethical and technical challenges, this cross-border cooperation has undoubtedly accelerated the pace of medical technology.
Going forward, we look forward to seeing how Philips combines its expertise in ultrasound technology with its newly acquired AI capabilities to deliver a higher level of service to healthcare professionals and patients around the world." The acquisition heralds Philips' efforts to build a smarter, more personalized healthcare experience that could change the way we think about ultrasound diagnostics and become an important innovation driver in healthcare.