Article
Segmentation and growth factors of the global neuroscience market
Sizing the brain
Brain disorders are the leading cause of disability worldwide, and a primary cause of deaths second only to cardiovascular diseases. Despite recent advancements, early diagnosis of brain disorders remains a challenge and often treatments can only delay disease progression (disease management) without recovering lost function (disease repair). The life sciences industry therefore strives to raise the standards of care by developing new diagnostic solutions and treatments for brain disorders. However, further investments are required to overcome the limitations of current therapies and meet the needs of millions of patients worldwide.
To facilitate the attraction of new capital by informing investment decisions, Deloitte broke down the Global Neuroscience Market (GNM) across segments and geographies. Our report provides a comprehensive analysis of available diagnostic and treatment options —as a proxy for market size— to estimate the revenue-based valuation of the GNM until 2026. Our analysis indicates the GNM was worth $612 billion in 2022 and is forecasted to grow to $721 billion by 2026, returning an aggregate compound annual growth rate of 4.2 percent across segments (dispersion from 3.5% for behavioural therapy services to 27.8% for digital health).
We also carried out a segment-specific correlation analysis which identifies an inverse relationship between current revenue levels and future growth rate, and suggests that market adoption across segments will evolve different depending on geographical location. In summary, Deloitte developed a holistic framework to help guide investment decisions across neuroscience segments, predict return on investment based on growth rates, and select target geographies based on regional trends.
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Overview of the market place:
The neuroscience market features companies spread across several segments. Each segment aims to tackle different barriers that are inherent to the field of brain disorders:
- Nascent stage of early diagnostics: The limited availability of early diagnostic tools generates a situation where clinically observable symptoms often only appear once the molecular signatures of the disease are at an advanced stage. This diminishes the efficacy of available treatments in reverting the course of the disease (that is, repairing the brain).
- Limited understanding of the biological basis of brain disorders: These disorders affect an organ characterised by ‘emergent properties’, which are properties that cannot be explained by the addition of functionalities shown by individual building blocks (for example, higher cognitive functions or consciousness). This adds a layer of complexity that is not present in other therapeutic areas.
- Traditional pharmacological treatments are not enough to address brain disorders: If we conceive of the brain as an experience-dependent organ shaped by behaviour, we ultimately need to emphasise the importance of interventions beyond pills.
Deloitte segmented the global neuroscience market to cover both traditional and novel solutions aiming to overcome the abovementioned limitations:
- Diagnostic solutions accommodate the value of technologies facilitating the early diagnosis of brain disorders.
- Drug therapies include conventional pharmacological methods and refined therapies targeting newly discovered molecular targets.
- Non-drug therapies account for the importance of behavioural interventions in treating brain disorders.
Diagnostic solutions were subdivided into two segments:
- Molecular diagnostics are precision tests designed to detect biological markers at the genomic, transcriptomic, or proteomic level to accurately diagnose brain disorders.
- Non-molecular diagnostics are techniques to detect the presence of brain alterations based on electrophysiological (for example, EEG) or structural data (CT, MRI etc.).
Drug therapies were subdivided according to the nature of the disease they are intended to treat:
- Neurological conditions—those triggering cognitive and motor dysfunction from damaged neurons and nerves (for example, Alzheimer’s disease, Parkinson’s disease and multiple sclerosis).
- Neuropsychiatric conditions—those characterised by disturbed behavioural and emotional states (for example, anxiety, depression, addiction). The concepts of mental health and mental illness are often applied to neuropsychiatric conditions, although mental illness may also appear as a comorbidity in neurological disorders.
Non-drug therapies were subdivided into behavioural therapy services and digital health:
- Behavioural therapy services are a range of psychotherapies delivered across the entire continuum of care—from hospital settings to home—to address mental health issues.
- Digital health encompasses software-based technologies and platforms designed for the prevention, monitoring, management, or treatment of brain disorders.
The impact on Switzerland:
As a hotbed of innovation, Switzerland is in a privileged position to develop new solutions for the life sciences industry. This is no exception in the field of neuroscience, where multiple start-ups have been founded locally across the entire segment spectrum including drug therapies, digital health solutions and diagnostics. Some of the most consolidated pharmaceutical companies are based in Switzerland, and both their pipelines and their commercial footprint showcase pharmaceutical compounds targeting brain disorders.
How Deloitte can help:
If you operate in the neuroscience space, whether you are an early-stage company looking for fundraising or exit strategies for a promising lead, a venture capital / private equity firm weighing new investment opportunities, or a consolidated company with global footprint considering acquiring a new business and expand your in-house capabilities through acquisitions or partnerships, Deloitte can help you.
Deloitte Switzerland’s Corporate Finance Advisory team for Life Sciences and Health Care consists of specialists with extensive experience in sell-side advisory on company spin-offs, buy-side advisory on the acquisition or expansion of companies, as well as capital raising strategies. The team members have excellent connections within the Swiss economy, including life sciences start-ups and pharmaceutical companies, and specialists of the Deloitte's global network. Contact the authors to discuss tailor-made M&A or financing solutions in the context of mergers, acquisitions and divestitures, and debt or equity projects for the life sciences and health care industries.
Contact our experts
Álvaro Nuno Perez
Senior Consultant
Álvaro Nuno Perez holds a PhD in neuroscience from the University of Lausanne, where he published several articles in top-tier neuroscience journals by studying the behavioural implications of brain adaptations following stress exposure. After completing his doctoral thesis, Álvaro transitioned to consulting services with the aim to bridge science and finance in the context of M&A transactions
Jose Suarez
Senior Manager, Risk Advisory
Jose Suarez has a background in biotechnology and nearly ten years of research and consulting experience. Jose’s career spans the complete pharmaceutical value chain, from direct experience in R&D to consulting work in market access, commercial, customer and regulatory topics for pharmaceutical, medtech and biotech industries.
Michel Le Bars
Partner
Michel is a partner for M&A at Deloitte, leading the Life Sciences and Health Care corporate finance / lead advisory practice. Michel has more than 15 years of experience in the pharmaceutical and consumer care industries. He has been leading strategy initiatives and M&A mandates including acquisition and divestiture of businesses, rationalization of product portfolios and manufacturing footprints for Swiss and global companies in Europe, the US and emerging markets. Clients value Michel and his team’s industry expertise, its broad network, cross-border transaction experience and its proven agility to address complex issues of the industry regulatory frameworks.
Doug McKinnell
Partner, Risk Advisory
Based in Basel, Doug leads Deloitte’s life sciences regulatory risk team in Switzerland. His extensive experience spans over more than 15 years of working with European medicines regulators and leading large scale and complex risk management programmes for global pharmaceutical clients. Doug’s principal interest lies in shaping strategies and business models that enable organisations to generate value from regulatory change. He specialises in designing and leading business transformational programmes that harness the regulatory agenda to deliver operational and productivity improvements.
