Fertile ground for investment

Demand for fertility treatment looks set to increase as more people put off starting a family until later life and advances in technology make it cheaper and easier to access services. HM reports from LaingBuisson’s Fertility Forum which heard how this is making the sector ripe for new investment

People will be able to access more fertility treatment, more cheaply and in a less invasive way in future as advances in medical and digital technology accelerate and the sector attracts increasing interest from investors.

This was the overall consensus from fertility experts and stakeholders presenting at LaingBuisson’s Fertility Forum webinar in November.

Andrew Murray-Lyon, director at global investment bank Houlihan Lokey, said the market remained highly attractive to both growth investors as well as those focused on buy and build.

‘It’s highly fragmented but is well on the way of consolidation and that’s both within country and cross-border,’ he told delegates. ‘I like to think of it being in its second phase of consolidation with enough critical mass now from providers who have transitioned from founder-owned and managed to institutionalised businesses and that comes with opportunities and challenges, but we are seeing a number of these large groups that are really starting to benefit from that critical mass, scale, best practice and synergy.’

Economies of scale

Although the entry of large fertility platforms into the market can be daunting for smaller standalone providers, panellists agreed that scale and investment will ultimately lead to a better experience for patients as well as improve success rates.

Alison Campbell, director of embryology at Care Fertility Group, said the combined knowledge of multiple clinics working together means specialists can support each other to get the best treatment for patients.

‘We collect data on a very large scale and then that data is information that we can use to make further improvements. We’ve got economies of scale and flexibility of staff supporting each other so if we’re short staffed in one laboratory or nursing department, we can share staff across the group,’ she said.

According to Katya Zubareva, partner, at L.E.K. Consulting, both clinicians and patients are beginning to see benefits in corporate platforms.

‘Being able to train your own embryologists because you have the scale to do that, being able to move your clinicians across countries, potentially giving them a career trajectory – corporates are better equipped to do that at larger scale,’ she said.

In terms of interest, Murray-Lyon said investors were looking for sustainable performance with a track record and visible runway of both organic growth and inorganic growth.

‘They want to see clear, defined KPIs both from a patient and an operating standpoint, and ultimately sustained, attractive profitability is always going to attract a premium valuation,’ he added.

The use of donor eggs and sperm remain the predominant form of IVF cycle in the UK and delegates heard that sustainable supply was key to attracting investors.

Some of the larger corporates have sought to ensure their continued supply by acquiring donor banks. Others have been successful in recruiting their own donors or importing from overseas.

Campbell said that being part of a larger group made it easier to sustain supply and that the goal was not to have to rely on external banks.

‘Then you’ve got all control over everything, the quality and the donors, and we’ve got quite strict regulations in the UK about the compensation payments, there’s a lot of tight monitoring as you can imagine regarding donation, so I expect that clinics will find ways to be self-sustained in terms of supply and demand,’ she said.

However, looking ahead, she told the audience that advances in technology along with trends to put off parenthood until later life meant egg freezing would become increasingly commonplace.

‘We have actually seen over the last five years or so, an increase in egg freezing and quite a substantial accumulative analysed growth rate of 42%,’ she said. ‘And we know from the data that’s provided by the HFEA that there is also a national increase in egg freezing.’

Personalised services

More personalised interventions were also among the panellists’ predictions, including the use of sperm DNA testing for males and improved preparation techniques for sperm selection and insemination.

According to Cesar Diaz-Garcia, medical director at IVI London, fertility providers will increasingly move away from the use of morphology to more accurate and functional assessments when selecting sperm.

‘When it comes to the treatment, we will need to be more active and that goes through the pathway of selecting a sperm,’ he said. ‘There are different techniques already in the market and there will be more coming – micro fluidics and other techniques as well as the use of artificial intelligence.’

Helen O’Neill, founder and CEO of Hertility Fertility also believes more personalised approaches will be needed in future.

‘We will no longer accept or rely on just having generalised approaches to treatment and treatment cycles,’ she said. ‘I think we’ll have to look at the individual nature of somebody’s cycles, then their symptoms but equally their genetics.’

Digital access

Panellists also agreed that the digital revolution which accompanied the Covid-19 pandemic out of necessity will continue as patients demand more convenient access.

‘People don’t want to have to go to appointments all the time. They don’t want to have to travel. They want things to be more digital and they want things to be more accessible to them at home,’ said O’Neill. ‘So, I think moving forward, it has changed the landscape in terms of both telemedicine, realising you don’t need to be in front of a doctor necessarily to speak to them. And in fact, there’s a lot of comfort to be taken in being at home in your comfort zone when you hear results.’

Salomé López Garrido, head of operations and corporate development at UR Vistahermosa, said fertility providers needed to offer assistance, consultations and document signing online. However, although she acknowledged that patients want to be more agile in how they access treatment, she maintained that there would still be a need for some face-to-face appointments even when those appointments could feasibly be conducted online.

‘I think there are some phases of the treatment where you need to have a ‘touch’,’ she said. ‘You can take the initial steps online but then when you need to talk to patients about something serious, when we need to give a diagnosis it should be face-to-face. I don’t think this should be online, because this is a medical field where human touch must be important.’