Fertility sector tech offers investment opportunities

Pregnancy trackers and other reproductive health technologies are growing in popularity as fertility clinics also explore the potential of machine learning and wearables too. A number of developers of new technology in the sector are thought to be seeking fresh investment in 2020.

The role of technology

The growing demand for fertility services is being driven by a range of factors: many couples and individuals now delaying parenthood; the diminishing stigma around IVF treatment; increased secularity in developed countries; and an increase in global infertility rates, particularly in the west. This increase in demand has coincided with clinics embracing new digital technologies as they look to improve their service offering, clinical efficiencies and clinical accuracy.

Declan Keane, chief executive of Dublin-headquartered ReproMed, said: "We are embracing technology at our clinics as we see the benefits in increasing customer satisfaction, client support services and improving already high pregnancy success rates. ReproMed want to engage with technology companies to improve diagnostics so that men and women can learn about and understand their own personal fertility from an early stage, thus helping them avoid subfertility issues later in life. Education of the individual is the key here. However, we need more technologies to help us to improve our knowledge base."

Some of the innovation in the market is stemming from fledgling health technology companies, with a focus on new products that can help would-be parents better understand and control the reproductive process.

However, other technology is also showing potential in the fertility sector:

• Machine learning can be deployed to improve computer assisted semen analysis (CASA) and embryo-selection in fertility laboratories. Both of these areas have historically involved scope for human error. Different studies on manual semen analysis have shown that different human technicians would sometimes come up with very different numbers for such things as sperm counts or sperm motility – the percentage of sperm moving. Embryo selection by human technicians also involves an element of educated guesswork – technology could learn from the numerous different metrics at play in monitoring multiple embryos grow over time and eventually better determine which embryos are more likely to lead to a successful birth.
• Wearable devices can also monitor chemical changes in a female's circulating blood to predict fertility spikes, such as changes in hormones. This functionality could be added to existing devices such as a Fitbit. Existing technologies focus on more rudimentary and less precise indicators such as body temperature fluctuations.
• Artificial intelligence (AI) counselling apps are becoming popular amongst younger generations, and offer access to advice during unsociable hours or to those who cannot afford traditional therapy. Fertility treatment is a challenging process and can put strain on relationships. Clinics offering counselling services are on the increase.

Ultimately, the direction of travel is towards technology enhancing patient outcomes. Machine learning will develop to act as a tech-based sentry to improving success rates not just in pregnancy outcome but live healthy births and long term normal lives for all babies born through assisted reproduction technologies.

Keane said he expects lab mechanics and consumables to, in time, "mimic the natural conditions of early pregnancy".

"Less physical manipulation of embryos will reduce the suspected negative effects on embryogenesis and gene expression," he said. "AI and robotics will eventually replace the technicians in IVF laboratories."

Maturing regulation

The use of new technologies in the fertility sector has led to calls for greater regulation.

Efficacy of technology remains an area of concern for both consumers and investors alike. Medical journal Obstetrics & Gynaecology tested a host of fertility apps in 2016. It reported that just three out of the 33 apps it assessed were able to predict a woman's precise fertile window. Doubt has also been cast as to whether some "fertility-enhancing pharma products" deliver benefits.

The Human Fertilisation and Embryology Authority (HFEA) in the UK has shown a keen interest in technology in fertility services. It recently asked members of its sub-committee, the Scientific and Clinical Advances Advisory Committee, to advise it of recent developments in AI in relation to fertility treatments. The HFEA is looking to increase its understanding of AI systems in fertility and the practical and ethical challenges they present.

Ethical issues in the use of AI have already been explored by a number of institutions and organisations. Practical guidance to help encourage ethical use of AI has already been in the EU and Singapore, and the European Commission is expected to publish proposed legislation on the topic in the coming weeks. The US is also developing regulatory proposals.

We can also expect regulators to scrutinise data sharing arrangements in the sector should these develop more significantly. There is tremendous demand for embryo development data to help tech developers build smarter tools in the fertility sector, but to-date nobody seems to have cracked a data sharing framework that makes commercial sense for both the clinic and the tech developer.

Investment opportunities

The opportunities for investment have recently been highlighted by business publication Fortune, and research carried out by Mergermarket has identified a number of European providers of new reproductive health technologies thought to be seeking fresh investment in the months ahead.

Companies expected to be involved in fundraising exercises this year include London-based virtual fertility clinic Apricity, male fertility test developer ExSeed Health, Stockholm-based Grace Health, which has developed an AI-powered chatbot to advise women on reproductive health, and Romania-based Femyo, which has developed a pregnancy tracker.

Scope to obtain value from investments in the sector has been evidenced in the case of US fertility benefits management company Progyny, which has seen its share price more than double since its shares began trading on the NASDAQ index in October last year.

Dorian Rees is a Dublin-based expert in corporate transactions at Pinsent Masons, the law firm behind Out-Law.