TOKYO -- Hitachi plans to invest 300 billion yen ($2.7 billion) in research and development in the medical and health care sector, as well as find opportunities for mergers and acquisitions in those businesses between now and the end of fiscal 2023, Nikkei has learned.
Hitachi will concentrate investment and management resources in fields where data analysis technologies can be utilized, such as in the risk assessment of contracting particular diseases and the development of regenerative medicines. The move is part of the company's plans to seek growth opportunities post-pandemic.
Of the 300 billion yen, half will be used as a business development fund for M&A. Hitachi recently invested in a startup specializing in biomedicine. The company plans to accelerate in-house technology development by investing 100 billion yen in R&D.
Hitachi is hoping to increase sales of its medical and health care products to around 360 billion yen by fiscal 2024, up 70% from sales estimates for fiscal 2021.
The Japanese conglomerate has sold its diagnostic imaging business, including CT and MRI, to Fuji Film Holdings, while acquiring 100% ownership of Hitachi High-Tech Corp. that holds measurement and analysis technologies. This was part of Hitachi's effort to shift its business focus from hardware to software.
Hitachi is looking to raise sales from its in vitro diagnosis-related business to 200 billion yen, by developing molecular diagnostics which find signs of diseases such as cancers by analyzing genes in a small amount of blood. Hitachi also aims to develop artificial intelligence that can help to monitor and grow stem cells.
Hitachi will also accelerate collaboration with other companies within its group, in particular, it hopes to develop cancer treatment technologies by utilizing shared knowledge. It will also expand its business to help pharmaceutical companies effectively produce drugs and it hopes to increase sales in this segment to 100 billion yen.
Furthermore, the company wants to build out a database infrastructure that integrates information and disperses it among hospitals. To do this, Hitachi will join a system infrastructure development project aimed at building a central storage for electronic medical records.
According to U.S. research company Grand View Research, the global personalized medicine market is expected to expand at a compound annual growth rate of 6.2% and could reach a value of $796.8 billion by 2028. The competition in this field is fierce. Toshiba is starting trials of its technologies in the early diagnoses of different cancers from a single drop of blood.