1. How Big IT and Big Pharma are
Partnering for Wearables Success

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Table of Contents
Executive Summary .................................................................................................................................3
Major Players and Major Acquisitions ...............................................................................................4
How the Health and Wellness Wearable Market Will Play Out in the Future........................5
Partnerships Between Big IT and Big Pharma for Health and Wellness Wearable.............6
Barriers to Health and Wellness Wearable Innovation.................................................................8
How to Use a Target Acquisition Solution to Find Your Next Opportunity.............................9

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Executive Summary
Consumer goods and technology companies are disrupting the healthcare industry,
making it a more consumer-centric space. From wearable devices to mHealth
apps, companies from adjacent industries are making the healthcare industry more
competitive at a time when patient engagement is essential to market success.
There is an increasing trend of non-traditional players looking to pursue market
leadership and constant product portfolio innovation by entering the wearable
device space.
This new reality poses a large threat for Big Pharma because its transforming the
mergers and acquisitions landscape, leading to new partnerships and opportunities
between Big IT, Medtech companies, startups, sports apparel, and lifestyle brands
that we address in this paper.
Gartner, Inc., forecasts that 274.6 million wearable electronic devices will be sold
worldwide in 2016—an 18.4% increase from the 232 million units sold in 2015. The
market is growing rapidly, and this presents a valuable opportunity for businesses to
take advantage of.
While health and wellness wearables are still in their early stages of maturity, Fitbit
and Apple seem to be the two dominant players in the market. Rather than trying to
offer many condition-specific features, Fitbit’s portfolio of wearables and the Apple
Watch are taking a consumer-centric approach to winning everyday users.
Yet the market is maturing quickly and large organizations are beginning to turn to
partnerships with startups and smaller, innovative companies to speed up their time-
to-market and to gain a competitive advantage.
Growth in Wearable Devices Sold Worldwide
Data Source: Gartner, Inc
2015
232 million
2016
274.6 million

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Major Players and Major Acquisitions
Increased competition in the wearables space has resulted in a race to address
unmet consumer needs and go-to-market product launches.
With agile processes at their core, the start-ups outlined below are gaining
popularity for their ability to innovate in the wearables market and could be
potential acquisition targets:
Qardio: Qardio is a technology start-up focused on innovating in
the personal healthcare market. One of its wearable solutions, the
QardioArm, is a blood pressure monitoring solution with clinically
accurate readings, a portable and easy-to-use design, and the ability
to share data with doctors. Qardio also offers the QardioCore, a
wireless EKG/ECG monitoring wearable that enables real-time heart
health monitoring.
Vital Connect: The VitalConnect Platform with HealthPatch® MD and
VitalPatch™ biosensors is FDA-approved to provide measurements for
single-lead ECG, heart rate, respiratory rate, fall detection and more.
The platform offers biometric data measurements that support decision-
making paradigms of physicians and other healthcare professionals.
Sentio Feel: With 4 integrated sensors, the Feel wristband tracks
biosignals such as galvanic skin response and blood volume pulse
and offers visual results in a companion mobile app. The data enables
Sentio to offer personalized, actionable recommendations and
emotional wellness plans.
These start-ups are putting pressure on larger companies to innovate faster in the
healthcare wearables space. By partnering with or acquiring smaller companies,
the large market players below are able to grow market share inorganically and
answer key consumer unmet needs:

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Samsung and WellDoc: Partnering with WellDoc gives Samsung access to
BlueStar, a mobile prescription solution, to improve the patient experience for
those suffering from chronic illness—specifically, type 2 diabetes.
Adidas Acquires Runtastic: Adidas acquired Runtastic, a fitness app
development company, to improve its portfolio of wearable fitness trackers
and other smart products.
Apple Acquires Emotient, Inc.: Emotion monitoring like in Sentio’s Feel
wristband is becoming popular, and Apple’s acquisition of Emotient, Inc.,
could help it enter the space. Emotient is a start-up with artificial intelligence
technology that can read emotions by analyzing facial expressions. Apple’s
motives are unclear at this point, but the acquisition is telling of digital health
wearable innovation.
The digital health wearables market is still maturing. As large companies acquire
and partner with smaller players and start-ups continue to cause disruption, the
market landscape will continue to evolve.
This is why businesses are adopting data analytics platforms to understand where
their competitors are innovating and what's happening outside of their organization
– what new technologies are being developed? Who should I partner with?
How the Health and Wellness Wearable Market Will
Play Out in the Future
There are three key segments to pay attention to as the health and wellness
wearable market evolves—everyday users, fitness enthusiasts, and condition-
specific use cases.
Everyday users: Big IT will win the everyday users sector. Companies such
as Apple, Samsung and Google have the means and expertise to acquire
tech-based start-ups and better align themselves with consumer needs for
smartwatches.
Fitness enthusiasts: Sports apparel and lifestyle brands are already taking
over the sector for fitness wearables. Nike and Under Armour are two
companies that are investing heavily in healthcare innovation.
Under Armour, for example, has spent $710 million on acquisitions to bolster
their position in this sector, including My Fitness Pal, MapMyFitness, and
Endomondo.

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Condition-specific use cases: Medtech companies such as Medtronic
are currently entering the market in this sector. However, Big Pharma
has an opportunity to win this space because of the greater level of FDA
involvement. These devices will be more invasive, offering actionable health-
related insights for patients. Clinical trials will be a requirement for these
devices and Big Pharma already has experience managing the FDA.
Rather than acquiring start-ups with wearable technology, Big Pharma will
take advantage of its regulatory connections and partner with Big IT for their
technologies. Big Pharma still has plenty of work to do to catch up in the
wearables market, but there are already a few partnerships pharma companies
can look to as examples.
Partnerships Between Big IT and Big Pharma for
Health and Wellness Wearables
If pharma is going to win the condition-specific wearables sector, companies must
follow the example set by a few key partnerships:
The agreement between Roche (a world leader
in point-of-care diagnostics) and Big IT player
Qualcomm aims to improve monitoring and
management of chronic disease patients. With
connected therapy, the companies can improve
patient engagement by meeting needs such as
convenience and ease of use.
Specifically, Roche will take advantage of
Qualcomm’s 2net™ platform to gather data regarding
patient wearables. This will enable Roche to
improve patient care, supporting asynchronous
communication with patients in a low-risk manner.
Without this strategic partnership, Roche
would surely fall behind the technology curve as
patients demand increasingly consumerized features
and benefits from their healthcare providers.
Roche and Qualcomm Partnership

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Novartis and Google Partnership
While Google Glass garnered both positive and
negative attention, the initial iteration of the
technology seemed to fall into the category that led
to decreased interest in wearables.
However, the Novartis/Google partnership is taking
the Google Glass technology and putting it into a
smart contact lens that can help restore the human
eye’s natural ability to focus.
The technology is expected to reach human testing
in 2016, but there is still a long way to go before
this kind of wearable can start impacting presbyopia
treatment. However, this kind of partnership is the
only way a big pharma company such as Novartis
can adapt to the current tech-focused market and
contribute to a health and wellness wearable.
Nokia and Withings
In an effort to improve its positioning in the Internet
of Things, Nokia acquired Withings S.A in early
2016, maker of digital health products and apps
for everyday life. Nokia sold its consumer-facing
business to Microsoft in 2014, but plans to accelerate
its entry back to consumer markets—specifically in
digital health—with this acquisition.
While Nokia’s specific plans are still unclear, the
company will continue Withings’s preventative
research and build on its portfolio of devices for the
everyday patient. For example, Nokia can quickly
enter the health and wellness wearable market with
the Withings Activite fitness tracking watch.
&

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Pfizer and IBM
Pfizer partnered with IBM in April 2016 to develop
wearable sensors that assist clinicians in treating
Parkinson’s patients. While many current mergers,
partnerships and acquisitions focus on the
consumer-facing market, Pfizer’s partnership with
IBM represents Big Pharma’s ability to assist in more
diagnostic use cases for wearables.
Clinical testing will soon start as the two companies
aim to achieve 24/7 monitoring to improve patient
outcomes. According to Mikael Dolsten, President
of Pfizer Worldwide Research and Development, the
partnership combines “Pfizer’s scientific, medical and
regulatory expertise with IBM’s ability to integrate
and interpret complex data in innovative ways."
Selecting the right partner is essential but does not
eliminate other challenges to Big Pharma’s entrance
into the market.
Barriers to Health and Wellness Wearable Innovation
In the coming decade, there will be three barriers that Big Pharma will have
to overcome (aside from meeting consumer needs) if companies are going to
dominate any sector of the health and wellness wearables market:
&
The Technology Barrier: Even before partnering with Big IT, pharma companies
must find ways to measure glucose, calorie intake, brainwave activity, sleep
quality and blood pressure in a continuous, non-invasive, accurate manner.
The Regulation Barrier: The FDA will become increasingly involved as
wearable grow more invasive. Big pharma must convince authorities to buy in
if companies are ever going to provide real healthcare recommendations and
decision support through wearables.
The Consumer Barrier: Meeting specific needs will be a start, but big pharma
must also convince patients that wearables can prolong their lives. This will
require a level of patient engagement that Big Pharma has not yet realized.

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Contributing Authors:
Kobi Gershoni, Chief Research Officer, Co-founder
Dan Terner, MBA, Chief Operating Officer
Shlomi Madar PhD, Head of Life Sciences
Avi Zuck, MBA, Head of Business Advisory Department
Roee Hartuv, MBA, Director of Customer Success
Tamar Sasson, Content Strategy
How to Use Big Data to Find
Your Next Pharma Acquisition
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While partnerships mentioned thus far are proving that big pharma is making strides
to overcome these barriers, there is more work to be done for condition-specific
health and wellness wearables to become a mainstream reality for patients.
How to Use a Target Acquisition Solution to Find Your
Next Opportunity
To grow and adapt, external innovation through acquisition and partnering is
imperative to the survival of pharma companies.
Signals Playbook™, a data analytics platform, was built to empower business leaders
with the tools to quickly look for new opportunities based on a company's IP
strength, product market fit, online presence, and suitability for partnership.
If you’re looking for your next partner, Signals’ acquisition ranking model is
customized for each client. We create a prioritized list of the top 10 or 20 companies
that present the next best business opportunities for you.
Signals is already the preferred data analytics platform for big pharma companies
such as Bayer and Pfizer. If you want to learn more about how the Signals platform
can assist you with your next M&A decision, contact us now for a free demo of the
big data analytics solution.