How to profit as medicine goes digital

Medical imaging has come a long way since the first X-rays 115 years ago. Today, the global market is expanding at 7% a year as it switches to digital technology. James McKeigue examines the sector and picks the best way to invest.

X-ray technology is now 115 years old. But medical imaging hasn't stood still. Indeed, the quest for new ways of looking into the body without cutting it open has turned imaging into the largest sub-segment of the global medical equipment market. And following the credit crunch some great long-term plays are cheap.

Big technological breakthroughs saw the market grow 10% per year between 2000 and 2007. The industry also consolidated through a series of mergers and acquisitions. But in 2008 the financial crisis caused a slump in medical imaging, with the costliest areas suffering the most. Magnetic resonance imaging (MRI) scans and computed topography (CT) suppliers had a grim two years as hospitals cancelled deals. "Expensive machines costing a million dollars or more [were] not in vogue," says Simone Carron of Frost and Sullivan consultants. However, now the global market is expected to grow by 7% per year to $24.6bn in 2015. Why?

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James McKeigue

James graduated from Keele University with a BA (Hons) in English literature and history, and has a certificate in journalism from the NCTJ. James has worked as a freelance journalist in various Latin American countries.He also had a spell at ITV, as welll as wring for Television Business International and covering the European equity markets for the Forbes.com London bureau. James has travelled extensively in emerging markets, reporting for international energy magazines such as Oil and Gas Investor, and institutional publications such as the Commonwealth Business Environment Report. He is currently the managing editor of LatAm INVESTOR, the UK's only Latin American finance magazine.