Morgan Stanley
  • Ideas
  • Jan 23, 2019

Beyond the Scalpel

The line between science fiction and fact is blurring as genetic intervention, 3D-printed organs, surgical robots and data-based genome diagnostics slowly become reality.

Science fiction…

Imagine human organs that could be printed in machines as is done with documents. What if doctors had the ability to heal spinal cord trauma with cellular technology hours after an accident? Instead of expensive and lengthy diagnostic tests, what if there was a system that could provide reliable answers in minutes and at a fraction of the cost?    

Science fact

All of this is already reality. The first 3D-printed bladder was successfully transplanted into a patient in 2006. While still some time away, laboratories around the world are working toward printing human hearts, kidneys and livers. In 2009, the US Federal Drug Administration (FDA) approved tests of stem cell treatments for people with spinal cord damage, and research published since has shown that a patient’s motor skills improve following the procedure. A young man paralysed from the neck down regained use of his arms and hands after a stem cell injection in 2016.

In 2011, a doctor at the Arizona State University biomedical informatics department noted that many of the sensors used in expensive medical tests could be acquired at a fraction of the price. After five years of development, he had created a machine that cost $600 and could run 33 diagnostic tests for just a few dollars per patient.

These cases sound like science fiction, but they are now science fact. Each represents an early case of innovation in a specific field of medical technology, or ‘med tech’, but portends an exciting future for medicine.    

Investing in medical technology

To help investors navigate the rapidly evolving med tech field, Morgan Stanley has developed an investment framework that focuses on the greatest growth opportunities, and those in which the technology is close to application. These opportunities are filtered by the underlying technologies, prominence of illnesses and stages of medical care.

This helps identify advances that have the biggest addressable markets and helps to avoid highly speculative technologies or companies tied to a single exploratory product.    

Four revolutionary technologies

In a recent report, Morgan Stanley identified four broad areas in the evolving medical technology field investors should be aware of: genomics, microbiome, artificial body parts and data and analytics.    


Genomics leverages DNA and RNA, the fundamental building blocks of life, to personalise treatment. Medical science is developing increasingly sophisticated techniques to identify and treat the genetic causes of disease.


A second emerging medical technology is microbiome. Microbes comprise about 1% to 2% of human body mass and research suggests that these microscopic organisms may play a critical symbiotic role with human hosts. Better understanding of this area may improve treatment for cancer, intestinal diseases and immune systems.

Artificial Body Parts

A third area that offers potential is artificial body parts. This includes robotics, artificial hearts, 3D-printed organs, nanotech and autologous cell therapy – growing an individual’s cells outside of the body as replacement tissue for the host. Shortage of organs is one of the critical issues facing the health system. Solving this shortage would represent a huge advance.

Data and Analytics

The amount of health data collected globally is increasing at an astonishing rate and represents a massive opportunity to apply analytics to medical science. As an example, Harvard University in 2017 estimated analytics could save the pharmaceutical industry $27 billion in drug development costs by 2025. Another area that is likely to benefit from tremendous processing power is genomic sequencing.

Healthcare driven by disruption

While medical technology has made tremendous strides over the past 100 years with the development of solutions to once untreatable diseases, the next century may look more like science fiction than contemporary medicine.

The health care sector is prime for disruption as data analytics facilitate more rapid drug testing and personalised treatment, genomic diagnostics and editing enter mainstream, secrets of the microbiome are unlocked, and biological or robotic prosthetics help people live longer and more fulfilling lives. Investors should be on the forefront of this transformation while being mindful of the risks.


For more on investment opportunities in medical technology or a copy of our research report, speak to your Morgan Stanley financial adviser. Plus, more Ideas from Morgan Stanley’s thought leaders.