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The Business of Babies · What the Flux

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  Speaker 1: This is what the flux. I'm Larissa and it's Wednesday,
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  Speaker 1: the fifth of August. Here are the three biggest news
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  Speaker 1: stories today. For our first story, Quantus is seriously considering
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  Speaker 1: offshoring one thousand jobs to India to cut costs and
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  Speaker 1: overhaul operations using AI. It's part of a deal with
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  Speaker 1: consulting giant Accenture and would involve Quantus outsourcing marketing, finance,
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  Speaker 1: and HR roles. For our next story, Camber isn't seeing
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  Speaker 1: any growth in active monthly users, a benchmark for tech
• 0:33
  Speaker 1: company uses alongside revenue to track product growth. Camber had
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  Speaker 1: two hundred and eight million users in July, similar to
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  Speaker 1: this time last year. And for our final story, Snaps,
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  Speaker 1: the company behind Snapchat, has beaten its revenue goals thanks
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  Speaker 1: to recent ad boost from the Fever World Cup. Snap's
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  Speaker 1: second quarter revenue is up around nineteen percent to US
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  Speaker 1: one point six billion. Analysts had expected it to be
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  Speaker 1: around one point five to four billion. In this set,
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  Speaker 1: Going Deep, we'll be doing bite sized explorations into the
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  Speaker 1: most interesting industries, businesses, and economic events in Australia and
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  Speaker 1: around the world. For today's episode, we'll be diving into
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  Speaker 1: the business of IVF birth rates are hitting record lows.
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  Speaker 1: People are having kids later than ever, and a seven
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  Speaker 1: hundred and thirty million Australian industry has built itself on
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  Speaker 1: that gap. But at the same time, we've seen two
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  Speaker 1: of Australia's biggest IVF providers hit by major scandals in
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  Speaker 1: the same year. I'll be breaking this episode down on
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  Speaker 1: the IVF industry.
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  Speaker 2: With Justin thanks Verisa. Okay, so let's say some contexts.
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  Speaker 2: We know that people are having children later than at
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  Speaker 2: any point in recorded history in Australia.
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  Speaker 1: The median age for mothers giving birth in twenty twenty
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  Speaker 1: four was thirty two point one.
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  Speaker 2: Years, and that's a record high.
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  Speaker 1: And we know there's a biological reality to a lot
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  Speaker 1: of this too.
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  Speaker 2: Yeah, the gap between when people are ready to have
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  Speaker 2: children and when they're biology's most cooperative is getting wider.
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  Speaker 1: And that gap is a big reason why the fertility
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  Speaker 1: industry has grown over the past decade.
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  Speaker 2: But it's not the only reason. IBF's been around since
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  Speaker 2: the nineteen seventies, when Monash University scientists produced one of
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  Speaker 2: the world's first IVF pregnancies.
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  Speaker 1: And for decades IVF was a bit more niche.
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  Speaker 2: But over the last decade, it has seen rapid growth.
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  Speaker 1: Yeah, we've seen assistive reproductive technology cycles like IVF increased
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  Speaker 1: by more than fifty percent over the past decade.
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  Speaker 2: What's changes who's using it? We've got older first time parents,
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  Speaker 2: same sex couples, single people looking to start a family.
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  Speaker 1: And there's also a fast growing new category of people
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  Speaker 1: freezing their eggs in their late twenties.
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  Speaker 2: Yeah. Globally, egg freezing has grown sixty percent over the
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  Speaker 2: past decade.
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  Speaker 1: And it's now one of the fastest growing segments in
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  Speaker 1: the entire fertility sector.
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  Speaker 2: Wow. Okay, So Larisa, where are we today? Well?
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  Speaker 1: As a result of these societal changes, the fertility market
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  Speaker 1: in Australia and around the world continues to grow.
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  Speaker 2: The Australian IBF market is worth approximately seven hundred and
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  Speaker 2: thirty million dollars annually.
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  Speaker 1: And it's projected to reach one point six billion by
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  Speaker 1: twenty thirty three and an eight point five percent annual
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  Speaker 1: growth rate.
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  Speaker 2: Get this, one hundred thousand assisted reproductive cycles take place
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  Speaker 2: in Australia every single year.
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  Speaker 1: And in the Australian market, there are three major players
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  Speaker 1: that have more than eighty percent of the market share.
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  Speaker 2: There's vertis Health, which operates IVF Australia, Melbourne IVF and
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  Speaker 2: Queensland Fertility Group.
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  Speaker 1: It was taken private by a private equity giant, BGH
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  Speaker 1: Capital and twenty twenty two.
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  Speaker 2: Then there's Monash IVF, the only major publicly listed fertility specialist,
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  Speaker 2: and then there's Jenea and Larisa Well. IVF may be
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  Speaker 2: what these companies are known for. They've expanded their offerings
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  Speaker 2: to everything around conception too.
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  Speaker 1: There's genetics testing, sperm banking, donor programs and day surgery facilities, so.
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  Speaker 2: Patients essentially can go from an initial consultation to egg retrieval,
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  Speaker 2: to genetic screening to transfer without leaving the company does.
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  Speaker 1: As these companies gain more customers and more attention, they've
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  Speaker 1: also suffered from some major controversies.
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  Speaker 2: Yeah. Monash IVF, the ASX listed company, had what can
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  Speaker 2: only be described as a catastrophic twenty twenty five Yeah.
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  Speaker 1: In April, the company disclosed that a patient at its
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  Speaker 1: Brisbane clinic had received the wrong embryo in twenty twenty three,
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  Speaker 1: resulting in a birth which was only actually discovered two
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  Speaker 1: years later.
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  Speaker 2: Their share price dropped twenty four percent on the day
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  Speaker 2: of this disclosure.
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  Speaker 1: Then in June twenty twenty five, just a few months later,
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  Speaker 1: a second incident was disclosed where a patient received their
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  Speaker 1: own embryo instead of their partners.
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  Speaker 2: Shares fell another twenty four percent.
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  Speaker 1: By mid twenty twenty five, Monash's IVF stock had fallen
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  Speaker 1: more than fifty percent below its pre April value.
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  Speaker 2: But that's not all. Monash also had settled a class
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  Speaker 2: action lawsuit over fifty five million dollars to seven hundred patients.
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  Speaker 2: And why was that Well, the patients alleged to the
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  Speaker 2: clinic destroyed embryos due to faulty genetic testing which wasn't accurate.
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  Speaker 1: But Monash wasn't the only major player in trouble that year.
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  Speaker 2: Now, in February twenty twenty five, Jania, Australia's third largest
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  Speaker 2: IVF provider, suffered a cyber attack.
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  Speaker 1: And the hackers stole patient midiicare numbers, medical histories, diagnoses, medications,
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  Speaker 1: cycle data and pathology results.
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  Speaker 2: And this was subsequently published on the dark web.
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  Speaker 1: SOEs weird to go from here?
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  Speaker 2: Well, clearly there's a pretty big demand for these services.
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  Speaker 1: But it's expected that consolidation trend will continue.
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  Speaker 2: Yeah, especially as there are more compliance regulations put on
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  Speaker 2: the entire industry after all these controversies.
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  Speaker 1: Independent audits, stricter lab verification, mandatory incidents.
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  Speaker 2: And all of it adds costs. We know that private
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  Speaker 2: equity already owns Vertice.
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  Speaker 1: And another private equity player, Genesis Capital, made an opportunistic
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  Speaker 1: bid for Nash IVF after their recent scandals.
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  Speaker 2: But Larissa scale doesn't automatically equal trust.
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  Speaker 1: No, and in the sector, trust is a large part
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  Speaker 1: of the service.
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  Speaker 2: We know the patients are often going through one of
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  Speaker 2: the most physically and psychologically demanding periods of their lives.
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  Speaker 1: Yeap, so layering a major trust crisis on top of
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  Speaker 1: that is significant, and.
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  Speaker 2: When that trust breaks down, patients vote with their feet.
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  Speaker 1: Monash's new patient registrations felt twelve percent in the months
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  Speaker 1: following the scandals.
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  Speaker 2: Their market share dropped two and a half percent in
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  Speaker 2: just one half, which was the biggest declinent in its
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  Speaker 2: history as a listed company.
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  Speaker 1: So does now the entire sick has to prove that
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  Speaker 1: it can deliver reliably at one of the most stressful
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  Speaker 1: moments in people's lives.
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  Speaker 2: And not just to the regulators, but to prospective patients too.
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  Speaker 2: Fox Time, we hope you enjoyed our deep dive into
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  Speaker 2: the business of babies and the growth of the IVF
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  Speaker 2: industry in Australia. On Friday, we're going to be looking
• 6:14
  Speaker 2: at the decline and collapse of the global mind diamond industry.
• 6:19
  Speaker 2: We've seen to beers wrack up billions in losses and
• 6:21
  Speaker 2: lab grown diamonds take over. Hearf the engagement written market.
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  Speaker 2: Looking forward to doing a deep dive INN. Thanks for
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  Speaker 2: listening and we'll see you on Friday.