Scrip is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By

UsernamePublicRestriction
UsernamePublicRestriction

Device Financings: Recent Growth, Future Opportunities

This article was originally published in Start Up

Executive Summary

A Reprint--see the article of the same name in In Vivo, May 2008.

You may also be interested in...



Medical Device and In Vitro Diagnostics/Research Deal Statistics Quarterly, Q2 2008

Highlights from the Q2 2008 review of device and diagnostics dealmaking: financing for medical device firms was down 9% from the first quarter to $838mm, which consisted mainly of late-stage venture rounds at 43% of the total. Big Pharma was surprisingly active in device acquisitions, with Novartis buying 25% of surgical instruments maker Alcon, and BMS selling off ConvaTec to private equity as part of its "string of pearls" strategy to focus on biotech. Two FOPOs dominated the $300mm financing the IVD/Research industry, while Invitrogen's $6.4bn stock swap for Applera's Applied Biosystems represented 90% of the M&A dollar volume.

The Medical Device Industry's Robust Times: Are They Sustainable?

Notwithstanding an occasional blip, the environment for medical device companies has never been stronger, with robust technology development, company creation rewarded with high levels of private and venture investment, and strong M&A activity all supporting a business model that was born out of the doldrums that device companies found themselves in a decade ago. Still, there are pressures that are straining the current model and raising legitimate concerns, including physician conflict-of-interest charges; regulatory pathways that are trickier and a climate of evidence-based medicine that leads to longer, more expensive trials; and a robust M&A environment that is sustainable only if a next-generation of acquiring companies steps up. Part one of a two-part series.

Financing Strategies for an Overheated Device Market

At In3 West, a medical device conference held in Las Vegas recently, Windhover Information convened a panel of venture investors to ask them what's in store for device companies seeking investments in the near future, and to address one nagging question: whether or not the heady funding levels of 2007 are sustainable, or even desirable. Certainly exits have become more challenging; consolidation has removed certain would-be acquirers and the IPO market has become more demanding; no company will get out there without at least $30 to $40 million in revenues, several on the panel felt. Others were feeling the pressure of having to carry portfolio companies for even longer periods of time; more complex technologies, lag times at the FDA, and the need to get companies not only to the commercial stage but to a revenue ramp were pushing up the number of years to an exit and total investment dollars. Many were optimistic that early stage deals, exits by acquisition and other unusual phenomena would continue to happen; but selectivity was the theme of the day.

Related Content

Related Companies

UsernamePublicRestriction

Register

LL1134211

Ask The Analyst

Please Note: Click here for more information on the Ask the Analyst service.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel