Medtech Investing 2009: What's Changed?
Article preview reprinted from Start-Up - May, 2009
The medical device industry is undergoing a crisis of funding, but not of confidence, according to a panel of investors convened at Windhover's recent medtech conference, In3 West,. The conference panel sought to explore how the medical device investment community is operating in these troubled times, how they will invest going forward, and how they will support their companies if things don't improve. We were especially curious to know if the funding challenges that start-ups face are really due to the overall dire economy, or if that dark cloud merely masks changing fundamentals in the medical device industry that are making it more difficult for companies to find funding, gain FDA approval, and enjoy a healthy exit. Our panel weighs in on the matter. Read more...
Medtech Investing 2009: What's Changed?
Article preview reprinted from Start-Up - May, 2009
The medical device industry is undergoing a crisis of funding, but not of confidence, according to a panel of investors convened at Windhover's medtech conference In3 West, held in Las Vegas in March 2009. The panel included representatives from the venture capital industry: New Leaf Venture Partners, Versant Ventures, and Frazier Healthcare, and from Devicor Medical Products Group LLC, a new company backed by private equity firm GTCR, which hopes to replicate the success it has had with the specialty pharmaceutical model.
The conference panel sought to explore how the medical device investment community is operating in these troubled times, how they will invest going forward, and how they will support their companies if things don't improve. We were especially curious to know if the funding challenges that start-ups face are really due to the overall dire economy, or if that dark cloud merely masks changing fundamentals in the medical device industry that are making it more difficult for companies to find funding, gain FDA approval, and enjoy a healthy exit.
Signs of cracks in the traditional infrastructure of medical device investing seem to have appeared in advance of the sub-prime mortgage crisis that brought the stock market down. Where devices once offered a quick, and somewhat assured, return relative to biopharmaceuticals, development time lines in the device industry have lengthened to eight to nine years now, approaching those of drugs, and more time to market means greater capital requirements. But although devices are approaching the development challenges of biopharmaceuticals, when they're done, very few of them will serve billion dollar markets. Still, especially now in a strained financial atmosphere, there are those who believe that medical devices are still the safe haven from biopharmaceutical risk that they have always been; medical devices are expected to be affected less than pharmaceuticals will be by the Obama administration's proposed 2010 fiscal budget, which aims to finance health care reform with cuts in health care spending.
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Companies mentioned in this article:
Abbott Laboratories Inc.
Cyberkinetics Neurotechnology Systems Inc.
VNUS Medical Technologies Inc.
Xtent Inc.
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