Article preview reprinted from IN VIVO - September/October, 2009
Highlights from the Q2 2009 review of medical device and in vitro diagnostics/research dealmaking: Financings by medical device companies jumped an impressive 62% over Q1 to $847 million--primarily from private VC rounds that contributed over 90% of the total deal volume with 52 early- and late-stage transactions--indicating a possible rebound in fundraising. Medical device M&As, on the other hand, proved to be a disappointment with only ten deals raising $794 million, most of which was Covidien's $470 million cash purchase of Vnus Medical. Although there were no big mergers, some device firms instead turned to the strategic alliance as a way to gain inexpensive products and technologies. On the in vitro diagnostics/research side, financing activity captured over three times the previous quarter's dollars through 12 deals totaling $302 million, however, almost 80% of that amount was from Beckman Coulter's $239 million FOPO. VC rounds only averaged $6 million apiece, with early- and late-stage rounds together bringing in $43 million. M&A in this industry segment was almost non-existent with only two transactions adding up to $358 million, a mere third of Q1 M&A deal volume. Read more...
Medical Device and In Vitro Diagnostics/Research Deal Statistics Quarterly, Q2 2009
Article preview reprinted from IN VIVO - September/October, 2009
Medical Device Transactions
Compared with the first three months of 2009, financings by medical device companies jumped an impressive 62% in the second quarter to $847 million, indicating a possible rebound in fund-raising to the near-billion-dollar totals seen during the first three quarters of last year.
Not surprisingly, venture rounds were the majority of the money, raking in $774 million in Q2 as venture capitalists continue to pour money into the portfolio companies that they hope will provide them with profitable exits. (See "Have Device VCs Bet Too Big?" IN VIVO, September 2009.) Late VC financings again represented more than half the grand total in the quarter--with 16 of the 21 transactions boasting proceeds of $10 million or higher--thanks mostly to Small Bone Innovations Inc's Series D round, which in June had pulled in $108 million of a potential $121 million. Actually SBI is only the second private medical device company to raise over $100 million through a venture round besides Globus Medical Inc., another spinal device player, which scored $110 million in its Series E back in 2007. (" IN VIVO, September 2007.) Several investors participated in SBI's financing, most of them based outside of the US, a hint that the developer of devices for small bones and joints is looking to establish commercial operations in foreign markets.
In fact, VC investments in orthopedics across certain segments, like biomaterials and spinal devices, seem to be picking up. (See "Ortho VCs Are Getting Soft, But Still Show Spine," START-UP, July 2009.) In the second quarter alone, private companies developing in the musculoskeletal space raised a total of $224 million (including SBI's funds), about $35 million more than private cardiovascular-focused firms, which usually bring in just as much or more money than orthopedics-focused ones. Still, among the CV players there were some standouts, including PhotoThera Inc.'s $50 million Series D, led by Warburg Pincus. Established in 1997 and previously known as Acculaser Inc., PhotoThera hopes to finally provide acute ischemic stroke patients with a truly innovative product in its NeuroThera system, which employs near-infrared transcranial laser energy and is currently undergoing clinical trials. The company claims that the laser therapy improves oxidative energy metabolism, which some scientists believe can enhance neurorecovery mechanisms.
- Amanda Micklus and Maureen Riordan
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Companies mentioned in this article:
23andMe Inc.
Abbott Laboratories Inc.
Asahi Kasei Corp.
Asahi Kasei Kuraray Medical
Baxter International Inc.
Beckman Coulter Inc.
Boehringer Ingelheim GMBH
Covidien Ltd.
Power Medical Interventions Inc.
Vnus Medical Technologies Inc.
Cytox Ltd.
Dako AS
DxS Ltd.
Edwards Lifesciences Corp.
Encision Inc.
Exact Sciences Corp.
ForSight VISION3 Inc.
Genzyme Corp.
Globus Medical Inc.
Intuitive Surgical Inc.
NeoGuide Systems Inc.
Inverness Medical Innovations Inc.
Concateno PLC
Cozart PLC
Laboratory Corp. of America Holdings
Monogram Biosciences Inc.
Mayo Clinic College of Medicine
Med BioGene Inc.
Nestle SA
Alcon Inc.
Novadaq Technologies Inc.
Novartis AG
NuVasive Inc.
Cervitech Inc.
NxStage Medical Inc.
Olympus Corp.
Osiris Therapeutics Inc.
Pfizer Inc.
PhotoThera Inc.
Progentix Orthobiology BV
Sequenom Inc.
Sigma International General Medical Apparatus LLC
Small Bone Innovations Inc.
Transcend Medical Inc.
University of Oxford
Visiogen Inc.
ev3 Inc.
Chestnut Medical Technologies Inc.
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