A five-year review of returns from medical device mergers and acquisitions.
VC Investment In Diagnostics And Eyes Delivering Strongest Returns
Article preview from Start Up - September, 2010
VC Investment In Diagnostics And Eyes Delivering Strongest Returns
For the past five years, venture capital investments in eye companies and those producing new diagnostics have delivered the strongest returns for device investors, according to our survey of more than 70 venture-backed companies acquired over the past five years. ( See "Device VCs Find New Hope in Old Exit Path," IN VIVO, July 2010 [2010800126].) However, cardiovascular and orthopedic companies, including those working in the spine, continue to be among the more prolific sources of exits.
To be included in the study the companies needed to fit two criteria. They had to be venture-backed, and the terms of their venture financing and subsequent acquisition had to be available either through a press release or report on the financing. In a few cases, the information came directly from the principals themselves.
Of those companies, we examined the return potential of 61 companies, looking at those therapeutic categories with more than three deals. ( See Exhibit 1.) The examination supports the logic of device investors who are sticking with what they know in cardiovascular and orthopedics companies, but it also invites further investment in the diagnostics arena.
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