Article preview from IN VIVO - April 1, 2011
At Elsevier Business Intelligence's February IN3 West conference, a panel of leading device venture investors, who remain committed to and are actively doing deals in medtech, discussed how the recent recession has affected device investing and how much, if at all, that world has changed as a result.
Article preview from IN VIVO - April 1, 2011
While the onset of the recent economic downturn may still seem like just yesterday, as time passes since 2008 and the global economy regains its equilibrium, it becomes possible to assess the impact of the crisis, both in terms of current and future trends. At this year's IN3 West conference, sponsored by Elsevier Business Intelligence (EBI) in Las Vegas in February, a panel of leading device venture investors, who remain committed to and are actively doing deals in medtech, discussed how the recession affected device investing and how much, if at all, that world has changed as a result.
The perspectives of the panelists may surprise many in the industry primarily because after all the worries regarding the long-term damage that people feared might result from the crisis, most investors appear to be remarkably sanguine, if not downright bullish, about this sector's future fortunes. Although feelings of normalcy and comfort have not yet returned to the market, with many still jittery from recent events, the investment numbers reflect a level of solid consistency. Looking at one metric as an example, while the total number of venture dollars going into medical devices does not approach the record near-$4 billion range of the robust 2006–2007 period, investment has remained remarkably stable during the downturn in the $2.5 billion range. And indeed many industry executives believe that the peak period of device investing actually reflected an unhealthy and unsustainable frothiness resulting largely from the increased involvement of purely financial investors in the sector and that a correction was inevitable, having nothing to do with the global downturn. The takeaway: rather than result in a dramatic, long-term shift in the medtech investment model, the recession represented more of a cyclical adjustment.
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