Article preview from Start-Up - January, 2013
Each year, START-UP reviews the sectors of the medical device industry that received private funding to see what will be filling the pipelines of medical device companies in the future. Despite gloomy talk by VCs and strategics predicting a future scarcity of new innovative products, the actual data from 2012 show many categories holding steady and pockets of up-and-coming technologies attracting investment.
Medtech’s Share Of Private Investment Dollars In 2012
Article preview from Start-Up - January, 2013
Each year, START-UP reviews the sectors of the medical device industry that received private funding to see what will be filling the pipelines of medical device companies in the future. Despite gloomy talk by venture capitalists and strategics predicting a future scarcity of new innovative products, the actual data from 2012 show many categories holding steady and pockets of up-and-coming technologies attracting investment. It’s true that dollars invested in 2012 are only a fraction of what they were five years ago, but the numbers show that the previous year’s sharp rate of decline didn’t really continue in 2012. In 2012 $2.55 billion went into 135 private financing deals as compared with 156 private medical device deals in 2011, which took in $2.86 billion (a figure that doesn’t include in vitro diagnostic technologies).
As always, the most active category was cardiovascular devices, which, with a slightly lower deal volume (25 deals in 2012 as compared with 35 in 2011), brought in $573 million in 2012, slightly more than the previous year. The bump up was due to renal denervation and its advances, that is, the catheter-based ablation of sympathetic nerves for the treatment of drug resistant hypertension. This new product category promises to be bigger than anything in interventional cardiology ever was and received a lot of airplay at investor meetings and clinical conferences last year. (See "The Renal Denervation Buzz: Separating Fact From Myth" — "The Gray Sheet," Jul. 9, 2012.) Cibiem Inc., from the founders of the field, Mark Gelfand and Howard Levin (who founded Medtronic Inc.’s Ardian), raised a $10 million Series A for a catheter-based treatment for hypertension that targets carotid bodies, rather than the renal sympathetic nerves. [See Deal]Ablative Solutions Inc., which raised a $5.3 million Series A round, has a technology that kills renal nerves by delivering ethanol rather than using an energy-source to ablate them. [See Deal]Kona Medical Inc. raised $40 million in a Series C round, to develop a noninvasive device that uses ultrasound to ablate renal nerves. [See Deal] In a field in which first-generation companies are already being snapped up (after Covidien PLC’s acquisition of Maya Medical Inc.[See Deal] and Boston Scientific Corp.’s purchase of Vessix Vascular Inc.[See Deal]) these three companies have differentiated platforms and novel IP to attract future acquirers.
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