7 Reasons That Have Medtech Companies Thankful in 2018
The medical device industry has a lot to be thankful for in 2018. The device tax has been delayed; there’s more cash for M&A; and there has been an explosion of the digital health market. These factors are building up medtech for a pretty strong 2019.
Digital Health Funding Soars
Last year was a “record-smashing year” for digital health funding, reported Rock Health, and this year innovators have even more to be thankful for. The venture fund reports that the digital health sector saw investments reach $3.4 billion through the end of June. Companies are “increasingly hitting key validation milestones,” Rock Health reported, helping the niche mature and focus on “proven outcomes.”
Friendly Environment for IPOs
One thing medtech can be thankful for is an environment that supports initial public offerings. Inspire Medical Systems, ElectroCore, Neuronetics are just some of the firms that took the plunge in IPO waters this year. Recently Irvine, CA-based Axonics, which is developing a sacral neuromodulation therapy to treat urinary dysfunction and fecal dysfunction, raised about $125 million through an IPO.
Rise of AI
This year we have seen an explosion in medtech with artificial intelligence. The AI boom has led to many opportunities for entrepreneurs. One such company is Beta Bionics. The startup is combining AI and CGM to develop a device known as the iLet bionic pancreas system and in May the firm received IDE approval for a trial. If the device gains approval, it would be a game changer of the treatment of diabetes and significantly strengthen the presence of AI in medtech.
More Cash and More M&A
In 2018, companies had extra capital on their hands to take part in acquisitions. Companies like Boston Scientific and Stryker did not let this capital go to waste and began picking up smaller firms left and right. In particular, Marlborough, MA-based Boston Scientific has been red hot on the M&A trial almost acquiring one company a month.
Learning How to Play Well with Others
A few years back there were a wide range of think pieces asking the question, will the inclusion of companies like Google/Verily and Samsung hurt the more established players in the medtech industry. Now in 2018, that question is no, and medtech firms have learned collaboration is the key to survive and thrive.
Eric Hargan, Deputy Secretary for Health and Human Services
The Push to Get FDA and CMS Working Together More Closely
For years medtech companies have had to go through two separate arduous paths for approval – from two different agencies, FDA and the Centers for Disease and Control. During the Cleveland Clinic Innovation Summit, Eric Hargan, Deputy Secretary for Health and Human Services told MD+DI there are steps being taken to have both of the agencies collaborate more and simplify the process.
Another Year Without The Med Device Tax
Medtech companies continue to monitor the medical device tax, currently postponed through the end of 2019 but not fully repealed. Healthcare will no doubt be a discussion now that the midterm elections have come and gone, and the Democrats have a majority in the House. But at least 2018 has been a sigh of relief when it comes to the tax, which some say could cripple the medtech industry.