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Corporate Finance: Short Investment Cycles Could Help Medical Devices Stay Afloat

December 1, 2008

2 Min Read
Corporate Finance: Short Investment Cycles Could Help Medical Devices Stay Afloat

2008 MEDTECH SNAPSHOT

By any measure, medical technology is an extraordinarily diverse industry, says a report on Medical Technology from Ernst & Young. And its not just the products, the types of companies and how they are funded are just as varied. “Medtech companies run the gamut, from venture-backed, prerevenue startups to mature global conglomerates,” says the report, titled “Pulse of the Industry: U.S. Medical Technology Report 2008.”

Investor attention buoyed medtech products in 2007, as U.S. companies raised close to $10.7 billion, a 2% increase over the game-changing numbers of 2006. However, the first quarter of 2008 has seen very different results. Although venture funding has remained strong and is on track to rival the performances seen in 2006 and 2007, public equity markets have retreated. The credit crisis has affected all aspects of funding, even in the comparatively strong medical technology market. In the current climate, however, some good news yet remains. The medtech sector's relatively short innovation cycles and quick exits may hold significant interest to venture investors.

Click images and tables to enlarge:

 


“The medtech sector's shorter innovation cycles and quicker exits may look increasingly attractive to many venture investors in the current
climate.” —Ernst & Young


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The medical device industry continued to outperform the S&P 500 index in many categories. Source: Capital IQ.

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The top 40 public companies that provide medical device manufacturing worldwide, ranked by trailing 12 months (TTM) revenues. Source: Capital IQ.

Copyright ©2008 Medical Device & Diagnostic Industry

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