2009 MedTech Snapshot: Corporate Finance: Recessionproof—To a Point

According to Ernst and Young’s Pulse of the Industry report on the medtech sector, the industry largely held to conventional wisdom that the medtech sector is recessionproof. In 2009, the sector fared better than many other industries affected by the volatile stock market, a frozen credit market, and layoffs.

December 1, 2009

1 Min Read
2009 MedTech Snapshot: Corporate Finance: Recessionproof—To a Point

Revenues of public companies in the United States and Europe grew 11%, to $289 billion. However, the first half of 2009 saw flat revenues, and there are some significant challenges that continue to threaten financial performance, particularly for big ticket and discretionary items. Unemployment led patients to postpone or cancel elective procedures, thereby putting hospitals in financial trouble. In turn, the hospitals delayed purchase of capital equipment. State and federal budget cuts also diminished government-sponsored health programs.

Venture capitalists (VCs) have become far more selective in providing funding, limiting their focus to larger firms that carry less risk. And although the numbers for VC held in the United States, other types of financing were down. Initial public offerings (IPOs) were almost nonexistent.

Experts agree that as industry changes, so will funding structures. To adapt to these changes, medtech firms must use capital efficiently and demonstrate value. Creativity and innovation are keys to continued success. Luckily, those traits happen to be defining characteristics of medical device manufacturers.

Click images and tables to enlarge:

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

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