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In Vitro Diagnostics (IVD), Cardiovascular Devices and Healthcare IT Markets Attracted the Most PE/VC Investments in 2010

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In Vitro Diagnostics (IVD), Cardiovascular Devices and Healthcare IT Markets Attracted the Most PE/VC Investments in 2010

A total of 769 private equity (PE) and venture capital (VC) financing deals took place in 2010, compared to 556 in 2009. In 2010, the in vitro diagnostics (IVD), cardiovascular devices and healthcare IT markets attracted the most PE/VC investments, with shares of 20%, 13% and 10% respectively. Within the IVD devices categories, it is the immunochemistry and clinical chemistry categories that are gaining investor attention. In the cardiovascular devices market, it is interventional cardiology that has proved attractive. In interventional cardiology, minimally invasive techniques are being widely chosen by the patient population, thus resulting in the uptake of catheter approaches for congestive heart failure, mitral valve repair and the next generation stents. Large companies are showing an interest and investing in the research and development (R&D) of minimally invasive techniques to treat coronary artery disease and valve repair. The other major categories that received PE/VC investor attention were orthopedic devices, surgical equipment and diagnostic imaging.

PE/VC Investment in Start-up Firms was the Predominant Strategy that

Investors Followed in 2010

In 2010, the various stages of medical devices companies in which PE/VC funding was aimed at start-up medical device firms with 53% of the total 769 deals. The second most adopted strategy for investment was in the expansion stage, with 21%, followed by later stage investments, with 16%.

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PE/VC funding was adopted by investors and medical device companies to give high speed access to new advanced technologies and avoid barriers to entry, expand their portfolio of products and to improve their asset valuations. From 2007–2010, PE/VCs increased their financial investments in the medical device market because of the apparent high potential of the North American and European healthcare sectors. VC firms invest in early-stage companies with high potential for future growth. Similarly, PE firms invest in start-ups, and help them to streamline their operations. Start-up companies in medical devices are started by innovators who have little knowledge or experience of entrepreneurship. PE/VCs help these companies by providing adequate management support. However, these firms invest with an intention of profitable exits from their investments. The biggest exit strategies for PE/VCs are public offerings or acquisitions by other bigger companies. Startup firms are more focused on developing new technologies and work on ways of commercializing technology. Therefore, PE/VC investment is being increasingly

seen in start-up firms.

For further details, please click or add the below link to your browser:

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The Majority of PE/VC Financing in Medical Devices that Took Place from

2007 to 2010 were of Deal Value Less than $10m

The majority of PE/VC funding for the medical devices industry from 2007 to 2010 was for deal values of less than $10m. The medical equipment market offers strong growth prospects and is highly regulated and driven by constant technological innovation. The two largest markets for medical equipment are the US and European Union (EU). The recent trends for financing have undergone a significant change due to the changing scenario worldwide. Out of the various options available, investors are financing more in start-up firms. The medical device industry is highly fragmented and the need for new technological innovation is huge. There are many small players with annual revenues of less than $5m. Small innovative firms are associated with developing new medical technology products. Most of these organizations specialize in only one technology and much redundancy exists between companies. Start-up firms in medical device companies are groomed by investors so that they can be acquired by larger companies. Small firms, after receiving US FDA marketing approval for their products, are targeted for acquisition by large medical equipment companies. There exists an advantage for both small and large firms. Small firms benefit from added resources, while large firms gain from advanced technologies. Therefore all these factors and the fiscal pressure of staying afloat are compelling many smaller firms to merge with larger ones.

North America is the Biggest Market for PE/VC Deals in Medical Devices

Industry in 2010

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North America is one of the biggest markets for PE/VC investment in medical devices. Between 2007 and 2010, the targets for medical device PE/VC deals were concentrated heavily in the US, Canada, Europe and the Asia-Pacific. The US is the most attractive venue for PE/VC deals in the global medical devices industry due to a higher concentration of companies with key products and technologies in the development stage. A robust research program, considerable public and private funding opportunities, the protection of intellectual property, ample infrastructure and public entrepreneurship programs have created the perfect mix for medical technology innovation in the US.

GBI Research’s report, “PE/VC Activity in Medical Devices - Number of PE/VC Investments in Small Sized Medical Devices Companies Has Increased in the Past Four Years” provides key data, information and analysis on the global medical devices market. The report provides private equity and venture capital (PE/VC) activity in 18 medical device market categories – In Vitro Diagnostics, Cardiovascular Devices, Orthopedic Devices, Anesthesia and Respiratory Devices,

Dental Devices, Diabetes Care devices, Diagnostic Imaging, Drug Delivery Devices, Endoscopy Devices, Ear, Nose and Throat Devices, Healthcare IT, Hospital Supplies, Nephrology and Urology, Neurology Devices, Ophthalmic Devices, Patient Monitoring, Surgical Equipment and Wound Care Management. The report provides comprehensive information on the factors affecting PE/VC investment in these categories. The report also reviews the detailed analysis of the PE/VC deals worth

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greater than $100m in each category. This report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GBI Research’s team of industry experts.

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Visit our report store:

For more details contact:

North America: +1 646 395 5477

Europe: +44 207 753 4299

+44 1204 543 533

Asia Pacific: +91 40 6616 6782