Medical Device and In Vitro Diagnostics/Research Deal Statistics Quarterly, Q4 2009

Article preview reprinted from IN VIVO -  February/March, 2010

Highlights from the Q4 2009 review of medical device and in vitro diagnostics/research dealmaking: Medical device financings - again led by both early- and late-stage VC money, which made up 65% of the quarter's $745mm total - experienced a decline from the previous three-month period, which brought in over $1bn. The year overall fetched just $3.1bn, slightly less than 2008's $3.3bn aggregate. The biggest M&A was Ethicon Inc.'s $785mm takeover of Acclarent Inc. in December. Although Q4 M&A was $1bn higher than Q3, 2009 on the whole was the most dismal year for medtech acquisitions in over five years. On the in vitro diagnostics/research front, the $304mm in financings disappointed as it showed a significant dip from the $821mm done during Q3. Although Vermillion Inc.'s $43mm PIPE made up 19% of the quarter's pie, early- and late-stage VC financings again dominated, together accounting for 65% of Q4's aggregate dollar volume. Becton Dickinson & Co.'s $275mm October buy of molecular diagnostics firm HandyLab Inc. capped off a less-than-outstanding quarter of M&A activity with only five transactions totaling $468mm. For the entire year, in fact, this industry segment only managed to bring in $5.1bn through 21 M&A deals, a significant decrease over 2008's $9.6bn full-year amount. Read more...

Medical Device and In Vitro Diagnostics/Research Deal Statistics Quarterly, Q4 2009

Article preview reprinted from IN VIVO -  February/March, 2010

A look at financing, M&A, and alliance activity October–December 2009

In this issue, we present another installment of our quarterly review of medical device and in vitro diagnostics/research dealmaking – for the fourth quarter of 2009. Our data come from Elsevier's Strategic Transactions.

Amanda Micklus and Maureen Riordan

Medical Device Transactions

Medical device funding was on an upswing in the first three quarters of 2009, peaking at over $1 billion in Q3. However a 35% drop in the fourth quarter to $745 million ended the year on somewhat of a disappointing note, leaving the 2009 total at $3.1 billion, just slightly less than 2008's aggregate $3.3 billion in financing.

Venture rounds, at both the early and late stages, accounted for 65% of the capital raised by device companies in Q4. Companies raising later rounds had a slight edge, bringing in $20 million more than their early-stage counterparts. Late VC financings consistently brought in more money than early venture rounds (or any of the other type of financings) throughout 2009, a sign that venture capitalists, when faced with decisions on where to invest, are more comfortable putting capital into more mature companies either with products ready to market or an exit on the horizon.

Still, the late VC total of $254 million in Q4 pales in comparison to $426 million in the same category in Q3. However, the fourth quarter can boast at least one notable deal – Intuity Medical Inc.'s huge Series D, which pulled in $64 million in December from lead Venrock and other investors. One of several companies aiming to develop a quick and painless glucose test for diabetics, Intuity is looking to launch the All-in-One system, a fully integrated glucose monitor, in the US. Fourth rounds were actually very popular in Q4: besides Intuity, the other top late-stage financings – ENT player Entellus Medical Inc. ($30 million) and cervical implant developer SpinalMotion Inc. ($27 million) – were also Series Ds.

That's not to say that early-stage financings were shabby. In fact, six of the transactions garnered double-digit totals, including a pair of Series As for drug delivery firms CeQur SA, which sells a disposable insulin patch pump, and controlled breathing device maker Activaero GMBH, which brought in $29.6 million and $16 million, respectively.( See "The A-List: 2009's Trend-Shaping Series A Financings," START-UP , January 2010, "CeQur: Conforming to the Lifestyle of the Type 2," START-UP , November 2008, and "Activaero GMBH," START-UP , March 2008.) (Drug delivery proved to be lucrative in Q4 device alliances, too. Five-year-old Intelliject Inc. nabbed $25 million up front and potentially $205 million in milestones for out-licensing its epinephrine auto-injector to Sanofi-Aventis.) CeQur and Activaero were also both part of a strong showing of European device firms in the fourth quarter that raised early-stage rounds (the only type of financing this region participated in during Q4). Together this group brought in $62 million. ( See Exhibit 3.)

Purchase this article online  as a PDF and receive it immediately via email. Questions? Call (800) 332-2181. 100% Satisfaction Guaranteed.

Medical device manufacturers facing many challenges: from the rising clout of group purchasing organizations (GPOs) to payment bundling and physicians' growing allegiance with hospitals in product price negotiations. Get all the answers now in new Medtech Insight's new 24-page Special Report: Medical Device Landscape: How regulatory changes and cost control measures are reshaping the industry. Availible for purchase now!

Limited-time offer: Single-incision laparoscopy or natural orifice surgery: Which will win the day, or is there room for both? Are You Ready For The New Scarless Surgery Revolution? Download you FREE report now

Companies mentioned in this article

Abbott Laboratories Inc.

Abbott Medical Optics Inc.

Activaero GMBH

Advanced Medical Solutions Group PLC

Baylis Medical Co. Inc.

Beckman Coulter Inc.

Becton Dickinson & Co.

BD Diagnostics-TriPath

HandyLab Inc.

CeQur SA

Curetis AG

DiagnoCure Inc.

Entellus Medical Inc.

Fluidigm Corp.

Institut Merieux

bioMerieux SA

Insulet Corp.

Integrated Diagnostics Inc.

Intelliject Inc.

Intuity Medical Inc.

Johnson & Johnson

DePuy Orthopaedics Inc.

Finsbury Orthopaedics Ltd.

Ethicon Inc.

Acclarent Inc.

Kimberly-Clark Corp.

I-Flow Corp.

Lab21 Ltd.

Merieux Alliance

bioTheranostics

Nanosphere Inc.

On-Q-ity Inc.

Qiagen NV

DxS Ltd.

SABiosciences Corp.

Quest Diagnostics Inc.

Sanofi-Aventis

SpinalMotion Inc.

Stryker Corp.

Ascent Healthcare Solutions Inc.

SurgiVision Inc.

Tethys Bioscience Inc.

TransEnterix Inc.

University of Helsinki

Vermillion Inc.

Subscribe to IN VIVO.

IN VIVO delivers:

• Revealing, in-depth coverage of your competitors' strategies
• Incisive projections of future industry trends and their implications for your business
• Expert analysis of key industry developments
• Exclusive interviews with top industry executives and analysts
• In-depth examination of dealmaking, marketing, R&D, regulatory, and finance strategies -- those that were successful and those that missed the mark