CEO's Blog

Good morning!

Healthcare reform in the U.S., widely recognized as essential, represents threats to some and opportunities to others. While considerable concern was expressed about the biotechnology sector at a recent investor forum I attended in New York, investors see medical devices in a more positive light.

Below is an excerpt from the remarks of Mr. Paul LaViolette, Venture Partner, SV Life Sciences, who participated in the keynote panel at Elsevier Business Intelligence’s ‘IN3 East’ Partnership/Investment Meeting for Medtech Execs held in Boston on June 23-25, 2009:

“Generally speaking, medical devices as a category are not likely to be targeted, and it is likely to be part of the solution, in my view. The less-invasive revolution is going to continue for a long time. It is a means by which to provide cost-effective care. There are huge categories of disease that can be positively affected by this. Large companies are not going to innovate, generally speaking. They are still going to need venture-backed vitality to drive the engine of growth in devices. So I think we need a little bit of stabilization in the concern about what the health care system reform will entail. I think devices as a general space will be healthy, and that the venture-backed model is going to be absolutely requisite in that paradigm.”

Mr. LaViolette also echoed other panelists regarding his perspective about the drought in medtech IPOs. “It is a lot harder to innovate diversification than it is to acquire it,” said Mr. LaViolette. “So if you talk to the leaders across the device industry – and I do that routinely – every one of them contends that they will be more active on the M&A side over the next three years than they have in the last three years. I think it’s nice to have an IPO market, but that’s not really a hugely vital part of the exit strategy for most categories of medical technology, and I don’t think that an IPO market for devices matters that much.”

Yours truly,
John