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Shifting Trends In Medical Technologies
Happy New Year!
By popular demand, this week marks my return to regular blogging. I know many of you are keenly interested in progress at Picomole. All I can say is it’s been a very busy time, but I’m happy with where things are heading.
I thought I’d kick things off in the New Year with a topic that’s near and dear to my heart: deal flows and trends. One of the tools we rely on at Picomole is our compilation of deal stats. What’s especially interesting is that we’re starting to see some new trends emerging, based on our survey of deals in the medical device and diagnostics industry.
First of all, M&A deal volume is up dramatically for Q4 2009, with no fewer than 33 deals announced, compared to just 13 for Q4 2008. Total aggregate size of the deals for which financials were disclosed increased to over $3.4 billion in Q4 2009 from $2.6 billion one year ago. No big surprise there, these data just demonstrate that economic activity is returning to normal levels in the medical technology sector.
When we looked at company financings during the same time periods, the biggest trends that we noticed were the dramatic shift in interest away from cardiovascular diseases (Q4 2008) to a focus on cancer (Q4 2009). In Q4 2008, we found 5 financing deals in cardiovascular disease, with 4 disclosing financials valued at $56.5 million total. During the same period, no important cancer financing deals were identified. In Q4 2009, we found just 2 financing deals in cardiovascular disease, valued at $2.3 million. Meanwhile, we tracked 4 cancer financing deals, with 3 disclosing financials valued at $57 million total.
While it’s tempting to leap to conclusions (e.g., cancer is in, cardio is out), we have to caution that there is a fair amount of granularity in the data. Also, past trends are often not reliable indicators of future direction. However, the data do suggest a significant change in priorities, and that may mean an even brighter future for cancer-focused medical technology companies.
Food for thought, as we embark on an exciting new year of deal-making!
Yours truly,
John