Growth of medtech sector in 2013

Still hope for modest growth, according to EP Vantage’s new report

14-Mar-2014 - United Kingdom

At the half-year mark, the medtech sector was on course for its worst year in a decade in terms of M&A activity, EP Vantage concluded last fall in its Half Year Review 2013 report. Unfortunately, the second half of the year showed little sign of improvement, according to EP Vantage’s latest report on the sector, “Medtech 2013 in Review.”

Though economic conditions as a whole are improving, hospitals, insurers and patients continue to exercise prudence. With less money coming in, large firms are avoiding risky acquisitions of early-stage companies. Venture capitalists are following suit, with most awarding investments cautiously to companies with approved products. This poses a challenge in and of itself considering the lack of recent FDA approvals.

"The medtech industry has lost its sense of adventure," said Elizabeth Cairns, EP Vantage medtech reporter and author of the report. "Demoralized by pricing pressure and the increasing demands of regulators, the large companies are taking refuge in safe purchases rather than taking a chance on something new."

Among the report’s key findings:

While 2013 failed to match 2009 in being the worst year in a decade in terms of acquisitions, M&A deals were still down 16 percent from 2012
The value of all MedTech acquisitions totaled $19.3 billion, less than half the amount spent in 2012
Baxter International was the year’s biggest spender with its $3.9 billion acquisition of dialysis-tech maker, Gambro
Device makers raised just over $3.6 billion in venture capital investments in 2013, only $42 million more than 2012
Only 25 funding rounds were completed last year, making 2013 the worst year since 2008 on financing count
FDA approval rates were down 44 percent from 2012, with only 23 approvals compared to 41 in 2012

https://www.analytica-world.com/en/news/147354/growth-of-medtech-sector-in-2013.html