Device deals climb with a focus on cancer, cardiovascular markets
The number of medical device deals and their disclosed values appear to be rising, according to data from Cortellis Deals Intelligence (CDI).
CDI reported 202 med-tech deals in 2014, compared with 237 deals in 2015 and 287 deals in 2016. The total value of deals was $22.85 million in 2014, $251.06 million in 2015 and $1.54 billion in 2016.
The industry's deal values are likely significantly higher, however, when encompassing the entire med-tech landscape covered routinely by Medical Device Daily, which includes liquid biopsies and regenerative medicine, among other advanced medical technologies beyond traditional medical devices. The majority of deals included in CDI did not disclose financial details.
The bulk of the total value for years 2014 to the present consists of upfront dollars, according to CDI, showing that $1.63 billion of the $1.82 billion total was upfront money.
For 2016, the highest percentage of deals focused on cancer – 36 total deals, or 13 percent – and cardiovascular indications – 35 deals, or 12 percent. Both numbers climbed dramatically from 2014 and 2015, which showed 21 (10 percent) and 18 (8 percent) cancer deals and 17 (8 percent) and 20 (8 percent) cardiovascular deals, respectively. All other deals, including those focused on central nervous system disorders, wound healing, diabetes, respiratory diseases, infections and spinal or musculoskeletal injuries, fluctuated only slightly between the years.
An increase in cancer deals may be due partly to the burgeoning biopsy market. University of Texas Health Science Center in Houston signed on with South San Francisco-based Fluxion Biosciences Inc. in April 2016 to develop a new liquid biopsy to diagnose and treat cancer. A month later, Eigen, of Grass Valley, Calif., and Hitachi Medical Systems Europe agreed to distribute the robotic 3-D targeted prostate biopsy device, Artemis, in Europe. And in July, Advanced Medical German Co., of Kuwait City, Kuwait, agreed to distribute San Diego-based Spectrascience's Wavstat Optical Biopsy System in the Middle East for colorectal cancer.
MOSTLY NORTH AMERICA
The vast majority of companies working in the space have headquarters in North America or Europe. All but 17 of the 202 deals from 2014 involved a principal company based in North America or Europe; in 2015, it was all but 29 of 237 and in 2016, all but 21 of 287. In fact, North America – predominantly the U.S. – housed 69 percent (199) of the principal companies conducting deals in 2016, compared with 54 percent (128) in 2015 and 58 percent (118) in 2014.
The top deal reported in CDI over the last three years occurred in October 2016, when Terumo Corp., of Tokyo, purchased St. Jude Medical Inc. and Abbott Laboratories' devices, including Angio-Seal, Femoseal and Vado Steerable Sheath, which included Kalila Medical for $1.12 billion. (See Medical Device Daily, Oct. 19, 2016.)
Another large deal, as reported by CDI in December 2015, is a $90 million agreement, with $20 million up front, in which Unilife is developing and supplying wearable injector devices for Amgen Inc., of Thousand Oaks, Calif.
And in December 2015, Boston Scientific Corp., of Marlborough, Mass., acquired San Antonio-based Celonova Biosciences Inc.'s interventional radiology oncology portfolio, including Celonova Embozene Tandem Drug-Elutable Microspheres, Oncozene and Embozene Microspheres, for $70 million.
In January 2014, Microport Scientific, of Shanghai, and Sorin Group SpA, of Milan, formed a joint venture – Microport Sorin – to develop and market cardiac rhythm management devices in China. The $20 million deal included the development and marketing of implantable pacemakers, defibrillators, cardiac resynchronization devices and related devices.
So far, in 2017, CDI indicates that of 25 medical device deals, three each are focused on cancer and wound healing, two on central nervous system disorders and one each for diabetes, infection and spinal or musculoskeletal injury, with the rest focused on a variety of miscellaneous indications. A total of 92 percent – or 23 – of the principal companies involved in the 2017 deals are headquartered in North America.
Only one 2017 deal listed in CDI has disclosed financials. In mid-January, Shandong Yaohua Medical Instrument Corp., of Shandong, China, agreed to distribute Norcross, Ga.-based Guided Therapeutics' Luviva advanced cervical scan device in China, Taiwan, Hong Kong and Macau for $1.49 million, including $490,000 in upfront money.
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