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<\/p>\nIn every type of financing, from IPOs and follow-on public offerings to private placements and venture capital rounds, the med-tech industry produced more money and completed more financings in 2018 than the prior year, reflecting the same significant jump in activity seen with its biopharma counterpart.<\/p>\n
What is different, however, is that med tech experienced a 38.43 percent increase in amount raised year-over-year, whereas biopharma showed a 29.64 percent increase. The gap suggests that while investors saw opportunity in both sectors, more gravitated toward what they may perceive as the less risky med-tech industry, due partly to biopharma’s pricing debacle, regulatory uncertainties and its expensive development timeline. (See Figure 1.)<\/p>\n
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Figure 1. <\/strong>Money raised totals show both med tech and biopharma drew greater investment year-over-year. Source: <\/strong>BioWorld MedTech<\/em><\/a>.<\/span><\/p>\n <\/p>\n BioWorld MedTech<\/em><\/a> logged a total of 484 financings raising $20.56 billion in 2018 vs. a total of 393 financings bringing in $14.85 billion in 2017. Just the sheer number of financings is a 23 percent leap over the prior year. The 2018 figures do not include Siemens Healthineers AG’s $5.2 billion IPO, and the 2017 figures do not include Becton, Dickinson and Co.’s $4.5 billion registered direct offering.<\/p>\n When looking at each of the different types of med-tech financings, 2018 showed a consistent improvement over 2017: $2.3 billion vs. $709 million for IPOs; $5.7 billion vs. $4.7 billion for follow-ons; $5 billion vs. $3 billion for private placements and other private financings of public companies; and $7.5 billion vs. $6.45 billion for venture capital and other private company financings. The number of financings also increased in every area, going from 14 to 18 IPOs, 44 to 63 follow-ons, 85 to 110 public\/other investments, and 250 to 293 private company financings.<\/p>\n <\/p>\n Analysts say they believe the interest in med-tech financings will continue into 2019.<\/p>\n “Despite the recent market turmoil, we believe that med tech remains an attractive destination for investors,” wrote RBC Capital Markets’ analyst Glenn Navarro, citing that “mature end-markets are stable with regard to volumes and pricing, and newer markets are gaining scale and maintaining growth,” while there is high demand for innovation and while companies deploy capital “on tuck-in acquisitions, augmenting capabilities” and “mitigating integration risk inherent in large transactions.”<\/p>\n According to a report by Silicon Valley Bank (SVB), medical device investment grew 40 percent in 2018, showing a similar increase in financings tracked by BioWorld MedTech<\/em><\/a>.<\/p>\n For this year, “device investments are expected to be stable with additional growth in series A,” wrote the SVB team, led by managing director Jonathan Norris. “A strong performing group of later-stage, venture-backed companies shows promise for up to eight device IPO opportunities in 2019.”<\/p>\n Indeed, an analysis of BioWorld MedTech<\/em><\/a> financings indicated that a total of 260 medical device companies raised nearly $13 billion, about 63 percent of the total money raised in 2018. Diagnostic companies, the next highest, accounted for about 18 percent of the total amount raised with $3.7 billion.<\/p>\n <\/p>\n A strong performing group of later-stage, venture-backed companies shows promise for up to eight [medical] device IPO opportunities in 2019.\u201d The SVB team also expects more med-tech mergers and acquisitions in 2019: “Tech acquirers will likely scoop up a few [diagnostic] tests and tools and analytics companies, which could spur an uptick in M&A deal value.”<\/p>\n <\/p>\n When looking at the various therapy areas, oncology and orthopedics made up the largest portion of med-tech companies receiving financing in 2018, raising $3.6 billion and $3.2 billion, respectively. Another $7.2 billion went to companies working on technologies that do not specify a particular therapeutic area or that encompass all therapeutic areas.<\/p>\n Behind oncology and orthopedics, about $1.8 billion was raised for companies working on diabetes, obesity or gastroenterology indications, and another $1.7 billion went toward companies working on products for either the aesthetics, obstetrics or ophthalmics space. While companies working on cardiovascular products had the most financings for a specific therapeutic area with 65 total, the amount raised fell at about $1.2 billion, short of the $1.26 billion that neurological and mental health companies raised through 40 financings. (See Figure 2.)<\/p>\n <\/p>\n <\/p>\n For more information about <\/em>BioWorld MedTech and to learn how you can subscribe today, visit: <\/em>Clarivate.com\/products\/bioworld-medtech<\/a>.<\/p>\nConsistent improvement over 2017<\/h3>\n
Device investment up, more M&As in 2019<\/h3>\n
\n – Silicon Valley Bank <\/span><\/p><\/blockquote>\nOncology, orthopedics draw most money<\/h3>\n
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\n Figure 2.<\/strong> Cardiovascular had the highest number while oncology and orthopedics raised the most money among 2018 med-tech financings where an individual therapeutic area was clearly identified. Source:<\/strong> BioWorld MedTech<\/a>.<\/span><\/p>\n