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M&A Slowdown and Drop in FDA Approvals Stifles Growth of Medtech Sector in 2013
Still hope for modest growth, according to EP Vantage's new report, "Medtech 2013 in Review".
LONDON, BOSTON, TOKYO (March 11, 2014) — 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 totalled $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
EP Vantage also took a look at how the pharma and biotech sector closed out 2013, in the “Pharma & Biotech 2013 in Review” report also released today. A full copy of the “EP Vantage Medtech 2013 in Review” report, based on market intelligence and analysis from Evaluate MedTech, can be downloaded at www.evaluategroup.com/MedTech2013inReview. The “Pharma & Biotech 2013 in Review report” can be downloaded at www.evaluategroup.com/PharmaandBiotech2013inReview.
About EP Vantage
Written by a team of award-winning journalists, EP Vantage provides daily financial analysis of key industry catalysts including: regulatory and patent decisions, marketing approvals, licensing deals, and M&A – giving fresh angles and insight to both current and future industry triggers. Launched in 2007 by EvaluatePharma®, EP Vantage’s unique access to EvaluatePharma and EvaluateMedTech data allows unrivalled, forward-looking coverage of the pharmaceutical, biotech and medtech industries. Visit www.epvantage.com to sign up for a free trial. On Twitter: @epvantage .
About Evaluate Ltd.
Evaluate is the trusted source for life science market intelligence and analysis with exclusive consensus forecasts to 2018. We support life science and healthcare companies, financial institutions, consultancies and service providers in their strategic decision-making. Our services include EvaluatePharma, EvaluateClinical Trials and EvaluateMedTech. Our global team of dedicated healthcare analysts employs rigorous methodologies to deliver strategic commercial analysis. We make our services valuable by combining superior quality content, user-friendly reporting tools and outstanding customer service to solve client problems.
For more information visit: www.evaluategroup.com. On Twitter: @evaluatepharma, @evaluatemedtech, @epclinicaltrial, @epvantage.
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