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EP Vantage Medtech Half-Year Review 2016
The first half of 2016 does not provide the medtech industry with many reasons for optimism.
Some worrying trends seen last year have become even more pronounced: venture capital funding has become ever more concentrated in fewer hands, leaving the majority of companies struggling to raise cash. Meanwhile, the other classic funding route of an initial public offering is now all but shut off after last year’s slowdown.
- M&A dollar decline: Of the deals closed in 2016, only five broke the $1 billion barrier and none were over $10 billion – in contrast, all of the 2015 top 10 were over $1 billion, and four exceed the $10 billion threshold.
- Worrying signs for venture funding & IPOs: Medtech companies raised a total of $670 million from VC rounds in Q2, the lowest quarterly amount since Q1 2009. The number of rounds also plunged to 27 in the most recent quarter.
- Fewer, but faster FDA approvals: The FDA granted either, a first-time premarket approval or a humanitarian device exemption to 38 devices, a 27 percent decline from 2015. However, the FDA is speeding up, with the average review time for the first half of 2016 just 16.2 months compared to 17.3 months in 2015 and 16.7 months in 2014.
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