Flurry of Med Device IPO Activity on the Heels of the J.P. Morgan Healthcare Conference 2014

Life science investing in 2014: VC investment to gain momentum

Kara Reed

Jan 24, 2014

Private Investors will continue to take advantage of investment opportunity. 

As FDA shows signs of reform. IPO boom will continue in the biotech sector but drift to  Medical Device sector as the regulatory and revenue   seems to be more predictable

After sitting on the sidelines many VCs are jumping back. JP Morgan saw a very enthusiastic investor sentiment. 

It was the best in a decade said Mr David Pyott at a CHI biomedical /PWC report meeting in Newport Beach, Ca. Among the attendees were Mr David Gallager, CEO of CHI, Peter Claude of PWC, HJ Paik of PWC, Terence Green from Childrens Hospital, Dennis Drislane from Belhealth Investment Partners, Paul Stein from Onciomed, Inc.

JPMorgan meeting was all about "will the Biotech IPO boom continue" Answer is "Yes with a twist"

The IPO boom is going to continue with a twist that now more medical device companies will be part of the IPO boom.

It is fairly easy to predict the time for a medical device approval than a biotech said one expert. Moreover, there are new therapuetic areas that have not been touched like diabetes, Obesity, sleep apnea and womens health. Morgan Lewis reception saw over 500 attendees and the conversations were very positive. 2014 will see companies getting funded, VCs raising more capital, VC taking more risks, Med devices going public. This trend has already started in Israel and Australia and slowly steaming up in US.

This year JPM saw over 10,000 attendees in and around the Union Square in San Francisco. California life science sector is very heavy on devices and biotech. California needs more incentives and attention from Gov Brown or these companies are being solicited by out of state government incentives to move operations to take the company and innovation out the state or even out of the country. Several companies have moved operations to Boston for better tax incentives,  property gain, more state government funding and grants to assist with R&D. 

China story has weakened as US life science sector is booming. More private investors are jumping in before the VCs correct their mistakes and reinvest in the early stage companies. 

"The ROIs are going to be back like good old days" said an investment expert attending Morgan Lewis cocktail reception at JPM. "Early stage companies tackling unmet needs like diabetes or obesity may make 20-30X if they invest in the right company and right technology. Large companies are waiting to enter this space and the appetite for a medical device in this space is growing. There is going to be a frenzy to buy companies in this Diabesity sector. Investor timing is everything".  he said

 Amgen had a large presence at the JW Marriott. Trout group had several activities at the JPM and their reception was well attended. 

Soffinova venture saw a large crowd for their reception. Hilton Hotel lobby was full of entrepreneurs and investors form around the world. The St Francis hotel lobby was full as usual and saw deals happening in the lobby even press was present at the Hilton to cover some private deals. 

Investors from China, India, Brazil and Australia were engaged in investing in early stage medical device companies at a special event hosted by medtech group at the Marriott on Market St.

Posted by Karen Reed

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