Saturday, January 4, 2014

Medical Device IPOs are the next big thing in 2014-2017


Medical Device IPOs are the next big thing in the Life Science IPO boom.
The investment community is done with the FBs, Twitter and Linkedin social media IPOs. They are now moving to technologies that are the life and blood of the next generation. The healthcare, life-science companies. In the 2011 -2013 saw a huge boom in Biotech sector. This boom stemmed from the lack of funding from Venture community for the biotech sector, some investment banking firms saw this as an fiscal opportunity and found a way to take these emerging biotech companies public, one after another biotech companies have been on the IPO route, valuations have been crazy and the investor enthusiasm is at its peak.
Now, the investment banks have found even better sector in the life science space "Medical Device" the story is the same, VCs slowed the funding on the sector, giving investment banks and opportunity to learn about this gold mine. Medical devices are the fastest to market when compared to pharma or biotech sector.
The key about the medical device sector is its use, most of this product is single use, implantable or use and throw away type of device. The longest path for commercialization is in the US due to FDA. But, the FDA is accelerating its process and has had record number of approvals in the last 2 years.
The opportunity for an investors in this sector is to get in and out quickly. These companies get acquired for up to a Billion dollars. Typically, a medical device exit on a decent technology is up to $800Million.
This new trend of Medical Device IPOs is a slap in the face of venture capitalist and now most of them are abandoning the IT and social media sector and coming back to invest in med device and life sciences.
Is it too late for the VCs..cannot comment on that..Also, VC group do not like the idea of medical devices being snatched from them just like the biotech. So, you will see many VCs trying to discourage the investment community to get into Med device IPOs.
Hong Kong, Germany, Australia, Taiwan, India are all seeing medical device companies wanting to go public.
New generation of investors are looking at technologies in the following sectors. eg: Diabetes, Obesity, infection control, Orthopedics/Spine, sleep, Psychiatric conditions (depression).

New Medical Device IPOs : Tandem Diabetes’ positive experience with the IPO market was different than another device world IPO.
Arundhati Parmar one of the Senior Editors for MDDI and one of the most seasoned editors  in the medical device space wrote recently that: " a few more successful IPOs in the next several months, 2014 might bode well device industry IPOs".  Please see her article: http://www.mddionline.com/article/does-tandem-diabetes-%20cares-successful-ipo-mean-device-ipo-drought-over
Australia has seen a array of successful medical device IPOs eg: is GiDynamic

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