Recent trends in medtech financing

Money flowing into medtech is the most pragmatic metric I can use to consider the perceived upside of medical technology companies.  Therefore, I routinely look at SEC Form D financings and any published precursors (press reports, company announcements, etc.) to determine who is receiving funding and, potentially therefore, whose technologies are primed to make an impact in medtech markets.

Routine review of such financings has revealed a fairly seasonal pattern, with a peak mid-year in the amount of funds flowing into medtech.  I am  certainly interested in recent developments and specific fundings that reflect validation of new technology/product ideas, but I am also inevitably  interested in long term trends as capital markets may appear to be rebounding from economic downturns or otherwise reflect renewed optimism in emerging medtech ideas.  Looking at medtech markets from the narrow view, considering this month’s or last month’s investments, one has only a general sense of market trends.

Source: Compiled by MedMarket Diligence, LLC

Taking a longer term view, by minimizing month-to-month variation though the use of 4-month rolling average (a 3-month rolling average didn’t adequately minimize the spiking effects of individual financings), it becomes clear that (1) 2011 appeared to reflect a resurgence in financing after a couple years of bad economics and (2) mid-year 2012 is likely to be very telling in indicating the pattern for the rest of 2012 (and beyond).

Source: Compiled by MedMarket Diligence, LLC

Fundings in June 2012 are already at good levels, but whether this will result in a stellar or average month is yet to be seen.

Of course, money flowing into medtech helps reveal new companies, new entrepreneurs, new ideas, and new technology solutions that have succeeded, at least, in gaining the respect of funding source(s).