Taking off the blinders: Medtech or Med Device Investment?

Tracking venture capital investment, if not on the whole by some geography, demands that it be viewed in discrete groupings, such as by technology type. The purpose is, of course, to see the trend, but the underlying assumption is that. from time point A to time point B, the grouping itself has not changed, irrespective of the amount of investment.

Why do I bring this up? Well, let’s take a topic like “medical devices”. While there may be some minor debate as to what constitutes a medical device (does it include diagnostic devices?), the majority of people understand what medical devices are.

But what about medical technology–medtech? Is this the same as medical device? Absolutely not. When is medtech not a medical device? How about when it is a polymer-based or biological extracellular matrix for orthopedic applications designed to induce cell growth? How about the fully bioabsorbable cardiac stent? How about liposome-encapsulated drugs? How about drug-eluting stents (considering the cost and value are contributed by both the stent and the drug)? How about topical dressings? Collagen dressings? Cultured skin grafts?

From the standpoint of analyzing markets and market opportunities, it is foolhardy to consider a market to be defined by a very specific technology rather than competing applications. For example, angioplasty, stenting, robotic cardiac surgery, percutaneous CABG and even cholesterol-lowering drugs all compete in the same “market” (treatment of coronary ischemia), regardless of technology.

For the same reason, I do not put much stock (so to speak) in analyzing investment solely in “medical devices”. My interest is investment in medtech. Of course, I am indeed interested in investment in medical devices, but only as the most significant component of medtech.

So, when I see reviews (I’m going to pass on specific references, but google for yourself) of 2013 medical device investment, particularly those that point to a decline, I cannot but help point out that such reviews are myopic, considering less than the whole. What I track is the broader medtech, and for 2013 there was a distinct 13% increase in 2013 medtech investment over 2012 medtech investment.

medtech_2009-2013

 

See for yourself and note that, going back to 2009, we have the data on each investment in these monthly totals.

Medtech fundings for January 2014

Fundings for medical technology in January 2014 to date stand at $497 million, led by the $50.56 million funding of NeoTract. Below is a list of the month’s top fundings thus far:

Company funding Product/technology
NeoTract, Inc., has raised $50.56 million of a planned $56.7 million round of funding according to a regulatory filing Minimally invasive treatment for benign prostatic hypertrophy
Ivantis, Inc., has raised $46.5 million in funding according to the company Device-based and other treatments for glaucoma
AqueSys, Inc., has raised $43.6 million in a Series D round of funding according to the company Gel stent for treatment of glaucoma
Humacyte, Inc., has raised $37.26 million in a round of funding according to a regulatory filing Tissue-based vascular grafts and other regenerative medicine products
Suneva Medical, Inc., has raised $35 million in funding according to press reports Aesthetics products
Vital Therapies, Inc., has raised $31.98 million in a round of funding according to a regulatory filing Bioartifical liver replacement
Entellus Medical, Inc., has secured $25 million in credit according to a regulatory filing Minimally invasive treatment for sinusitis

For the complete list of medtech fundings during January 2014, check back during the month at link.

For a full list of the fundings in medtech since 2010, see link.

Global market for surgical sealants, glues, hemostats and anti-adhesion

Potential for the Use of Hemostats, Sealants, Glues and Adhesion Prevention Products, Worldwide

This report details the complete range of sealants & glues technologies used in traumatic, surgical and other wound closure, including tapes, sutures/staples/mechanical closure, hemostats, fibrin sealants/glues and medical adhesives and anti-adhesion products. The report details current clinical and technology developments, with data on products in development (detailing market status) and on the market; market size and forecast; competitor market shares; competitor profiles; and market opportunity. The report provides full year actual data from 2011. The report provides a worldwide forecast to 2017 of the markets for these technologies, with emphasis on the market impact of new technologies through the forecast period. The report provides specific forecasts and shares of the worldwide market by segment for Americas (detail for U.S., Rest of North America and Latin America), Europe (detail for United Kingdom, German, France, Italy, Spain, Rest of Europe), Asia/Pacific (detail for Japan, Korea, Rest of Asia/Pacific) and Rest of World. The report provides background data on the surgical, disease and traumatic wound patient populations targeted by current technologies and those under development, and the current clinical practices in the management of these patients, including the dynamics among the various clinical specialties or subspecialties vying for patient population and facilitating or limiting the growth of technologies. The report establish the current worldwide market size for major technology segments as a baseline for and projecting growth in the market through 2017. The report assesses and projects the composition of the market as technologies gain or lose relative market performance over this period. The report profiles 122 active companies in this industry, providing data on their current products, current market position and products under development.

See description, table of contents and list of exhibits at http://mediligence.com/rpt/rpt-s190.htm Published February 2012..

Technologies at recently identified medtech startups

Below is a list of the technologies under development by medical technology startups identified in December 2013 and added to the Medtech Startups Database.

  • Haptic device used in rehabilitation following stroke or neurological injury.
  • Mesh fixation device for soft tissue procedures.
  • Bioimplants are made of bioactive plastic with fibres and they can be used in bone tissue engineering.
  • Biodegradable sealants and adhesives in surgery.
  • Orthopedic implants.
  • Developing a device that mimics the actions of gastric bypass surgery for the treatment of obesity and Type 2 diabetes.

For comprehensive listing of technologies under development at medtech startups, see link.

Plastic Surgery Utilization Worldwide

The popularity of plastic surgery — whether for aesthetic or reconstructive procedures — is growing worldwide, driving the development and sale of a wide range of medical products.

The highest utilization of plastic surgery worldwide is in China, followed closely by India. Yes, of course, this is purely population-driven, with the #1 and #2 countries by population having the highest absolute volume of plastic surgery procedures. But, on a relative basis, compensating for those countries’ huge populations, the highest per capita utilization of plastic surgery is…anyone? Anyone? Buehler?

The highest per capita utilization of plastic surgery is actually in South Korea, followed by Greece, followed by Italy, followed by the U.S. Below is tabulated the plastic surgery procedure volumes (medical or surgical) by country for the top 25 countries:

Plastic Surgery Procedures by Country, 2011

Screen Shot 2013-12-18 at 11.31.14 AM

Source: MedMarket Diligence, LLC; Report #S710.

Medical technology company fundings, December 2013

Fundings for medical technology in December 2013 came in at $351 million, led by the $61 million funding of Zyga Technology. Below is a list of the month’s top fundings:

Company funding Product/technology
Zyga Technology, Inc., has raised $60.73 million of a planned $63.73 million round of funding according to a regulatory filing Endoscopic surgery instrumentation
ViewRay, Inc., has raised $30 million in a round of funding according to the company MR-guided radiotherapy
XLumena, Inc., has raised $25 million in a Series C round of funding according to the company Stent and delivery device
Baxano Surgical, Inc., has raised $22 million in a round of funding according to press reports Minimally invasive spine surgical devices for the treatment of stenosis
Angel Medical Systems, Inc., has raised $21 million in a round of funding according to a regulatory filing Cardiac implant to detect ischemia resulting from vulnerable plaque rupture

For the complete list of medtech fundings that took place during December 2013, see link.

For a full list of the fundings in medtech since 2010, see link.

Technologies at Recently Identified Medtech Startups

Below is a list of technologies under development at companies identified in November 2013 and included in the Medtech Startups Database:

  • Vascular drill to cross chronic total obstructions (CTOs) and facilitate balloon angioplasty and stenting.
  • Custom orthopedic device manufacturer
  • Non-invasive, migraine therapy device
  • Ultrasound-based brain noninvasive physiology measurement of cerebral blood flow and intracranial volumetric wave monitoring.
  • Transcranial magnetic stimulation
  • Device for the management of urinary incontinence.
  • Device to alert diabetics of nocturnal hypoglycemia.
  • Fusion and non-fusion technologies in spine surgery
  • Spine surgical technologies including pedicle screws.
  • Neuromodulation for the treatment of a variety of diseases.
  • 3D, biomaterial-based scaffold for tissue engineering
  • Inflatable retractor for use in laparoscopy.
  • ePTFE valve for right ventricular outflow tract reconstruction
  • Drug delivery devices
  • Hemosstatic technology for moderate to severe bleeding.
  • Developing treatments to prevent intimal hyperplasia and associated vascular access failure in renal dialysis.
  • Sleep apnea treatment device
  • Retinal implants

For a detailed listing of past technologies identified at medtech startups, see link.

Aesthetic and Reconstructive Markets

Aesthetic and reconstructive medicine, encompassing medical and surgical procedures and physician-administered products, is a dynamic area as a result of the overlap of medically reimbursed therapeutic procedures and out-of-pocket, cosmetic or purely aesthetic procedures. While there is a difference financially between the two areas of medicine, the medical and surgical procedures, as well as products, find overlapping benefits that blur the differences clinically. Physicians and medical product manufacturers have developed approaches to address post-traumatic or post-disease reconstruction that have demonstrated clear aesthetic benefits even in the absence of trauma or disease (in other words, more purely cosmetic).

Below is the distribution of product revenues in aesthetic and reconstructive medicine as the balance will change between from 2013 to 2018.

aesthetics-growth-segments

*Neuromodulators in aesthetic/reconstructive applications include Botox, Dysport, Xeomin, etc.

Source: MedMarket Diligence, LLC; Report #S710, “Global Markets for Aesthetic and Reconstructive Medicine, 2013-2018.”

The U.S. market continues to represent the biggest contributor to the global market for these products, as illustrated below.

aesthetics-regionals

Source: MedMarket Diligence, LLC; Report #S710, “Global Markets for Aesthetic and Reconstructive Medicine, 2013-2018.”

Medtech Fundings for November 2013

Fundings for medical technology in November 2013 totaled $472 million, led by the $120 million IPO by Tandem Diabetes. Below is a list of the month’s top fundings:

Company funding Product/technology
Tandem Diabetes, Inc., has raised $120 million in an initial public offering according to the company Insulin pump, glucose monitoring and other diabetes products
Direct Flow Medical, Inc., has raised $50 million in a private round of funding from PDL BioPharma according to press reports Transcatheter aortic valve system used to treat aortic stenosis
TriVascular, Inc., has raised $40 million in a Series E round of funding according to the company Minimally invasive technologies for treatment of endovascular aneurysm
Solta Medical, Inc., has raised $40 million in a round of funding according to the company Medical aesthetics devices and other products
Palmaz Scientific has raised $26.31 million of a planned $30 million round of funding according to a regulatory filing Advanced metallurgical nanotechnologies for use in implants in neurology and orthopedics
Pixium Vision has raised €15 million ($20.27 million) in a Series A round of funding according to the company Retinal implants
Sensible Medical Innovations Ltd. has raised $20 million in a private funding from Boston Scientific Corporation according to the company Thoracic fluid status monitor

For the complete list of medtech fundings during November 2013, see link.

Technologies at Recently Identified Medtech Startups

Below is a list of the technologies under development at companies recently identified and included in the Medtech Startups Database:

  • Systems for minimally invasive knee implants.
  • Innovative prosthetic socket devices for amputees and technologies for limb salvage surgery.
  • Devices for interventional treatment of cardiovascular disease.
  • System and method for localizing medical instruments during cardiovascular medical procedures.
  • Hemostat/sealant
  • Surgical instrumentation in gynecology.
  • Percutaneous mitral valve repair.
  • Drug delivery for diabetes and pain management.
  • Non-invasive blood glucose monitor.
  • Thermographic mapping system for temperature monitoring during energy-based surgical procedures.
  • Device to reduce sternal bleeding associated with cardiac surgery.
  • Lightweight and low cost ($299) 12-lead diagnostic ECG device.

For a history of the companies identified at startups in the database, see link.