Trend and distribution in clinical/technology focus of medtech startups

MedMarket Diligence has been tracking the formation of medtech startups for over a dozen years. For the sake of definition (since not everyone has the same view of “medtech” or “startup”), we view “medtech startups” as: Medtech companies are those principally developing and/or marketing medical devices and equipment, but also all technologies that are directly competitive with or complementary to technologies represented by therapeutic or diagnostic medical devices/equipment. Startups are companies typically founded within the two preceding years and often much sooner (months or weeks preceding).

Below is illustrated the clinical/technology distribution of medtech startups identified by MedMarket Diligence and included in the Medtech Startups Database:

startups-summary-may-2013

Note: Medtech startups may be categorized multiple ways (e.g., surgery and minimally invasive and spine).

Source: Medtech Startups Database.

The number of companies identified over time is illustrated below, with detail on the clinical and technology categories of each, with the overall shape of the curve reflecting both our ramp-up in the process of identifying companies and the rate of companies being formed (note, given the number of categories tracked, it is best to simply observe the overall distribution rather than the detail on specific categories, and for this reason the above graph shows the numbers by descending order of categories):

startups-summary-category-year-may-2013

Note: Medtech startups may be categorized multiple ways (e.g., surgery and minimally invasive and spine).

Source: Medtech Startups Database.

The decline in numbers of startups subsequent to 2007 reflects the global recession and its harsh impact on the availability of capital to support new company formation.

Medtech fundings for May 2013

Fundings for medtech companies in May 2013 came in at $703 million. Top fundings for the month were:

  • $175 million for Ophthotech Corp. (treatment for wet AMD)
  • $78 million for Tornier, N.V. (joint replacement and soft tissue repair)
  • $62.5 million for Proteus Digital Health (wearable and ingestible sensors)
  • $54.6 million for Natera (prenatal diagnostics)
  • $40.3 million for Rockwell Medical (products for ESRD and chronic kidney disease)
  • $38.23 million for Silk Road Medical (endovascular treatment of neurovascular disease)
  • $35.17 million for Emisphere Technologies (drug delivery technologies for large molecule oral delivery)
  • $24.9 million for Cardio3 BioSciences (regenerative therapies for damaged myocardium)
  • $22.24 million (€17 million) for STAT-Diagnostica (rapid, comprehensive diagnostic device)
  • $20 million for BPL Medical Technologies (defibrillators other patient management/monitoring)

The complete list of medtech fundings for May 2013 are detailed at link.

See below for the trend in fundings from 2009 through 2013 thus far (with trendline).

Fundings-2009-May-2013

Source: Compiled by MedMarket Diligence, LLC (see detail at link)

 

Opportunities, drivers and growth platforms in medtech

horizon_00364590The medical technology industry is characterized by its steady focus on finding and developing innovative solutions on the horizon that will meet the demands of clinicians and healthcare systems to more rapidly and effectively solve problems in the management of disease and trauma.

Given the state of the art in healthcare regarding the performance of current and potential medical technologies, there are a number of key opportunities in medtech that are driven by specific forces and are likely to be solved by one or more high value platform technologies.  These opportunities, drivers and high value platforms are listed below.

The biggest opportunities in medtech:

  • Non-toxic, high strength closure and sealing of internal wounds (GI, pulmonary, cardio, etc.)
  • Closed-loop “artificial pancreas” comprising integrated glucometer and insulin pump
  • Versatile chronic wound management to accelerate healing of multiple chronic wound types
  • Non-invasive blood glucose testing (infrared, interstitial fluid or other approach)
  • Non-invasive large molecule drug delivery (transdermal, inhaled, encapsulated, etc.)
  • Interventional surgery (catheter or natural orifice) instrumentation
  • Infection control for nosocomial vectors
  • Organ replacement and transplant (preservation, bridge-to-transplant, etc.)

Drivers

  • Untreated or underserved, growing patient population
  • Cost containment
  • Eliminating lost productivity
  • Less invasiveness for lower cost, faster healing
  • Point-of-care (home, physician office, bedside) diagnostics for comprehensive screening and detection
  • Increasing demands for devices to be specific, be clinically effective and have small or non-existent long-term footprint

High Value Platform Technologies

  • Materials technologies incorporating one or more features of biocompatibility, adaptation, cell migration, drug elution, resorption, excretion or other easy removal
  • Adult, embryonic and other pluripotent stem cells
  • Gene therapy emerging from recent innovations (e.g., type 1 diabetes)
  • Interventional surgical technologies
  • Multi-parameter (MRI, CT, ultrasound, etc.) intraoperative imaging
  • Laparoscopic and natural orifice transluminal endoscopic surgery
  • Nanotechnology drug delivery, surface modification
  • Integration/fusion of information technologies with implants

We have identified these opportunities, drivers and platforms from research in a wide range of medtech markets, considering the state of the art in clinical practice, products/technologies on or nearing entry to the market, clinician and healthcare system perspectives, and the  current/forecast sales data for products in surgery, cardiology, spine/orthopedics, cell/tissue therapy, obesity, wound management, others.

See MedMarket Diligence Reports.

 

 

Technologies at recently identified medtech startups

Below is the list of technologies under development by medtech startups that were recently identified and included in the Medtech Startups Database.

  • Laser-based detection of metastatic cancer cells.
  • Ultrasound therapeutics.
  • Detection of concussion.
  • Orthopaedic implants.
  • Spine surgery implants including interspinous process spacers.
  • Technologies in ophthalmology.
  • Surgical implants including for hernia repair.
  • Stomal management solutions.
  • Ophthalmic drug delivery.
  • Device for the treatment of fecal impaction.
  • Developing low level light therapy for a variety of medical applications.
  • Device to prevent wound infections.
  • Targeted delivery of fluids including drugs and contrast media.
  • Implants for orthopedics, spine and trauma.
  • Various medical devices, including a device to assist laparoscopic surgery and pain management device.
  • Intraoperative nerve monitoring.
  • Treatment of peripheral artery disease.
  • Surgical instrumentation.
  • Minimally invasive device to treat collapsed nasal valves.
  • Minimally invasive treatment for venous reflux disease.

For a comprehensive listing of the technologies added to the Medtech Startups Database, see link.

Advanced wound technologies penetrating, expanding markets

Advanced medical technologies gain footing in medical technology markets by a combination of displacing caseload previously served by older, established technologies, and tapping into previously unserved (or underserved) caseload by offering new product benefits. In other words, new technologies gain sales by both penetrating existing markets and actually expanding the current market.

The global wound care market is characterized by such a shift toward advanced technologies, where the overall gain in sales of new technologies is accounted for by both the displacement of traditional product sales and the added caseload of patients previously untreated or under-treated.

Below is illustrated the shift in share of the total market arising from each of the multiple different wound management technologies. Growth in the market (and resulting decline of traditional technologies) is arising from growth factors, bio-engineered skin & skin substitutes, as well as growth in some older but still advancing technologies driving growth in foam and alginate dressings.

adv-wound-share

Source: Report #S249, “Worldwide Wound Management, 2012-2021.”

High growth spine surgery markets worldwide

Growth of sales for medical technologies can be determined almost as much by geography as by whether the market is emerging or displacing existing competitive technologies.  For this reason, we review spine surgery markets globally considering the growth of specific spine surgery technologies in specific countries.

Clearly, the geographic markets that are, in general, demonstrating the most rapid adoption of new medical technologies will show even higher rates of adoption of the newest medical technologies than in other geographies.

Case in point, the spine surgery technologies demonstrating the highest growth geographically are among the newest medical technologies being introduced in rapidly growing economies:

growth-country-segments

Source: MedMarket Diligence, LLC; Report #M520, “Worldwide Spine Surgery: Products, Technologies, Markets and Opportunities 2010-2020.”

Requirements for effective surgical sealants

Tourniquet, pressure and sutures have been used for controlling excessive bleeding during surgical procedures for many hundreds of years. Fibrin sealants represented a revolution in local hemostatic measures for both bleeding and nonbleeding disorders. Fibrin sealant has the potential to provide life-saving control of excessive bleeding in many critical surgical operations and during a number of elective procedures. The terms “sealant” and “glue” are frequently used interchangeably in the surgical context, but there is actually a difference in adhesive strength between sealants, pioneered by fibrin products (sometimes homemade) and the later, stronger glues of which cyanoacrylate-based products were the leaders.

In order for a sealant to be effective, the product should meet several parameters, depending upon the application. Among these are:

  • Ability to close the wound
  • Strength of bond
  • Speed of curing
  • Protection of the wound from infection
  • Low surface friction
  • Breathability in order to aid healing
  • Lack of adverse side effects to skin and internal tissues
  • Cost-effectiveness
  • Ease of handling

Fibrin and other sealant products have been approved and used outside the United States for many years and their use has created strong awareness of their surgical and economic benefits in Europe, Latin America and Asia. As a result, many such products have been marketed in these regions for 20 years or more, and have been developed for a variety of surgical uses. In the U.S., these products were initially approved as hemostatic adjuncts to suturing. They are increasingly being used for sealing of tissues, but their use beyond hemostasis (i.e., as sealants and low-strength glues) lags that of markets outside the U.S.

There are more than 30 companies worldwide developing fibrin sealants and driving a market that will exceed $2.2 billion by 2017.

sealants-regional-forecast

 Source: MedMarket Diligence, LLC; Report #S190.

For complete analysis of the global market for fibrin sealants, see the MedMarket Diligence Report #S190, “Worldwide Surgical Sealants, Glues, Wound Closure and Anti-Adhesion Markets, 2010-2017.”