Deals in lieu of medtech financing

Recent data from VentureSource (we noted in our post on the medtech impact) show the decline in venture capital financing in 3Q 2009.

There is, of course, a natural outcome that can be expected when there are well established medtech businesses with existing product lines (and cash flows) but seeking growth, while there simultaneously exist early stage companies with developing product lines with promising growth but in need of cash to do so. One need not be Nostradamus to recognize that deal-making would be that outcome.

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In WSJ today, sourcing Dealogic, it was noted that 30% of all U.S. mergers so far in 2009 were in healthcare, compared to a typical 10%. (See some big acquisitions in a relatively recent list. See also our prediction of this back in March, 2009, in Medtech market competitor consolidation on the rise).

While one might surmise that the true result of the recession, even for the healthcare industry, is that it shifts the ownership of intellectual property to those big players with the economic fortitude to weather the recession, one cannot help but also think that there is intellectual property and market value that will be lost, not only in those startups that don't get acquired, but also in some significant share of those acquisitions that are somehow not quite able to fully actualize the ideas of the startups’ founders.

Posted via email from medmarket's posterous

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