An Overview of medical device investing

Venture capitalists are always on the lookout for good business opportunity and medical device investing is one such area

. The global medical devices industry with annual sales in 2209 surpassing USD 220 billion and is quite huge, innovative and highly competitive. Of this, US alone occupy 41% of the share.

Medical device like ultrasound machine, stents for clogged arteries have seen a bumpy ride due to the economic slowdown. Over several quarters, the healthcare industries have been one of the main focuses of the venture capitalists across the globe. Looking back at years 2004-2009, there has been a rise in the investments in medical devices, although there have been rough patches in the industry too.

Like any other industry, this too has positive and negative sides. The 510(k) reform seeks additional information regarding efficiency and safety of the medical devices. However, there is section in this reform that, if implemented, will make the whole process more tiresome, prolonged and intricate. Healthcare IT has got a boost with stimulus package by the Obama administration. The pricing still remains an issue that needs to be addressed, but with gradual increase in the economic outlook, this too will be taken care of. Companies with wide range of products will bounce back with decent returns.

One of the major drawback remains the longer duration required to get a useful product, tried and tested, to be launched in the market. Another is the high risk factor associated with the industry. However, this is being dealt with more structured deals being sketched out for the industry to limit their investment money just in case of any product failure.

Even though, the venture capitalists have shied away from making long commitments in the economic downturns, medical device industry still are a promising sector with an upswing in the economic indicators.

An Overview of medical device investing

By: Arunkumar

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