Venture Capitalists Show Confidence in Medical Device Sector
I once saw Treasury Secretary Timothy Geithner buying shrimp at a nice fish place in my neighborhood. I wish I’d had the courage to walk over and ask whether he was a bull or a bear when it came to the medical device sector market.
But a new report from The Burrill Report may have answered the question just as well as my friend Tim.
Noting that drug developers shouldn’t be all that pleased by the new data, author Marie Daghlian notes, “medical device and technology developers are seeing a greater interest in their products, demand for which is expected to grow as the global population ages and demands improved quality of life.”
In fact, investment in medical device and technology companies, while still lower than what therapeutics garnered, was up 37% in the first half of 2012, from $1.1 billion in 2011 to $1.5 billion in these most recent figures available.
The medical device industry has been tied up in knots to a degree over looming federal regulation and perceived inconsistencies from FDA inspectors and the agency’s focus. That doesn’t seem to be fazing the money guys, though.
“The increased investment also comes despite worries of increased regulatory scrutiny and reimbursement uncertainty,” Daghlian reports. She cites a survey in late 2011 conducted by the National Venture Capital Association that found nearly 60% percent of venture capitalists expected a decrease in investment in the biopharmaceutical and medical device sectors.
Looks like the VCs may have changed their mind, at least as evidenced by this latest report.
Finally, data compiled by The Burrill Report itself found that funding at all stages for medical device financings that have disclosed the funding stage increased in the first half of 2012, compared to the first half of 2011.
Investors take note: Geithner is a relatively young man, but a lot of those Federal Reserve guys and Capitol Hill types aren’t exactly spring chickens. I’ve seen Former Fed Chair Alan Greenspan at Nationals games a few times this season, and he’s a spry guy for his age, but he’s also a poster adult (as opposed to child) for the growing demand for medical devices among affluent folks who want to remain active for many years to come.
Maybe I’ll bounce this off Tim the next time I see him at our fish place.