The med tech strategic landscape is changing in a big way. Major new players are jumping in with billions to back the latest joint venture, be it for liquid biopsy, bioelectronics or robotic surgery. But even amid all that churn, med tech venture investment and exit scenarios remain largely consistent.
In fact, despite all that strategic interest, venture investment in med tech has pulled back a bit recently, even more sensitive than its biotech brethren to a somewhat volatile stock market.
There’s a wide-open, $1 billion R&D maw from several leading players looking to make major moves. The latest of these is a $700+ million effort from GlaxoSmithKline ($GSK) and Verily, the lead "moonshot" life sciences arm of Google-parent Alphabet, to create bioelectronics: tiny, closed loop devices designed to induce druglike bodily changes at the chemical, molecular level but without the off-target side effects.
This is just the most recent in a series of ambitious efforts from Verily--including a robotic surgery and medical device joint venture with Johnson & Johnson ($JNJ), whose medical device business needs a serious shot in the arm and a partnership with continuous glucose monitor player Dexcom ($DXCM) that is slated to culminate in disposable glucose monitors.
Med tech ambitions may have been tamped down a bit in the wake of the Theranos debacle, in which claims to do accurate diagnostics on a few drops of blood that were widely celebrated in the media have thus far come to nothing, despite recent, very belated efforts by the company to substantiate its tech.
Medical devices and diagnostics startups have always had a tough time making a basic business case, often lacking obvious acquisition appeal for longstanding strategic players that are typically more focused on iterative advancement rather than a leapfrog forward or substantial enough revenue traction to make good IPO candidates.
In addition to aiming for major technological leaps, comparable to some of the tectonic shifts that happen in biotech, med tech also holds the promise to be offer solutions that can offer significant improvements in population health, particularly in developing nations that aren’t committed to the massive infrastructure that define the first world health services infrastructure.
These shifts include technology along the lines of mobile-compatible ultrasound and other imaging equipment as well as remote and artificial intelligence-assisted analysis of diagnostic images. The ubiquity of mobile technology alongside the rapidly increasing capability and decreasing costs associated with digital analyses hold the promise of bringing first-world quality diagnostic imaging and pathology to everyone.
The Fierce 15 is an occasion to celebrate innovation.
The Fierce 15 is an occasion to celebrate innovation. In particular, we want to celebrate efforts that aim to make a major technological shift or that contribute substantially to improvement in human health. Not just any attempts, but specifically those from startups with some evidence or commitment that indicates that they actually might have a shot at success. Those, for example, with a substantial financing from well-regarded investors or a deal with a major, committed strategic partner would be ideal.
We want the startups that think big and are new--but also that look like they just might have the necessary ingredients to succeed.
Please send us your nominations of medical devices and diagnostics startups for the Fierce 15 by the end of September. They must be private companies that have not been previously included on the list. Be prepared to explain what their potential contribution could be--as well as why you think they are ready to succeed.
- here is the nomination form
- and here is last year’s Fierce 15 from FierceMedicalDevices