Report: Medtech M&A exits don’t hinge on FDA approval

July 31, 2014 by Arezu Sarvestani

Medical device startups face significant headwinds in finding funding and getting to an exit, but at least prospective buyers are a little more willing to gamble on companies that haven’t yet made it through the FDA.

The funding environment for medical device startups isn’t a pretty scene, but there is a ray of sunshine through the gloom: lack of FDA approval is no longer a deal-breaker for a big exit.

In 2013 a few medtech companies managed “big exit M&A” deals (those worth $50 million or more) without having reached the FDA’s brass ring, according to a new report from Silicon Valley Bank.

More than 70% of all medtech big exits since 2009 have been FDA-approved, but the most active buyers in the space aren’t such sticklers for the regulatory nod.

“The common perception is that companies need to have FDA-approved product and be at the commercialization stage before they can attract an acquirer,” according to the report. “Since 2009, the top 3 device acquirers (Boston Scientific (NYSE:BSX), Medtronic (NYSE:MDT) and C.R. Bard (NYSE:BCR)) have acquired FDA-approved companies nearly 50% of the time. The rest of their transactions were split between CE Mark (32%) and development-stage (21%).”


Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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