At a conference recently, two VCs met at the break. One said to the other, "I have a new infertility company." The other threw up his hands in a gesture of refusal and said, "I don’t think so." Such has been, historically, the investment community’s reaction to the market for assisted reproductive technologies, despite the fact that infertility affects 10 to 18% of married couples in industrially developed countries, and infertility clinics operate in a $10 billion worldwide market. In the past, there has really been no entry point for start-up companies. Pharmaceutical companies have a small share of the market; a $1.5 billion infertility drug market is dominated by Merck Serono SA (part of Merck KGAA ), Schering-Plough Corp. , Ferring Pharmaceuticals AS , Sanofi Aventis, and Novartis AG . However, few product opportunities have existed on the medtech side, which is largely made up of commodity products like catheters, syringes, Petri dishes, and standard microscopes. As a market, infertility has further suffered in the investment community by its association with women’s health, which has historically not been a hot spot of investing.
Acknowledging the infertility industry’s shadowy past, the first venture capitalist says to the second, "No, really. You should take a look. Things are changing." And they are. There are several...