Radiation oncology is a very attractive market indeed. It's a $3 billion-plus capital equipment market predicted to experience a compound annual growth rate of 10 to 15% in the next several years, with the image-guided segment expected to grow at a 35% rate. Approximately 30% of the market is up for grabs over the next three years, as institutions replace old and obsolete equipment. Can small company TomoTherapy sustain the lead it has gained with a new image-guided system that increases the precision of cancer targeting and spares normal tissues, once entrenched multi-billion dollar radiation oncology companies begin to offer aggressive competition?

Building a new product market is never easy, and the chances for a start-up in capital equipment are especially slim. Accuray has the scars to prove it. But after a long haul, it appears to be succeeding in building a market in radiosurgery.

EnteroMedics recently earned the distinction of closing the second-largest financing for a private medical device company in 2006. Its success was undoubtedly due to the company's attractive position at the junction of two of the device industry's hottest markets: obesity and neuromodulation. EnteroMedics is developing an implantable impulse generator that it hopes will address multiple mechanisms in obesity.