Medtech Venture Capital: The View From Europe

Medical device companies have always faced technological, regulatory, reimbursement and market risk, and a new risk has been recently added to this existing set of challenges: financing risk. Longer product development cycles mean sustained funding requirements, at a time when venture funds are less numerous and smaller, and syndicates have become difficult to assemble. These dynamics have sent many companies scurrying to Europe, in search of a more predictable regulatory environment and alternative sources of funding, according to a panel of European venture capitalists that spoke at the IN3 (Investment In Innovation) medical device conference sponsored by Elsevier Business Intelligence, which was held in Paris in March 2011. We queried the panelists to find out if they're optimistic or pessimistic about medtech investing for the future, what kinds of deals they find attractive now, whether medical device investments still have merits relative to pharmaceutical deals, what advantages Europe might offer to the US as a field of investment, and how companies can survive among a scarcity of funds.

Where device investments once hedged biotech portfolios, because of the relatively short product development cycles relative to drugs, now regulatory and reimbursement risk mean that it can take eight to 10 years for devices to get to the market. Indeed, the FDA process is a major risk factor for medical device investors, not only in terms of uncertainties surrounding 510(k) reform (the regulatory pathway to approval for 90% of devices), but also because of increasing demands around clinical trials that are difficult for small companies to meet.

Regulatory risk is often mentioned as one of the biggest challenges facing companies and their investors today. Many companies in the middle of development have been asked by the FDA to conduct new or longer trials for which they can't gain funding support, stopping them dead in their tracks. This was the case for drug-eluting stent company Xtent Inc

Read the full article – start your free trial today!

Join thousands of industry professionals who rely on Medtech Insight for daily insights

  • Start your 7-day free trial
  • Explore trusted news, analysis, and insights
  • Access comprehensive global coverage
  • Enjoy instant access – no credit card required

More from Europe

Inclusive By Design: UK Invites Sponsors To Submit Trial Diversity Plans

 
• By 

The UK has issued clearer guidance to help drug and medical device sponsors demonstrate how they intend to include a diverse and relevant range of participants in their clinical trials.

Plans For Specific EU Orphan And Pediatric Device Expert Panel Need To Go Further

 

Moves are at last underway for a more specific focus on orphan and pediatric devices. They are a start; but experts are calling for more to support this sector.

MORE Details On MHRA’s Online Platform For Post Market Surveillance

 
• By 

Post-market surveillance regulations for medtech system users in Great Britain coming into force on 16 June will make new data requirements under new compliance deadlines.

23andMe Purchase Will Let Regeneron Scale Drug Development

 

The consumer genomics firm will operate as a subsidiary, while Regeneron plans to leverage its database for drug discovery and trial design efforts.

More from Geography

MORE Details On MHRA’s Online Platform For Post Market Surveillance

 
• By 

Post-market surveillance regulations for medtech system users in Great Britain coming into force on 16 June will make new data requirements under new compliance deadlines.

23andMe Purchase Will Let Regeneron Scale Drug Development

 

The consumer genomics firm will operate as a subsidiary, while Regeneron plans to leverage its database for drug discovery and trial design efforts.

Disparities — Including Financials Shortcomings — Remain In Women’s Health, Execs Say

 

FemTech leaders discussed some of the barriers that remain in unlocking the full potential of the women’s health market during SiS New York last week. They also offered solutions.