Wednesday, June 13, 2007

Record VC dough for device makers

The New York Times on Monday drew attention to the boatload of cash that venture capitalists are bestowing on medical device companies lately. Seed investment in the sector, according to the National Venture Capital Association, is up 60% from last year to $1.1 billion. Says the Times:

These investments in recent years have financed a range of technologies, including devices designed to unclog arteries, rebuild heart valves, monitor body functions from within, limit chronic pain and spinal problems and treat sleep dysfunction, acid reflux, epilepsy and diabetes. “The venture-capital-backed boom in medical devices has delivered extraordinary new technologies,” said David Cassak, an editor at In Vivo, a monthly publication for the medical-device field. “There’s virtually no sector of medical devices that hasn’t been given a tremendous boost.”

The emphasis there is clearly our own. But we hope to add David and his device-focused colleagues to our blog roster soon to bring you more regular medical device industry analysis.

For now, it's back to the NYT: the paper points out that investors wary of high tech as well as biopharmaceuticals, for the perceived high risks that each of those fields represents for the earliest of investors, can find a happy middle ground in medical devices.

But it remains to be seen if the boost in VC investment for device companies will last. Sure medical technologies tend to be more intuitive, ostensibly less risky investments than biotech, but they remain cyclical nonetheless.

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