Market Forces Are Crushing Early-Stage Medical Device Technology Innovation
The hunt for medtech start-up funding is agonizing to watch. Got the medtech product positioning? Check. Identified the medical device market segment? Check. Performed medical device market research and due diligence to be sure that the addressable market is large, and that the product meets the clinical unmet needs in your medical device technology? Check. Are there economic incentives for the healthcare system, and will the hospital administrator buy into the new medtech product economic value proposition? Check.
So, all systems are go, right? Not always. Many medtech entrepreneurs have put their muscle, hearts and souls into innovative medical device new product development and medtech market strategies. After the excruciating battle required to leapfrog the hurdles, gain regulatory approval, and launch their medtech commercialization strategies, they are faced with the most expensive part of the process, just as sometimes cash flow diminishes. The current bar is to show a significant level of revenue, to prove to medical device strategic partners that the product has legs. However, pursuit of that magic number requires resources to pay for the traditional sales and marketing teams—a significant expense in medtech.
Another alternative? Med-Vantage has been helping medtech CEOs commercialize and achieve sales numbers using novel, state-of-the-art strategies that cost less (but still require resources). Depending upon the medical device technology, we look at social media, development of a Center of Excellence model that attracts patients or other strategies. Each medtech startup differs, but strong medical device market research (with a fast turnaround) and our unmatched knowledge of the target market can provide the shot in the arm that a medical device startup needs.
Why This Is Important
Medical device startups are the innovation backbone in our business. A report from AdvaMed executive leadership and Deloitte states the issue plainly: the decline in medtech startup ventures and investor support is real and threatens medtech innovation. Without a bench of medtech M&A opportunities, in the future, large medical device companies will confront challenges in acquiring new technologies to increase and grow. As proof, the report shows that the share of VC investment in medtech companies declined from 13% in 1992 to 4% in 2016.
Medtech Innovation Is at Risk
Even worse, the share of VCs investing in medtech Series A has deteriorated. As a percent of total venture investments, medtech Series A funding dropped from 19% in 2006 to 10% in 2016.
What do we do to Reverse the Curse?
There are many possible solutions for medical device entrepreneurs, and US medtech startup leadership is still undisputed. If the global decline in medtech entrepreneurship continues, we can help medtech startups raise the funds they need to get to a successful exit.
How can we help you?
Let us know using the contact form below. Out most recent three client engagements were for:
- Pricing Strategy (non-conjoint, but we do conjoint also)
- Due Diligence for a possible M&A
- Commercialization strategy for a European client entering the US in 2018