Device/Diagnostics Quarterly Deal-Making Statistics, Q4 2017
A look at the financing, M&A and alliance activity in October–December 2017
Device fundraising during the fourth quarter totaled $2.6 billion, making it the strongest quarter of the year. Q4 M&A activity reached $3.9 billion, higher than Q3's $3.4 billion, but still one of the lowest quarters of the year. Both fourth quarter diagnostics financings and M&As hit an all-year low of $622 million, and $2.8 million, respectively.
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The conventional wisdom in the medtech industry is to pursue the “razor-razor blade” business model, as each placement of capital equipment generates a lucrative annuity of recurring revenues from disposables. The corollary to this conventional wisdom is that so-called “big iron” is to be avoided as, in sharp contrast, it suffers from greater early cash requirements and longer sales cycles that create difficulties forecasting quarterly revenues, and provides no annuities. But that view is no longer the only one that counts, Health Advances CEO Mark Speers argues.
Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal activity, the Dealmaking column is a survey of recent health care transactions listed by relevant industry segment – In Vitro Diagnostics, Medical Devices, and Pharmaceuticals – and then categorized by type – Acquisition, Alliance, or Financing. This month’s column covers deals announced February 2020.
Device financing during 2019’s final quarter totaled $1.6bn, a substantial decrease from Q3’s $4.05bn. Merger and acquisition activity, almost doubled from the previous quarter reaching $6.1bn; Stryker’s 4.7bn takeover of Wright Medical was the only billion-dollar transaction. Financings by diagnostics/research players totaled $1.3bn (the lowest quarter of the year) and eight companies were acquired, five of which together were valued at $981m.