New device treatmetns for epilepsy, obesity management on a larger scale.

We present another installment of our quarterly review of dealmaking-for October-December 2006. Our data comes from Windhover's Strategic Transactions Database, which covers deal activity within the pharmaceutical/biotechnology, medical device, and in vitro diagnostics and research industries.

Lack of sleep is bad in its own right, but now the knowledge that obstructive sleep apnea is a risk factor for and even a possible cause of heart disease adds urgency to what the medical community has until recently viewed as a quality of life problem. However, the existing infrastructure for diagnosing and treating OSA can neither handle the current demand nor the expected influx of new patients coming in from the cardiology community. New companies hope to fill gaps in diagnosis and therapy, but they face all the challenges of establishing technological and business approaches in an evolving field, with the need to change practice patterns, educate patients and multiple groups of physicians, and win the buy-in of payers.

A new force of organizing care has begun to emerge designed specifically to restore to physicians the power and influence they've seen drain away. They're called physician practice management (PPM) companies, and they may be the hottest trend in health care. Recently, they've been among Wall St.'s favorite investments over the last couple of years. And they're beginning to attract doctors in large numbers.