After dropping markedly for two consecutive years, both the number of acquisitions in medical devices and the total dollar volume of those deals jumped significantly in 2003, according to information from Windhover Information's Strategic Transactions Database of industry transactions.

In this issue, we present another installment of our quarterly review of dealmaking-for October-December 2003. Our data comes from Windhover's Strategic Transactions Database, which covers deal activity within the pharmaceutical/biotechnology, medical device, and in vitro diagnostics industries.

Zimmer's acquisition of Implex Corp. for slightly greater than $100 million is, in some respects, the natural culmination of a standing alliance between the two companies. But it's also interesting for the way in which it seems to embrace all of orthopedics' hot spots. Building on Implex's innovative Hedrocel biomaterial, Zimmer has already developed hip, knee, and shoulder implants, as well as trauma products, out of the collaboration, and has announced that seven development projects are underway. At the same time, this is also clearly a spine play: Implex had developed a line of spine products out of its material, which have already begun to be implanted in Europe and the US, and Zimmer said in announcing the deal that it intends to expand that spine business by incorporating it into Zimmer's own spine division.

Device start-ups are still rare in Europe. But now a combination of factors--new venture money, more receptive public markets, and a new generation of entrepreneurs--is making device company creation less exotic.