A business development panel representing the emerging group of mid-sized device dealmakers that are actively looking for innovative technology from small companies discusses the current state of medtech dealmaking.

The sale of American Medical Systems to private equity investor Warburg Pincus started the company on a new path. Long successful in male-focused markets like erectile dysfunction, part of the new direction for AMS entailed a new management team and a reinvigorated product development effort. But in AMS's case, the development effort was focused not on the company's core business, but in a related area, products to treat female uro-genital problems. Though similar in some respects, the urology and gynecology markets are more notable for their striking differences. AMS's male-oriented lines are market development-driven, aimed at educating and attracting customers among men reluctant to seek care; gynecology is more about product development, getting new therapies into the hands of patients eager to use them.

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.

Incontinence represents a significant unmet medical need for 20 million Americans that suffer from urge incontinence, and 13 million sufferers of stress incontinence. The market is large, growing, and approachable for small device companies--if they can get funding, that is.