Highlights from the Q2 2008 review of device and diagnostics dealmaking: financing for medical device firms was down 9% from the first quarter to $838mm, which consisted mainly of late-stage venture rounds at 43% of the total. Big Pharma was surprisingly active in device acquisitions, with Novartis buying 25% of surgical instruments maker Alcon, and BMS selling off ConvaTec to private equity as part of its "string of pearls" strategy to focus on biotech. Two FOPOs dominated the $300mm financing the IVD/Research industry, while Invitrogen's $6.4bn stock swap for Applera's Applied Biosystems represented 90% of the M&A dollar volume.

Each month, Start-Up presents a comprehensive review of young, private life science companies that have received venture funding during the month, including companies in the pharmaceutical, medical device, diagnostic and research instrumentation & reagent sectors.

Hospital-based diagnostics are a tough sell to VCs, partly because big companies dominate the central lab. The area of infectious disease is even more challenging because low-cost culture methods are difficult to displace and novel high-value biomarker content is rare. MRSA screening may be one area where the right factors are coming together to form an opportunity. In some other cases, the same attributes that make rapid tests appealing outside the hospital could help bring them inside.

In Vivo briefly summarizes the technologies of these recently founded companies: Genetics Squared, IL Therapeutics, Innovative Biosensors, NanoVir, NeuroMEDx and Sirtris Pharmaceuticals.