Despite a miserable economy, new company formation continues apace. In biotech, recapitalizations and structured deals featured prominently; in diagnostics, interest remains strong even if rounds in 2008 were down from last year's highs; in devices, small and regional VCs have filled the void left by brand-name investors.

Highlights from the Q3 2008 review of device and diagnostics dealmaking: Led by late-stage rounds, financing for medical device firms--at just over $1bn--showed a slight improvement over the last quarter. IPOs and follow-ons were noticeably absent in Q3, reminiscent of a time in 2003 when the IPO window closed. Not even one of the 13 device M&A transactions reached the billion-dollar mark, but the largest deal, GE Healthcare's buy of Vital Signs for $990mm, came close. In vitro diagnostics/research financings doubled to $643mm led by Illumina's $343mm FOPO. M&A activity in this industry was scant with a mere three transactions. However, Nanogen's reverse merger with Elitech Group--worth $99mm-beat the median M&A deal price ($60mm) over the past five years. Interestingly many in vitro diagnostics players turned to alliances with tech transfer entities in hopes of filling their pipelines.

Start-Up analyzes fundraising and alliances among emerging companies in the biopharmaceutical, medical device and in vitro diagnostics segments from July through September 2008. Data comes from FDC-Windhover's Strategic Transactions Database.

In this issue, we present another installment of our quarterly review of medical device and in vitro diagnostics/research dealmaking-for July-September 2007. Our data are derived from Windhover's Strategic Transactions Database.