Investors love to remind everyone that IPOs are financing events, not exiting events, using the mantra to put off Judgment Day for their investments. So how have device companies fared after the recent spate of IPOs?

Despite orthopedic surgeons' conservative reputation when it comes to new technology adoption, high-tech devices are increasingly finding a place in this field. There have been recent developments in robotic computer-assisted surgery and other high-tech enabling tools that could lead to wider acceptance of these devices by surgeons better known in the past for eschewing such "frills." Although there are exceptions, most manufacturers seeking success in this market appear to have learned from the mistakes of the past, and many, instead of offering technology for technology's sake, are now trying to provide surgeons with what they really want - products that offer a value-added benefit to their practice.

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.

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.