Navigation Links
Global Medtech Industry Holds Steady Amidst Recession

WASHINGTON, Oct. 13 /PRNewswire/ -- Revenues for the US and European medical technology industry grew 11% in 2008 despite the global recession. Revenue growth flattened out in the first half of 2009 and the industry will face significant challenges as it seeks to maintain long-term momentum, including a stubborn funding drought for early-stage companies and a changing global regulatory and reimbursement environment. These and other findings are highlighted in Pulse of the industry: medical technology report 2009, Ernst & Young's annual report on the industry's performance, released today from AdvaMed 2009, the medtech conference.

"While the medtech industry has not been immune to the effects of the global economic crisis, it has fared better than most industries and the fundamental drivers for long-term growth in the sector remain intact," said Scott Sarazen, Markets Leader, Ernst & Young's Global Life Sciences Center. "We expect that the industry's long-term prospects will be bolstered by fundamental trends, including an aging global population, an expanded pool of patients in both emerging markets and traditional geographic strongholds, and new product innovations."

Key industry findings described in the report include:

  • Financial performance. Revenues for publicly traded medtech companies in the US and Europe grew 11% in 2008 to US$289 billion, driven by a combination of organic growth, acquisitions and favorable exchange-rate related gains of US companies. Revenues through the first half of 2009 have remained flat compared to the same period in 2008. Net income decreased by 11% in 2008 to US$11.4 billion, primarily because of special charges associated with major acquisitions and asset impairments at a few large companies. Absent these expenses, global net income would have increased instead of falling.
  • Financing. Capital raised by US and European companies in 2008 totaled US$9.2 billion, a 38% decline from the previous year. This trend has continued into the first half of 2009, with the amount of financing raised in this period down 59% from the same period in 2008.
  • Venture capital (VC). While medtech public financing was down sharply in 2008, venture capital flowing to the sector held relatively steady. In the US, total VC funding reached US$3.6 billion in 2008, 10% shy of the US$4 billion record set in 2007. European medtechs received US$772 million in VC financing in 2008, a decrease of 20% as compared to 2007. For the first six months of 2009, VC investment in the sector for both the US and Europe totaled US$1.6 billion -- a decrease of 38% from the comparable period in the prior year.
  • IPO performance. The US medtech industry has not had an IPO since the first quarter of 2008, the longest dry spell since 2003. In Europe, there were only two IPOs in 2008.
  • Deal space. The total value of mergers and acquisitions (M&As) in the industry in 2008 was US$41 billion, a 33% decline compared to 2007. Through the first half of 2009, only 44 deals with an aggregate value of US$6.7 billion have been announced.

New challenges loom

The Pulse of the industry report also identifies emerging challenges that could create new sources of opportunity and uncertainty for companies and investors:

A changing reimbursement environment: Healthcare reform in the US --the world's largest healthcare market -- and elsewhere could have a profound impact on the global medtech industry. It is likely that reimbursement for devices will change significantly in the years ahead, as payors adopt some form of comparative effectiveness in making reimbursement decisions.

Product approval uncertainty: The US Food and Drug Administration (FDA) is currently considering restricting the types of medtech products eligible for 510(k) marketing clearance, which requires that a product be substantially equivalent to a device cleared by the FDA or marketed before 1976. Changes to the approval process could increase the time and expense of bringing new products to market.

Medtech business model under strain: Financial and regulatory developments are placing increased strain on the traditional medtech emerging company business model, which is based on a streamlined regulatory pathway that allows for rapid innovation cycles and relatively quick exits for investors. In addition to potentially longer product approval timelines and increased reimbursement uncertainty, reduced levels of capital across the global financial markets will result in less capital invested in medtech and likely a drop off in M&A exits in the sector. This will create new challenges for companies to fund their innovation and provide adequate returns for their investors.

"While the industry faces financing and other challenges, it has successfully used its ingenuity to overcome similar issues in the past," remarked Heinrich Christen, Ernst & Young's Medtech Leader for Europe, Middle East, India and Africa. "Within this challenging environment, companies will need to be nimble and creative in tackling a host of challenges simultaneously, including: using capital more efficiently, adapting business strategies for a changing regulatory environment, finding new methods to demonstrate product value, and embracing innovation in their business models as much as they do with their products."

About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 144,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

For more information, please visit

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limed, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

This news release has been issued by EYGM Limited, a member of the global Ernst & Young organization that also does not provide any services to clients.

SOURCE Ernst & Young

SOURCE Ernst & Young
Copyright©2009 PR Newswire.
All rights reserved

Related medicine news :

1. Corbett Selected to Host the Only Midwest Global Awards Judging Competition
2. Tata Consultancy Services to Support Roches Global Capacity Building Initiative
3. Creative Technology Services Enhances its Global Competitiveness with Additional Regulatory Certifications
4. Briefing on a new Web resource to address global drinking water crisis
5. MDS Pharma Services Wins Award for Management of Global Malaria Trial
6. Neusoft Becomes First Global Growth Company Partner of World Economic Forum
7. Resonant Medical Appoints New Vice President of Global Sales
8. Transcept Pharmaceuticals, Inc. to Present at UBS 2007 Global Life Sciences Conference
9. The era of global aging: GSAs annual meeting to present new research on hot topics in aging
10. MEDEX Global Group & Harvard Medical International Join Forces to Create the Most Comprehensive Health Information Resource for International Travelers
11. Ultrasonix Adds Global Medical Imaging Into Its North American Sales Force
Post Your Comments:
(Date:11/27/2015)... ... November 27, 2015 , ... ... well-respected Microsoft Dynamics SL User Group (MSDSLUG). Recognized as Microsoft’s official group for ... of Microsoft Dynamics SL software users, partners, industry experts and representatives. Intellitec Solutions’ ...
(Date:11/27/2015)... ... , ... CBD College is proud to announce that on November ... to its Diagnostic Medical Sonography program. CBD College is honored to join this very ... and universities in the state of California make the cut. CBD College is officially ...
(Date:11/27/2015)... (PRWEB) , ... November 27, 2015 , ... ... contact center software Q-Suite, announces the incorporation of Asterisk 11 LTS (Long Term ... fully supported Asterisk 11 LTS brings Q-Suite 5.10 up-to-date with a version of ...
(Date:11/26/2015)... Ashburn, VA (PRWEB) , ... November 26, 2015 ... ... Planners, an American Express Travel Representative. As a franchise owner, Somu now offers ... range of cruise, destination wedding packages, private cruise sales, as well as, cabin ...
(Date:11/26/2015)... ... November 26, 2015 , ... WorldCare International, ... in the 61st annual Employee Benefits Conference. The Employee Benefits Conference was hosted ... 8th through Wednesday, November 11th, 2015. The conference was held at the Hawaii ...
Breaking Medicine News(10 mins):
(Date:11/25/2015)... , Nov. 25, 2015  Amgen (NASDAQ: AMGN ... Application (BLA) with the United States ... 501, a biosimilar candidate to Humira ® (adalimumab). ... application submitted to the FDA and represents Amgen,s first ... Sean E. Harper , M.D., executive vice president of ...
(Date:11/25/2015)... Nov. 25, 2015 AAIPharma Services Corp./Cambridge ... of at least $15.8  Million to expand its ... NC . The expansion will provide additional ... the growing demands of the pharmaceutical and biotechnology ... expansion will provide up to 40,000 square feet ...
(Date:11/25/2015)... N.Y. , Nov. 25, 2015  Henry Schein, ... and services to office-based dental, medical and animal health ... (GNYDM) Meeting the Henry Schein ConnectDental® Pavilion , ... broadest array of open solutions designed to help any ... Click here for a schedule of experts ...
Breaking Medicine Technology: