Healthcare device acquisitions trending upward, financial expert says

April 12, 2013 in Medical Technology

The latest trend in the healthcare industry is that big players – from Covidien to Medtronic to Boston Scientific – are increasingly acquisitive when it comes to new medical device technologies, both on the treatment and the diagnostic front, according to Paul Teitelbaum, managing director with Chicago-based Mesirow Financial’s Investment Banking Practice.

“We saw a number of the large cap medical device companies making a number of acquisitions last year, and we certainly expect that to continue,” says Teitelbaum.

He adds that the market seems to be showing particular interest in a new device used to treat hypertension through denervation, in a single treatment.

“We have seen over the last few years the development of new medical devices that can treat and potentially cure a disease in one shot – or several treatments – so that a patient doesn’t have to take drugs for the rest of their life,” he says.

[See also: Healthcare IT merger, acquisition deals see upward trend in 2012.]

What usually drives spikes in acquisitions is the discovery of new technology–discovery and development and the hunger on the part of large medical device companies to either develop new or acquire new technology to continue their growth trends,” Teitelbaum says.

According to Teitelbaum, some areas of the medical device market have begun to flatten out, including for those for stents and orthopedic large joint medical devices, where there have been problems with increased market competition and quality control.

“Everyone’s looking for the next new big blockbuster,” he says.

[See also: MA can be hazardous to health IT.]

According to Teitelbaum, other hot areas for health IT include apps, where the industry is seeing a rapid increase in their numbers, varieties and uses. “It’s a big crowded area,” he says, “but it’s mainly private pay, for now.”

Some employers are starting to use healthcare apps to incentivize their employees to take better care of themselves, and thus reduce healthcare costs, Teitelbaum says. However, before apps can truly take off, they need to have a reimbursement mechanism. “There are a lot of questions that remain in terms of reimbursement and FDA regulations,” he says.

Mergers and acquisitions are also hot in areas of the market involving ACO development, population health management, clinical decision support, data warehousing and patient engagement, he adds.

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