July 31, 2014 by Arezu Sarvestani
Medical device startups face significant headwinds in finding funding and getting to an exit, but at least prospective buyers are a little more willing to gamble on companies that haven’t yet made it through the FDA.
In 2013 a few medtech companies managed “big exit M&A” deals (those worth $50 million or more) without having reached the FDA’s brass ring, according to a new report from Silicon Valley Bank.
More than 70% of all medtech big exits since 2009 have been FDA-approved, but the most active buyers in the space aren’t such sticklers for the regulatory nod.
“The common perception is that companies need to have FDA-approved product and be at the commercialization stage before they can attract an acquirer,” according to the report. “Since 2009, the top 3 device acquirers (Boston Scientific (NYSE:BSX), Medtronic (NYSE:MDT) and C.R. Bard (NYSE:BCR)) have acquired FDA-approved companies nearly 50% of the time. The rest of their transactions were split between CE Mark (32%) and development-stage (21%).”