Tuesday, August 20, 2013

Medical Device Firms and Its Challenges

As the medical device industry faces some significant market threats these days, like slow-growing market and strong regulatory system, it became necessary to be vigilant for signs and understand when changes are needed. Executives should pay attention to at least four signs that indicate that their companies need to adapt. Frost & Sullivan's Venkat Rajan, principal analyst, who leads the firm's analysis of the medical device sector, discusses what those are.
The first sign is “Utter Lack of Product Differentiation” which means that customers see medical device products as commodities and it leads to customers’ indifference to the product. The second sign is “Profit Model Under Pressure”, this means that the profit margin declines year by year and to assure its market presence companies are facing significant internal cost-cutting. The third sign is “Market Disruptors on the Horizon”, this sign has to do with fast technology development which means that a product becomes obsolete quickly and, sometimes, its substitute proves to be better, faster and cheaper. Finally, the fourth sign is “Internal Infrastructure Deteriorating”, this means that the company’s workforce usually is slow to adapt or innovate and its strategy normally is focused on maintaining its market presence instead of expansion.

Monday, August 5, 2013

Healthcare Industry Continues to Impress

Startups of the healthcare sector in USA attracted $1.81 billion from venture capitalists in the second quarter of 2013. Medical device startups represented 38% of the deals and 35% of the dollars invested. This according to the Q2 Venture Capital Activity Report issued by CB Insights, a venture capital database.
Although money invested by venture capitalists into startups declined 14% when compared to the same period last year, the number of deals remained the same. Total investments represented 24% increase over the first quarter when the money invested reached $1.47 billion.
California was the investments main destination (43% of the $1.81 billion invested in the sector and 41% of the deals), followed by Massachusetts (20% of the money invested in the sector and 15% of the number of deals).
The healthcare IPO (Initial Public Offer) market also impressed: 11 of the 22 IPOs in the second quarter of 2013 were of healthcare companies.