Outside the Box MedTech Strategy in a Tough Market

For medtech founders, the surest exit option is via acquisition by a large public medical device company.

The largest medtech companies are all getting smaller — strategically. Many are spinning out business units or product lines to become separate publicly traded companies:

GE: entire healthcare business ($18B)

Johnson and Johnson: consumer health ($15B)

3M: entire healthcare business ($8B)

Baxter Scientific: kidney care and acute therapies ($5B)

Medtronic: patient monitoring and respiratory interventions ($2B)

Zimmer Biomet: Spine and Dental businesses ($1B)

The same push to boost stock performance during a market downturn is also limiting interest in growth via acquisition, with companies focusing on expanding revenue from existing product lines.

What are the options for medtech startups in this environment? The conventional wisdom revolves around disciplined finances and max-hustle dealmaking:

The fourth option requires some regulatory finesse and outside-the-box thinking:

4. Commercial expansion in emerging markets. The regulatory barrier for the United States, Europe, and other established markets is high. For companies in the midst of clinical trials or struggling to gain reimbursement, there may not be enough runway to complete all the requried development activities. But outside these geographies, the regulatory barriers are lower and the need for advanced technology is just as high. With appropriate insight into individual regulatory requirements (i.e., country-by-country) and regional health trends, it’s possible to get commercial traction on a much shorter time horizon.

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