Avoiding the Public Spotlight 2012: Medtech firms remained hesitant to relinquish their privacy la

Avoiding the Public Spotlight
2012: Medtech firms remained hesitant to relinquish their privacy last year. Only four medical device and diagnostic companies completed initial public offerings (IPOs), one more than the total for 2011 but half the number that went public in 2010, according to data from global professional services firm Ernst & Young. Despite the increase, the foursome—Globus Medical Inc. ($100 million), GenMark Diagnostics Inc. ($45 million), Osprey Medical Inc. ($20.8 million) and MRI Interventions Inc. ($6 million)—pulled in 11.4 percent fewer dollars than the trio in 2011 ($171.8 million compared with $194 million) and 68 percent less than the eight firms that completed $539 million worth of IPOs in 2010. Biotech firms fared just as poorly—the number of U.S. IPOs remained flat at 16, but the total amount raised fell 21.6 percent to $1.4 billion, statistics from international financial services establishment Burrill & Company indicate. Globally, biotech companies raised $2.1 billion through 37 IPOs, a 44.1 percent drop compared with the $3.8 billion raised through 45 offerings in 2011. Industry analysts attribute last year’s scarcity of IPOs to regulatory uncertainties and healthcare reform. “It’s an uncertain time, on a macro level,” Terry McGuire, co-founder and general partner at Polaris Venture Partners, said in published reports. “We’re still seeing how healthcare reform is going to play out and once…we get into a more certain world, I think that’ll help everybody.”

2013: The industry’s past track record doesn’t bode well for a banner year in IPOs. History may repeat itself if investors remain skittish, though device and diagnostics executives are noticing some “cautious optimism” among stakeholders. Burrill & Company CEO G. Steven Burrill shares that sanguinity, having predicted a 56.2 percent surge in life sciences IPOs this year due to increased public market activity, improved outlooks about pricing, and the JOBS Act, a measure passed by Congress last spring that encourages small business and startup funding by easing federal regulations and allowing people to become investors. “Though 2013 may get off to a choppy start…we expect a year of strong performance for the [life sciences] sector,” Burrill said.