Medtech Rocks at the 2012 J.P. Morgan Healthcare Conference

Medtech Rocks at the 2012 J.P. Morgan Healthcare Conference

Maria Shepherd • Data Decision Group

Where do medtech CEOs, the investment community and Wall Street analysts all meet in January every year? In San Francisco, Calif., at the J.P. Morgan Healthcare Conference. Attendance is by invitation only for this premier annual event. The meeting rooms and hallways are jam-packed with chairmen and presidents of Fortune 500 medical device companies rubbing elbows with leaders from small startup innovators in the medical device world.

Medtech isn’t the only industry represented at J.P. Morgan. Biotech, pharma and healthcare IT are other important components of this massive four-day event. In total, there were an estimated 395 presentations from healthcare companies this year.

Why It Is Important?

Investor confidence is critical to medical device industry growth. By industry, medical devices finished 2011 as the fourth-largest industry sector (as defined by total equity investments intoventure-backed companies) from a total of 17 categories, with $2.8 billion invested in 339 deals.^1,2 The life-sciences sector (biotech and medical devices combined) accounted for 27 percent of all venture capital dollars invested in 2011, which remained unchanged from 27 percent in 2010. That’s good news.

Why the J.P. Morgan Conference?

While there are many investment conferences, the J.P. Morgan Healthcare Conference is by far, the largest and most prestigious. This is the only place to see CEOs of the largest medical device companies presenting their five-year business strategies (or lack thereof), while also getting a look at the newest and hottest startup technologies in development.

If the company is publicly traded, has annual sales over $1 billion, and wants to keep its stock price high, then the CEO must present strategy and tactics that address changes in U.S. regulatory policy, emerging markets in the growing markets of India and China as well as other developing nations, the complexity of selling in the European Union and much more, all in approximately 25 minutes. For example, in his presentation at J.P. Morgan, Medtronic Inc.’s CEO, Omar Ishrak, reiterated his belief that there are approximately 200,000 to 300,000 people in India’s middle class who could afford many of his company’s existing technologies.” His goal is to help build the healthcare infrastructure around those patients, which could lead to millions more. (For more on his comments about global growth and emerging markets, see the Datawatch column in the January/February issue of MPO.)

If a startup company has new, disruptive technology that has proven clinical or economic performance (with data to back up claims) and wishes to be acquired or issue another round of financing, J.P. Morgan is the place to be.

It’s All About the Investing

The growth engine for our industry is the startup company and investor confidence is its lifeblood. New, highly disruptive products for minimally invasive techniques and emerging markets are growth drivers. Persistent issues from 2008-2011 are expected to continue, but an acquisition hungry industry needs startups and must prove that they have the ability to overcome industry obstacles.

References:

1. www.masshightech.com/stories/2012/01/16/daily41-Study-Venture-investment-rose-22-in-2011.html

2. www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=industry

Editor’s note: Readers are invited to submit market data and trend questions to Maria Shepherd. Periodically, selected questions will be presented in this column, with answers from Maria. Send your questions to the email in her bio (below).

Maria Shepherd, founder of Data Decision Group, has 20 years of leadership experience in medical device and life-sciences marketing in small startups and top-tier companies. Her firm quantitatively and qualitatively sizes opportunities, evaluates new technologies, and assesses prospective acquisitions for medtech companies. Shepherd recently was appointed to the board of the MSBiV Medtech Investment Committee. She can be reached at (617) 548-9892 and online at [email protected] or www.ddecisiongroup.com.