New Corporate Deal Models for Medtech Companies


Often continuous internal innovation is expensive and unpredictable for medtech companies, and yet in order to continue to grow their business, they need to introduce important new products.  A panel at 2016 WSGR Medical Device Conference, discussed what large companies are looking for today and how evolving deal structures can benefit both the buyer and the seller.  The panelists discussed this in context of their own stories of deal models.  On the panel moderated by Steve Levin,  were Fred Aslan from Adavium Medical, Hanson Gifford from The Foundry, Bruce Roberts from RM Global Partners, and Thierry Thaure from Cephea Valve Technology.  

Thaure discussed Abbott’s interest in Cephea and how the milestone based deal was struck.  Mitral valve disease is highly complex and requires multiple treatment options.  Abbott’s interest in Cephea emerged from the objective to complement its own portfolio of mitral valve replacement therapies.  Cephea’s catheter based mitral valve replacement therapy seemed to fit in nicely with Abbott’s Mitraclip device, for addressing this huge market opportunity.  Initially, Abbott made an equity investment, holding the option to acquire.

The Foundry built by a group of serial entrepreneurs, do a lot of inventing but additionally also look at other outside opportunities that address dramatic clinical improvement over existing treatment models.  Thus operating as a medical device incubator, The Foundry helps the companies it takes under its wings, with fundraising, recruitment and helps them to rapidly transform their concepts into companies.  Since its inception in 1998, The Foundry has founded and financed nearly a dozen medical device companies which have generated over $2 billion of value.  Ardian came out of the Foundry and was acquired in cash plus commercial milestones based deal by Medtronic.  Foundry’s some of the other successes include Cabochon Aesthetics (acquired by Ulthera), Concentric Medical (acquired by Stryker), Emphasys Medical (sold to Pulmonx), and evalve (acquired by Abbott).

Fred Aslan said while countries like Brazil, China, and India offer huge growth opportunities, navigating those markets to develop sales and marketing is very challenging as these are highly fragmented markets with mom and pop establishments and while companies should work with local distributors, it is also hard to find distributors.  With two recent acquisitions, Advium transformed itself into the largest Brazilian medical equipment and diagnostics company as measured by sales and number of customers across both specialties.  Brazil is one of the most complex and one of the largest healthcare markets in the world, after US and China.  Aligning with the needs of the market, Advium focuses heavily on aesthetics, dermatology, plastics surgery, vascular surgery, and gynecology and on clinical diagnostics.

As a senior partner, Roberts oversees the medtech M&A practice at RM Global Partners LLC, boutique investment banking and strategic advisory firm.    “Every technology we help develop is some form of global technology arbitrage”, said Roberts.  RMG helps increase the value of their clients’ innovation pipeline while helping them account for risk and uncertainty.  Besides financial and strategic advice to its clients, RMG leverages its global network to source and execute transactions to build new opportunities for their clients, worldwide.

PS – Please check out exciting jobs offering opportunities to work with disruptive technologies in JOBS category on this blog or at link http://bit.ly/28J800w & please send leads or resume at wd_darshana at hot mail dot com.

  1. #1 by DR ANTHONY MELVIN CRASTO Ph.D on July 2, 2016 - 8:42 pm

    You write so well Darshana, thanks

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