Diagnostics & Imaging Week Executive Editor
If the first three editions of the annual gathering are accurate indicators, those who attend the fourth annual Medtech Investing Conference in Minneapolis next month will emerge from the two-day meeting with a useful mixture of philosophies and strategies behind investing in medical technology companies.
The conference, presented by International Business Forum (IBF; Massapequa, New York), a nationally known developer of investor-focused conferences, in conjunction with Medical Alley/MNBIO (Minneapolis), a Minnesota-centered association focused on life sciences products and services, will be held at the Radisson Plaza Hotel on May 11-12.
Jeffrey Barnes, a general partner with Oxford Bioscience Partners (Boston), a life science venture capital firm with committed capital of more than $800 million, will be part of a panel discussing "Trends in Investing in Medical Devices and Healthcare Technologies."
He said one of the questions that panel will be addressing is "why many feel that the med-tech sector is very much in favor these days, particularly compared to other areas of life sciences, such as biotechnology."
And, he added, "If this is the case, is it a short-term thing, or will the sector remain in favor for a while?"
Another important area of interest to potential investors in med-tech, Barnes said, is the matter of liquidity. While the initial public offering (IPO) market rebounded for med-tech companies last year, a trend that has continued thus far in 2005, he said that means of exit for investors "has not been particularly receptive to early- and mid-stage companies, only to those with a revenue history."
That leaves M&A [mergers and acquisitions] as a liquidity exit for investors, Barnes said, so the panel at the Medtech Investing Conference will address whether med-tech offers "a sustainable M&A market."
Another area of interest for those focused on investing in healthcare technologies involves commercialization strategies for "late-stage" companies. "Maybe [investors] are not going to be able to exit early," he said, so the question then becomes how they and the companies they back are addressing commercialization of the technologies they are developing.
Commercialization strategies also are on the mind of Paul Buckman, president of St. Jude Medical's (St. Paul, Minnesota) Cardiology Division, who will be on a panel discussing "Strategies for Launching Products Internationally."
One basic question to be addressed, he said, is "whether to commercialize a product in Europe or other international markets when you're an early stage company."
It's not just a matter of taking the easier route to approval that often is the case in such markets, but also of taking into account the higher costs of commercialization for products, particularly in the area of distribution. Buckman said the panel will pose and answer such questions as, "What should you think about when you're making that decision?" and "What is the value proposition in terms of the time and costs required?"
That's especially important, he said, if a company is being developed on the premise of being acquired by a larger player operating in the same sector.
"You need to be confident that you're going to create value for your company," Buckman noted. "It [an international presence for a company's product or products] may not be of value to a strategic acquirer" who already has a distribution presence in those markets.
The story is different, he said, "if the goal is to create a more sustainable business if you're not looking for an early exit."
Other important sessions on the conference agenda includes discussions of funding and building early-stage device companies, transitioning to the commercialization phase, post-marketing clinical trials and utilizing outsourcing to increase return on investment.
One session, featuring panelists from the corporate side of the equation, will focus on managing investments, acquisitions, alliances and partnerships.
A full afternoon track on the second day will deal with reimbursement, emphasizing the swift rise in that subject from "back burner" status to "front of mind" for both entrepreneurs and investors.
As William Harrington, MD, a partner in venture capital firm Three Arch Partners (Portola Valley, California), who chaired a reimbursement panel program, said at last year's conference, "Reimbursement has come from back in the pack to being a very important issue, even in seed-stage and early-stage companies."
He added, "As both entrepreneurs and potential investors, you have to know very early on whether [Medicare] codes exist for products that are envisioned coming out of the company, or at least what the outlook may be for establishment of such codes."
Dubbed the "Device Reimbursement Masterclass," this year's half-day program will range from reimbursement basics to development of reimbursement strategy for new technology. Other sessions will focus on clinical trial reimbursement and the respective roles of the CMS, professional societies and patient advocacy groups.
Another feature of the conference is the Medtech-Connect Company Showcase, in which several emerging firms will make presentations to the venture investors in the audience.
IBF said advance registration for the conference is running 33% ahead of last year's attendance, with 60% of those registrants traveling into Minneapolis from 21 states and four countries.