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Medical Device Financings: The World Isn't Flat, After All

This article was originally published in Start Up

Executive Summary

Anecdotal evidence demonstrates that, at least for certain medical device companies and selected investors, the financing climate is getting better, as up rounds occur with greater frequency.

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Three Arch Sticks to its Knitting

Three Arch Partners recently raised $400 million in less than a month's time, creating probably the largest pool of venture capital dedicated to medical devices. The fund came together quickly, through existing limited partners. Three Arch told existing investors that it planned to do exactly what has made it successful in the past: focus on medical devices with a smattering of selected services, dedicating a majority of the fund-perhaps 70%--to early stage investments. For investors who have been with Three Arch through its past funds, that works.

Abbott's ‘Bedrock Of Good Health’ Nutritionals Business Faces Mounting Infant Formula Litigation

Nutritional product business had 5.1% Q1 sales growth and is like Abbott’s other segments, “super well-aligned to the global demographics and trends in health care,” says CEO Ford. But as it defends complaints of damages from powder formulas made at facility found with unsafe levels of bacterial contaminants, Abbott’s also targeted in litigation alleging failure to warn about risk of infants born prematurely developing necrotizing enterocolitis if fed cow’s milk-based formula.

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