Despite orthopedic surgeons' conservative reputation when it comes to new technology adoption, high-tech devices are increasingly finding a place in this field. There have been recent developments in robotic computer-assisted surgery and other high-tech enabling tools that could lead to wider acceptance of these devices by surgeons better known in the past for eschewing such "frills." Although there are exceptions, most manufacturers seeking success in this market appear to have learned from the mistakes of the past, and many, instead of offering technology for technology's sake, are now trying to provide surgeons with what they really want - products that offer a value-added benefit to their practice.

Investors love to remind everyone that IPOs are financing events, not exiting events, using the mantra to put off Judgment Day for their investments. So how have device companies fared after the recent spate of IPOs?

Aging baby boomers spell good news for the $11 billion total joint replacement industry. The bad news is the economic burden this highly active population, the major recipients of joint replacement surgeries, will place on the nation's health care system. With the number of TJR procedures expected to soar in the coming years, it's no surprise that CMS is focused on reducing the costs of TJR procedures. And that's bad news for the orthopedic surgeons who perform them.

Looking back on 2007 through the lens of acquisition activity reveals a lot about the current dynamics in the medtech industry. According to Windhover's Strategic Transactions Database, many of the 80 medical devices companies that were acquired last year came from the perennially hot orthopedics and cardiovascular markets. But in 2007, buyers found their targets in clinical areas that are starting to heat up: patient monitoring, in vitro diagnostics, minimally invasive surgery, and women's health. The acquirers themselves were a mixed bag--for a change, traditional buyers didn't make up the largest share. In fact, those billion dollar plus companies were as likely to divest as to acquire in 2007.