Artificial discs are experiencing a cooling trend owing to an expected reduction in CMS reimbursement for both cervical and lumbar disc replacement. Many motion preservation companies are reaching critical regulatory milestones that will likely require a step-up in funding to conduct the large scale clinical studies needed to gain PMA approval. Today, companies in this sector are faced with the troubling task of either scaling back R&D programs to conserve cash or raising additional capital to take the next steps.

The first quarter of 2008 saw a dearth in financings for both the medical device and in vitro diagnostics segments. In the former, volume fell short of the billion dollar mark while the latter failed to reach the success the previous quarter had witnessed, despite completing an equal number of transactions. M&A in medical devices didn't look any more promising, bringing in $1.6 billion, a huge slide from the impressive $10 billion total of 2007's fourth quarter. However, there was one bright spot: acquisitions within in vitro diagnostics/research reagents substantially increased to $3.1 billion from the $370 million spent in the previous three months, led by Inverness Medical Innovations' $1.1 billion takeover of Matria Healthcare Inc. Also noteworthy: oncology diagnostics alliances grew slowly and steadily thanks to increasing attention from larger companies.

Brief summaries of recent medtech market and industry developments. This month we cover secondary buyers as an exit strategy for Boston Scientific and others; a review of medtech dealmaking in the first quarter of 2008, and US markets for patient monitoring products.

Artificial discs are experiencing a cooling trend owing to an expected reduction in CMS reimbursement for both cervical and lumbar disc replacement. Many motion preservation companies are reaching critical regulatory milestones that will likely require a step-up in funding to conduct the large scale clinical studies needed to gain PMA approval. Today, companies in this sector are faced with the troubling task of either scaling back R&D programs to conserve cash or raising additional capital to take the next steps. This article first appeared in the June 2008 issue of In Vivo.