Medical Device Innovation Landscape in Europe

16 Apr

By Michael Quigley, Director of Research, LSN

mike-2Last week we used the LSN Company Database, which covers over 30,000 life science companies across the globe, to see what kinds of emerging therapeutics assets were being developed in European countries. This week we again utilized the database, this time to take a look at the emerging medical devices coming out of Europe, and we were able to identify over 400 products in development (see Figure 1). These devices all have yet to reach market approval and, as such, can likely indicate where the most innovation is currently taking place.

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Figure 1 | Source: LSN Company Platform, Data as of April 15, 2015

In analyzing the data for the companies that we track, we found that reusable instruments, active implantable devices, and electromechanical medical devices are the most prevalent subsectors of in-development medical devices in Europe. By looking at the same cross section of medical devices in the U.S., we can observe how the innovation landscape compares across the pond (see Figure 2).

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Figure 2 | Source: LSN Company Platform, Data as of April 15, 2015

In the U.S., active implantable devices are the definitive leader by number of products in development; however, the rest of the landscape looks fairly similar to that of Europe. This similarity might indicate a global trend in terms of where the most innovation is occurring in the medical device space. In the coming years, it will be very interesting to see how these charts correlate with the types of medical devices that reach market approval in both of these geographies.

It is also worth noting where in Europe these new devices are being developed (see Figure 3).

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Figure 3 | Source: LSN Company Platform, Data as of April 15, 2015

Just as it led in our European-based therapeutics report last week, the United Kingdom is home to the largest number of in-development devices, although in the medical device space, it appears that there is a more even distribution of early stage technology across Europe than there is in the therapeutics sector. This is likely because the medical device sector is more nimble than therapeutics, which requires more capital, infrastructure, and existing expertise to support development of products. Medical device innovation is not limited to “innovation hubs” where all innovation follows the existing resources. While many local governments in Europe and around the world are pushing to develop themselves into one of these hubs, it takes a significant amount of time and resources to be able to attract and support innovation.

Finally, we can see the types of investors who are interested in early stage medical device development in this part of the world (see Figure 4).

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Figure 4 | Source: LSN Investor Platform, Data as of April 15, 2015

Just as with our previous dissections of investor types, we notice a breadth of different investor classes with interest in this stage, sector, and geography. Venture capital again represents the most significant investor category; however, it is only just over one-third of the total capital pool. This is why it is vital to cast a wide net when fundraising. It not only will increase your odds of getting the capital you need, but also will allow you to hear valuable feedback from various viewpoints regarding your opportunity, ultimately helping you find the most strategically valuable investment partners.

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