By Max Klietmann, VP of Research, LSN
The cardiovascular device space is currently undergoing a major shift. Two major trends, the growth of renal denervation and the decline of cardiac rhythm management (CRM) devices will be central themes in the device space in 2013. In this article we will touch on both of these trends and what it means to emerging medtechs and investors in the space.
Renal denervation refers to a class of therapeutic devices targeting drug-resistant hypertension by ablating renal artery nerves. Essentially, the concept is to decrease blood pressure by widening the renal arteries. Every major medical device firm in the field is developing a product in this area, and many of them are buying up emerging medtechs to enter this space. Emerging medtechs that are able to show significant competitive advantage to large strategic investors are poised to become highly attractive targets.
However, all of the hype over renal denervation technology and its multi-billion-dollar market potential is quite obvious when we look at the CRM space. CRM – which basically refers to pacemakers and the like, used to be a primary source of reliable cashflow for major industry players. However, the space has become overcrowded, innovation isn’t there to create the incremental demand required to drive sales, and investors are pushing companies to move into the next big thing. So what does it mean for small medtechs in the space? The key is differentiation. A decline in investment means a decline in future competition, so finding a strategic partner with whom you can develop a differentiated product is a key to success.
Overall, investors and emerging medtechs should be wary of these two trends, and realize the potential to succeed that offer. Times of change are times of opportunity, so those who see where the space is moving will be the winners.
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