As biopharma investments stumble, med tech surges

VOICEOVER: The Bioworld Insider podcast.

Lynn: This is the Bioworld Insider podcast. I’m Lynn Yoffee, Bioworld’s publisher. While the first quarter of this new year is just wrapping up and the numbers are not yet tallied, there is very encouraging news for medtech investors. The numbers this year are better than last year’s, which in turn are better than those in 23. Medtech companies secured $2.76 billion by financing 56 transactions in January alone. European investors looking for capital are finding the fundraising environment more favorable in 25 than last year.

Private medtech financings in January totaled about $2 billion, more than double than 2024. And an increasing number of U.S.-based investors are looking to deploy capital in Europe. However, with a trend toward investing in later stage companies, there’s still uncertainty over funding for early stage companies. Today on the show, we have Bioworld MedTech editor Annette Boyle, who is here to talk about these positive numbers and what it may mean for the rest of the year.

Welcome, Annette.

Annette: Thanks, Lynn.

Lynn: She’s here today to chat with Lee Landenberger, a Bioworld staff writer and the Bioworld Insider podcast host. Over to you, Lee.

Lee: Thank you, Lynn. And it’s always great to have someone from MedTech, from Bioworld MedTech, to join us today. Annette, thank you very much for being here. There’s probably a lot of relief in medtech investing going on right now, given these numbers that we’re seeing and the ones that Lynn just mentioned. You’re seeing it in our reporting, Annette. Can you tell me what’s driving the increased cash availability for medtech companies?

Annette: Yeah, Lee, thanks for having me. I’d say there are three main factors that have really warmed up the market for medtechs. First, many of the big strategic players came into the year with lots of dry powder and that enabled an explosive start to 2025. And that included Johnson & Johnson, Abbott, Stryker, Boston Scientific and GE Healthcare, among others. All of them saw substantial increases on their cash on hand at the end of last year and were in a really strong position for acquisitions or investment. Second, lower interest rates are definitely helping, as they always do. 2025 has also been unique in the significant policy changes associated with the new U.S. administration. And that’s had a pretty significant impact on medtech, mostly for the better. There’s been less concern about regulatory issues around medtech consolidation, combined with a more fraught pharma environment, particularly with cuts at the NIH and FDA. For investors in life sciences, that makes medtech that much more appealing.

Lee: So, can you give me an idea about how the IPO market may have changed for medtech?

Annette: Well, it’s changed in virtually all dimensions. If you look at size and number, we’re at nearly a billion dollars raised in IPOs from eight companies so far in 2025. That’s more than was raised in the last two years combined. There was $619 million from 12 companies in 2024 and just $110 million from five companies in 2023. So, a huge difference from what we’ve seen in the last two years. And on track even to be 2022, which was a pretty solid year, that had $3.8 billion in IPOs from 16 companies. So we’ve absolutely turned a corner. And it looks like this will be the best year we’ve had since 2021, which was outstanding. We also are seeing quite a lot more international reach. There’s a diverse geography that we’re seeing in the companies that are making IPOs. So far this year, there have been two U.S. companies, two European companies and four from APAC, China, Taiwan, Singapore and South Korea. That continues a trend that we saw starting last year, where there were two Chinese companies, three Australians, two Korean and five from the US. That’s notable really because of the huge shift it represents from 2022, when 75% of the IPOs were Chinese and 2023, when 60% of them are.

So, what we’re seeing here is a lift across the globe. Europe and the U.S. are doing much better, but just everybody is now in a position where they’re able to get money. And that’s got to be great for the whole medtech industry. More of those international companies, interestingly enough, are choosing to go public on U.S. exchanges.

So this year, for instance, Anbio, a German company, Basel Medical from Singapore, Advanced Biomed from Taiwan all went public on the Nasdaq. European investors told BioWorld earlier this year that an IPO on Nasdaq generally offers higher valuation, more capital and less risk than European exchanges. And we’ve seen for several years, a great interest on the part of Chinese companies in going public. We’re definitely seeing all of that play out now. And these changes aren’t going away. We’ve got a really solid pipeline. So some of the possible IPOs that I would expect to see here soon, Hinge is likely to go public in April. It announced plans in March. While it didn’t set the timing or price, just the filings that’s done generally indicate that it’s pretty close to pulling the trigger. Heartflow filed previously. This week, it closed a $98 million convertible notes financing, which is often the step companies make just before they go for an IPO. So they may be on the verge as well. Clario filed confidentially last year and there are a lot of rumors on the street that it might activate soon. So we definitely see that this whole pace for IPOs is continuing. And again, we’re seeing them all across the world.

Lee: So, what kind of trends are you seeing in financing and in dealmaking?

Annette: Well, as Lynn mentioned, there’s very robust financing of all types in January and that’s definitely continued. Looking just at venture capital financing, we’re at $3.5 billion. So that’s about a billion dollars ahead of where we were at this point in 2024 and double Q1 from 2023. That’s very encouraging. And it’s not just an American thing. Again, VCs in Europe told us they’re ready to deploy more capital now and they’re bringing it specifically for cardiology, women’s health and robotics. Those are the top of their list. Looking at the deals that have closed in terms of M&A, digital health software and diagnostics have dominated so far this year though those deals tend to be small, or at least we think they’re small.

The percentage of companies that report how much they’ve gained in investments and how much they paid in M&As has been declining over time. So from what we can tell, those are small deals. And then going back to one of those drivers mentioned at the beginning here about increased investment in medtech, Lantheus may be the poster child for testing market consolidation with its $1.8 billion spent on two acquisitions in developing the radiotheranostics market. It’ll be interesting to see how that all plays out.

Perhaps the biggest trend, though, is towards really big cardiology deals. So far this year, we’ve had Stryker’s $5 billion acquisition of Inari, which added thrombectomy devices to its portfolio. Boston Scientific’s acquisition of Bolt for about $900 million all in. They already own some of that company. And it brought in intravascular lithotripsy. Teleflex acquired Biotronik’s vascular intervention business for about $800 million. And all of that continues to trend scene in 2024 with the most notable acquisitions of that year. Johnson & Johnson’s $13 billion acquisition of Shockwave and $1.7 billion acquisition of V-Wave and Edwards spending $2 billion for three cardiovascular companies. My prediction is I wouldn’t be shocked if we didn’t soon see the acquisition of some of the smaller pulse field deflation companies as well. Cardiology, you know, we’ve come a long way from minor improvements to stents and valves. We’re looking at really new technology and a huge amount of money behind it.

Lee: Great insight, Annette. Thank you. Lynn, do you have any questions you’d like to ask?

Lynn: Annette, let’s talk about the medtech sector compared to the biopharmaceutical sector. The Trump administration impacts are far reaching for the pharmaceutical sector. And it’s really impacting the business side. M&As are at the lowest point in 10 years. There’s less activity on the licensing and collaborations front. And financings are the third lowest amount and the third lowest volume in 10 years so far. These unpredictable markets and geopolitical chaos is impacting that. Why do you think medical technology sector is sort of excluded from that at the moment? Why is medtech so healthy?

Annette: I think there are a couple of factors. One is that it generally takes less money and less time to bring medtech technology to market than it does new pharmaceutical. And that means that there’s less risk both for the company and for investors. So, in this period where there’s huge risk on the pharma side, it makes medtech more appealing. One of the things that I’m interested in seeing is when my colleague Shani Alexander talked to VCs and other investors in Europe early this year, they said they thought more companies were even more than already, that more companies were going to come to the U.S. to get FDA approval before getting CE mark. And I’m wondering now with cuts at the FDA likely to increase the time needed to get approvals or clearance, whether we’ll see that reverse and people willing to go through the whole MDR process in Europe to get CE mark. But either way, they do have more options. And that is allowing companies to prove their case and show that they have a viable product, whether that starts sales here in the U.S., obviously the larger market, or in Europe, which has still been very strong, particularly for products like cardiology. So, whereas in the U.S., the money’s here. And so if there’s a problem getting it approved in the U.S., that’s a problem for the company. I think medtech has more flexibility worldwide.

Lynn: That all makes sense. We really appreciate your insight, Annette.

That’s our show for today. As always, Bioworld MedTech and Bioworld will continue to keep you informed of all the most important scientific, clinical, regulatory and business updates. We’re a daily news service covering the development of the most innovative human therapeutics and medical technologies designed to improve the human condition. If you need to track the development of drugs and medical technologies, turn to Bioworld.com.

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