Impact of COVID-19 on medtech innovation investing
08 June, 2020
Bernard Vogel, Managing Partner at Endeavour Vision
The medtech industry has never in history been of such pivotal importance as in the last few months during the pandemic.
As countries all over the world grappled with the devastating impact of the virus, medtech suppliers of ventilators, diagnostic kits, and personal protection equipment (PPE) faced overwhelming demand from the frontline.
Yet for others in the sectors, the story has been very different, with a fall-off in demand due to cancelled elective procedures and hospitals focusing their efforts and personnel on COVID-19.
With the worst of the pandemic seemingly over in Europe and the U.S, there are now encouraging signs. Where the number of hospitalised patients for COVID-19 is falling, there is a rise in non-COVID-related procedures and the projections for the months ahead look promising.
But, even when we see a return to normal, the world after COVID-19 will be a very different place for everyone, with social distancing measures commonplace and less funding available.
One of the positives to emerge from the crisis will be the greater value placed in medtech innovations and appreciation of their benefits. The pandemic exposed gaps in the delivery of healthcare that innovative medtech and digital companies are uniquely able to address. More support from governments and regulators will help to accelerate market-entry for new technologies, particularly for those which can address these issues and bring cost savings to struggling healthcare systems.
While the environment will become more favourable in the dismantling of barriers, the challenge facing medtech entrepreneurs, at least in the short-term, will be to raise funds. Many non-specialised investors have withdrawn from the sector, while specialists are holding on to reserves to compensate for reduced portfolio revenues in H1 2020. Recovery is expected in the second half of the year, but it will be slow.
As with all crises, the clouds will lift, and the industry will bounce back. The next few years will see an acceleration in activity and increasing investment to bring healthcare systems to a level of performance fit for the 21st century. Investors will have a unique opportunity to influence and shape this new healthcare landscape, by identifying and supporting the medtech innovators and entrepreneurs who have the much-needed solutions.