Investments to Medical Device Firms Hindered by FDA

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Good news for U.S. companies, venture capitalists are optimistic about 2011. A national survey (found here) released by the National Venture Capital Association and Dow Jones VentureSource involving more than 330 venture capitalists showed a growing enthusiasm for investments, but not necessarily in medical device firms. According to the survey, the top three areas of growth were consumer Internet and digital media, cloud computing, and health care information technology. Biofuels and bioenergy are also expected to gain in investments this year. In contrast, medical device firms are not seeing as much money because, first, these other companies can be spun out for less venture capital than medical devices, and second, investors are cautious about investing in medical device firms because the inordinate delays associated with FDAs review of devices. The FDAs protracted timeline for review has created an uncertainty for when devices will reach the market. This uncertainty for an exit strategy may mean less venture capital for medical devices.

The FDAs review of medical devices through the 510(k) or PMA process is complex. Fuerst Ittleman has extensive experience successfully navigating medical devices through FDA review. For more information on FDAs review of medical devices, please contact us at contact@fidjlaw.com.