Pharmiweb ChannelsAll | PharmaCo | Clinical Research | R&D/BioTech | Sales/Mktg | Healthcare | Recruitment | Pharmacy | Medical Comms RSS Feed RSS Feeds


Press Release

Global medtech revenue bounces back, though focus on sustainable growth must continue

Posted on: 25 Sep 17

NEW YORK, Sept. 25, 2017 /PRNewswire/ -- The global medical technology (medtech) industry grew by 5% in 2016, a pace last seen before the financial crisis. This strong performance was fueled by mergers and acquisition (M&A) and portfolio optimization strategies, as well as continued focus on capital efficiency and research and development (R&D) investments, according to Pulse of the industry, the 2017 EY medical technology industry report.

Overall, revenue from US- and Europe-based medtechs grew to US$364.4 billion in 2016 after a 3% decline in the prior year. Meanwhile, net income for these companies soared 17% to US$16 billion, compared with a 20% dip to US$13.7 billion in 2015. Additionally, total R&D spending by pure-play medtechs rose 5% to US$16 billion in 2016.

Pamela Spence, EY Global Life Sciences Industry Leader, says:

"Medtechs continue to use M&A, collaborations with new entrants and new technology investments to navigate an array of uncertainties. To achieve sustainable growth though, medtechs must embrace more data-driven strategies that co-create value for all industry stakeholders and participate in emerging outcomes-driven care delivery platforms that are highly personalized. They also need to balance internal R&D investments with innovations in the new, connected economy such as augmented reality (AR), additive manufacturing (AM) and artificial intelligence (AI) so their R&D bets deliver a lasting, competitive edge. Embracing 'The 4th Industrial Revolution,' which fuses the physical, digital and biological, is a current – not future – imperative."

The report shows financing for medtechs, including early-stage companies, is available. Overall, US and European medtech financing increased 101% in 2016, to US$43.9 billion, the second-highest total in the past decade. Venture capital financing climbed to US$7.7 billion, a 23% year-on-year increase and a positive sign for future medtech innovation.

Additionally, the flow of capital is increasingly becoming more global. In 2016-17, China vaulted to become one of the leading regions for total equity capital, as medtechs raised more than US$1 billion in 16 financings. Asia-based investors were also active backers of US and European medtechs, participating in three of the year's largest venture rounds.

John Babitt, Partner, Ernst & Young LLP – Life Sciences, Transaction Advisory Services, says:

"There is financing for medtechs, particularly those that are developing tools for the biopharma industry, which is eager for novel technologies that either improve drug development or deliver differentiated therapies. At the same time, as companies continue to implement longer term strategies built on new technologies and partnerships, they must continue to focus on capital efficiency to maintain – or improve – future growth trajectories."

Other key results highlighted in the report include:

Strong deal-making environment persists: In all, medtech companies in the US and Europe announced deals worth nearly US$100.4 billion, an increase of 46% over the prior 12 months and an industry record.

IPO climate cools: Excluding one of the industry's largest medtech IPOs last year US and European medtechs raised just US$547 million in IPO capital during 2016-17, an 8% drop over the prior year's total.

Industry market cap increases: The industry's cumulative market cap increased 26% from 1 January through 31 August, lifted by strong earnings reports and an active deal-making climate.

About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit

This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients. This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.

About the report
The key findings from Pulse of the industry, the 11th edition, are based on an EY analysis of companies headquartered within the US or Europe whose main business purpose is the commercialization of medical technology. For the purposes of this report, we have placed Israel's data and analysis within the European market and global data represent combined metrics from US and European medtechs. EY defines medtechs as therapeutic device, diagnostic, drug delivery and analytical/life sciences tool companies. This definition excludes distributors and service providers, such as contract research organizations or contract manufacturing organizations.

How EY's Global Life Sciences Sector can help your business 
As populations age and chronic diseases become commonplace, health care will take an ever larger share of GDP. Scientific progress, augmented intelligence and a more empowered patient are driving changes in the delivery of health care to a personalized experience that demands health outcomes as the core metric. This is causing a power shift among traditional stakeholder groups, with new entrants (often not driven by profit) disrupting incumbents. Innovation, productivity and access to patients remain the industry's biggest challenges. These trends challenge the capital strategy of every link in the life sciences value chain, from R&D and product supply to product launch and patient-centric operating models.

Our Global Life Sciences Sector brings together a worldwide network of 15,000 sector-focused professionals to anticipate trends, identify their implications and help our clients create competitive advantage. We can help you navigate your way forward and achieve sustainable success in the new health-outcomes-driven ecosystem.

For more information, visit

Laura Powers
EY Global Media Relations
+1 212 773 6381


Editor's Details

Mike Wood

Last updated on: 25/09/2017

Site Map | Privacy & Security | Cookies | Terms and Conditions is Europe's leading industry-sponsored portal for the Pharmaceutical sector, providing the latest jobs, news, features and events listings.
The information provided on is designed to support, not replace, the relationship that exists between a patient/site visitor and his/her physician.