DMN: To highlight how important this funding has been for medical device start-ups previously, are there any examples of success stories that come to mind?
PT: Some success stories in the past few years have been in the renal denervation space (minimally-invasive devices to deaden nerves entering the kidney in order to treat high blood pressure). This space has enormous significance for the way high blood pressure, a disease afflicting tens of millions of Americans, will be treated going forward, mainly for severe cases initially but then probably extended to many others over time. If you can treat a disease like this with a single treatment, you can save tens of thousands of dollars on drug therapy and continued office visits over the course of a person's lifetime. Ardian raised about $66 million, largely in VC funding from Morgenthaler Ventures, Advanced Technology Ventures, Split Rock Partners and Emergent Medical Partners (including $47 million in 2009, at the "bottom" of the capital markets) and then was purchased by Medtronic for $800 million. Boston Scientific bought Vessix Vascular for up to $425 million (including milestone payments). Vessix had received at least $30 million in VC funding from NeoMed, OrbiMed Advisors and Edmond, the Rothschild Investment Partners, prior to its sale to BSX. The market potential for renal denervation therapies is expected to exceed a few billion dollars by 2020.

DMN: Why is there still hope for med tech?

PT: I believe that everything is cyclical. Medical device companies have seen their challenges before, but the sector is never going away. Many conditions need to be treated by medical devices, they are a critical part of the health care delivery equation - drugs can't treat everything. There is also a growing and aging population of people living longer who are going to need more clinical care and procedures, so there is going to be increasing demand for medical devices that can save the health care system money - smaller, more innovative, less costly, minimally-invasive devices and consumables that can treat conditions more easily, quickly, with less operating room time and devices such as health monitoring devices that help keep patients out of the hospital (as health care is shifting out of the hospital and increasingly into the home and alternate care settings). This is going to require and drive innovation, and the best technologies will get funded and have attractive exits. As that increasingly happens, there will be a renewed interest in medical device investment and more companies will get funded.

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