We have been involved with the medtech industry for approximately 40 years. One of the benefits of being in this industry is that it’s recession-proof due to the demographics of people like us, the authors of this column.
As our population continues to age, partly due to the benefits of the products developed by the medtech industry, it continues to grow and move forward – even through the worst financial crises during our lives. Even in down times, it has produced new jobs and growth.
The only major challenge to medtech job growth was the Affordable Care Act when jobs were lost due to excessive industry taxation. However, that’s a topic for another discussion.
From a business and career perspective, demographics have made medtech exciting and rewarding. From an investment viewpoint, there is return on investment (ROI) on innovation that improves outcomes. For people participating in medtech throughout their careers, medtech has been meaningful as we contribute to an industry that has positive impacts on patients’ lives – sometimes even saving them!
Then, COVID-19 hit us all with a fury! It’s like a tornado has swept the healthcare Industry and the medtech companies that support it. As with many great storms, some are harder hit than others. And in some cases, those supporting the recovery actually do very well.That is exactly what is happening in medtech in 2020. The companies that just happen to be in respiratory related products are growing beyond their wildest imagination. (See Infographic, page 8.) Unfortunately, it’s not the dream they had hoped for as it has come at a cost – supply chain issues and operational challenges to meet demand. Most importantly, the stress to ramp-up to save lives is a pressure no one would wish on another. Every shipment made or not made could impact a patient's survival or a clinician's safety – stress that no one would ask for, even if it means a few extra dollars.
And the companies that focus on elective procedures have seen the brunt of the fiscal storm. Hospitals shut down most of their operating rooms and surgery centers during the height of the pandemic. These customers no longer needed supplies from many of our medtech industry companies. This has led to a disastrous Q2 for many.
This COVID storm has led to medtech winners and losers from a business perspective – without regard to actual business acumen or planning.
Unfortunately, a recent survey of business owners indicates that 20% now need to recapitalize or sell their business due to COVID's economic damages. If you happen to be one of those companies or know one of these entities, you need to retain a professional mergers & acquisitions (M&A) advisor focused on the medtech industry. Industry professionals like us can give you a candid assessment of the current investment environment and help you plan next steps.
And, if your business is on the upswing and working extra shifts, may you get a chance to take a breath in the near future. You’ve saved lives and made a difference. You’ve earned a break!