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Emerging medical device companies should consider these points when weighing a potential merger, strategic partnership or investment:medical technology

1. Identify unmet medical needs

Medical device titans are actively looking to acquire new technologies to treat unmet medical needs and drive market adoption. Larger medtech companies often view early-stage companies as outsourced R&D labs, and will pay a premium price for products that can drive future revenue. The larger the potential market, the higher the value to medtech titans.

2. Know the market and competitors

Acquiring technologies that can transform or dominate a market drives many deals and collaborations. Disruptive technologies that improve patient outcomes are in high demand. Larger medtech companies are always on the lookout for new devices or improved treatments that have no or few competitors. Understanding the strategic investment goals and criteria of potential suitors will further refine and focus a growing medtech company’s efforts to gain visibility and generate productive relationships.

3. De-risk the technology and your company

Medtech companies need to be aware of the key legal issues that can arise in M&A or the partnering process. Problems discovered during due diligence can lead to price adjustments, changes in deal structure or, in extreme cases, termination of a transaction. Particular hot button issues include problems with the FDA, competitors, a patent portfolio, products liability litigation (pending or potential), how well a company has protected its intellectual property rights, or issues with the company’s capital and corporate structure. Medtech companies should address these risks early in the process before they are in the diligence process with a prospective suitor or partner to position themselves for a successful transaction.

4.  Develop a strategic patent portfolio

A strategic patent portfolio is crucial to a company’s growth and survival, providing numerous business advantages including positioning themselves for M&A and gaining leverage for collaborations with other companies. A strategic patent portfolio can be used both offensively as a “sword” to strike competitors and defensively as a “shield” to avoid competitors’ attacks.

To obtain broad patent protection, a medtech company should consider both current and future business objectives and contemplate ways that competitors may attempt to design around the patents.  Patent claims should be directed to the entire device, key components, disposables, methods of manufacturing, methods of treatment, therapeutic uses, combination therapies and any other aspects of the invention.

 Creating value-driven patent portfolios and ensuring potential patent issues have been addressed is essential to maximizing opportunities for potential M&A, investment and partnering deals.

David J. Dykeman and David C. Peck are co-chairs of the Global Life Sciences & Medical Technology Group at Greenberg Traurig. Dykeman can be reached at dykemand@gtlaw.com. Peck can be reached at peckd@gtlaw.com.

Tags: FDA, Greenberg Traurig, gtlaw, gt_law, medical technology, venture capital
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Photo of David J. Dykeman David J. Dykeman

David Dykeman, who serves as Co-Managing Shareholder of Greenberg Traurig’s Boston office and co-chairs the firm’s global Life Sciences & Medical Technology Group, is a registered patent attorney with more than 22 years of experience in patent and intellectual property law. David’s practice

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David Dykeman, who serves as Co-Managing Shareholder of Greenberg Traurig’s Boston office and co-chairs the firm’s global Life Sciences & Medical Technology Group, is a registered patent attorney with more than 22 years of experience in patent and intellectual property law. David’s practice focuses on securing worldwide intellectual property protection and related business strategy for high tech clients, with particular experience in life sciences, medical devices, robotics, materials, and information technology.

David provides strategic patent portfolio development and intellectual property advice for clients including major research institutions, multi-national corporations, and start-up companies. He also performs patent due diligence to assess patent portfolios for venture capital investment, mergers and acquisitions, and licensing opportunities.

An author of over 50 articles and a speaker at over 45 conferences on intellectual property law, David is the founding co-chair of the ABA’s Medical Devices Committee. He was honored as one of Boston’s “40 Under 40” innovative business leaders by the Boston Business Journal and was named to the “40 Medtech Innovators Under 40” list by Medical Device & Diagnostic Industry (MD+DI) Magazine. David has also been named one of the top 250 Patent and Technology Licensing Practitioners in the world by Intellectual Asset Management (IAM) Magazine, an “IP Star” by Managing IP magazine, a “Life Science Star” by LMG Life Sciences, and one of the World’s Leading IP Strategists in the IAM 300.

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Photo of David C. Peck David C. Peck

David C. Peck, Co-Chair of the firm’s Health Care & FDA Practice, works with emerging growth companies, established entities and private equity firms in executing their strategic plans. He assists companies beginning with corporate formation, obtaining and structuring both equity and debt financing…

David C. Peck, Co-Chair of the firm’s Health Care & FDA Practice, works with emerging growth companies, established entities and private equity firms in executing their strategic plans. He assists companies beginning with corporate formation, obtaining and structuring both equity and debt financing, mergers and acquisitions, as well as the integration of acquired operations, undertaking initial public offerings, and continuing through to liquidity and exit strategies.

David understands the unique needs of high growth companies. He has served as the General Counsel and Vice President of Finance of a high growth, public company, as well as being the President of a private, start-up company that raised multiple rounds of equity and debt financing and grew to more than $75 million in revenues in less than two years. David has a wide range of experience including the areas of health care technology and services, medical device, technology, corporate restructurings, and aviation.

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