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October 09, 2015.
Despite a record number of IPOs and a robust M&A market, the global medtech industry "continues to face tepid growth and a dwindling pool of investors for early-stage companies", according to EY's latest annual medical technology report, Pulse of the Industry. The findings raise "important questions about the long-term sustainability of the sector," Glen Giovannetti, EY's Global Life Sciences Leader, adding that, over the last 12 months, "the disparity between the ‘haves’ and the ‘have-nots’ in the medtech sector has grown increasingly stark". The report states that, over the 12-month period ending 30 June 2015, the industry saw a climate that was far from uniform and presented many challenges, including revenue and net income remaining flat; the fall of venture funding; the erosion of early-stage funding eroding; and falling innovation capital. However, the industry also delivered several strong performances. Smaller medtechs outperformed the broader medtech industry, delivering revenue and net income growth of 6% and 16%, respectively; the M&A market is "steady" and "healthy"; new financing, driven by debt and IPOs, is high; and R&D investment is rising while cash returned to shareholders decreased. Jeffrey Greene, EY’s Global Life Sciences Transactions Advisory Services Leader, commented: “At a time when the industry is continuing to experience rapid consolidation, a changing customer base, and a rise in shareholder activism, companies at all stages need to implement effective capital allocation strategies to create and demonstrate value." More more information, visit http://www.ey.com/GL/en/Industries/Life-Sciences/EY-vital-signs-pulse-medical-technology-report-2015