Time to Invest in Medtech Stocks?

The Life Sciences Report spoke with William Plovanic, analyst and managing director with Canaccord Genuity about the opportunity presented in the slowdown in medtech stocks.

As quoted in the interview:

TLSR: Currently, what are the growth drivers in your coverage space?

WP: With medical devices, the way you typically grow a company is to develop a product that is either slightly different or very differentiated from what is already on the market. You build a better mousetrap, or a whole new way of solving a problem. Next, you gain a group of adopters. Then you fill out the product offering so that you’re able to capture as much revenue from a given procedure or physician/physician group as possible. After that it is all about expansion of distribution to capture more surgeons. Products and distribution tend to drive smaller companies as well as the larger ones.

The advantage of a new technology, a new product, a mousetrap that is a little better or a lot better, is that you will drive higher pricing. Of course, if you are just starting up, it will drive a significantly higher price. If you are building an existing company, it will help offset price degradation in your core, commoditized product lines.

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