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On February 13th Allergan announced it will acquire ZELTIQ Aesthetics for $2.47B (14% premium). The next day Hologic announced it will acquire Cynosure Inc for $1.65B (28% premium). Both ZELTIQ and Cynosure are medical device companies focused entirely on aesthetics including ‘body contouring’ (non-invasive fat reduction). While Allergan has had significant presence in aesthetics (Botox accounts for around 20% of total sales), Hologic has not. Their focus is largely related to women’s health: diagnosis, imaging and treatment. +++ Aesthetics consists of surgical procedures, such as breast augmentation and face lifts, as well as non-surgical procedures such as Botox injections and non-invasive fat reduction. Surgical procedures account for approximately 44% of total aesthetic procedural volume while non-surgical accounts for the other ~56%. According to MarketsandMarkets, the global aesthetics market is expected to grow at a CAGR of almost 11% through 2020, more than double the estimated ~5% annual growth of the overall global medical device market. The U.S., Brazil, Mexico, and India lead the world in non-surgical aesthetic procedures (such as body contouring), accounting for approximately 40% of the worldwide procedural volume, according to the International Society of Aesthetic Plastic Surgery. Some of the recent and expected continued growth of the segment may be attributable to an increase in the number of men who are getting cosmetic/aesthetic treatment. Plastic surgeons are also adopting non-invasive devices as a way to offer additional procedures and another revenue source. +++ Group member and Zacks analyst Brian Marckx helped write today’s announcement and asks, “The aesthetics market is largely not reimbursed by insurers, which is generally considered a significant drawback. Yet clearly the aesthetic segment is now being viewed as an attractive growth segment. Why do you think that is?” Share your comment publicly and, if you want to reach Brian directly, https://www.linkedin.com/in/brian-marckx-cfa-75441a5/ is his LinkedIn URL. ++++++++++ FREE PATENT WEBINAR NEXT TUESDAY Medical Devices Group Advisory Board member, Intellectual Property Lawyer Doug Limbach will give you free counsel how to protect your patents from competitors. Specifically, you will learn: So I invite you to take this free content and protect your work! Join us at http://medgroup.biz/check-patent on February 28. It’s free for all group members. ++++++++++ FOR MEDTECH ENTREPRENEURS My buddy Allan Daisley runs the ZeroTo510 Medical Device Accelerator out of Memphis, Tennessee. They are taking applications at http://medgroup.biz/zeroto510 now for their sixth year. If selected, you’ll take advantage of a proven methodology, experienced mentors, and a seed investment. 60% of the graduates received follow-on funding (averaging about $700,000 per company to date). If you apply at http://medgroup.biz/zeroto510 and get in, let me know! I like a good success story! ++++++++++ Make it a great week. Joe Hage P.S. The 10x Medical Device Conference is ten weeks away. I’d love to meet you if you can make it out to San Diego. http://medgroup.biz/10x Joe Hage Joe Hage Julie Omohundro Yet clearly the aesthetic segment is now being viewed as an attractive growth segment. Why do you think that is?” It’s not a drawback. People want these procedures and are happy to pay top dollar for them, which means they can be very, very profitable. In contrast, insurers don’t want the procedures they are paying for. What insurers want are premiums. Whatever an insurer pays for the procedures they cover offers no value to the insurer; it just reduces their profit margin. So insurers want to pay bottom dollar. Paul Maguire Modesto (Mo) Casas Larry Brewton Brian Marckx, CFA Efrem Cray Mick Hannan John W. RAKESH SRIVASTAVA Peter Meyer Marked as spam
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