In recent years, the medical technology and medical device manufacturing industries have become an increasingly significant sector of the Massachusetts economy. According to predictions from Evaluate Ltd., a market research firm, it is expected to grow at a five percent annual rate for the next five years. The report, entitled “EvaluateMedTech World Preview 2014, Outlook to 2020,” shows that medical technology sales are expected to reach $514 billion by the end of that period, with influential mergers reconstructing the faces of industry leaders.
The announcement of the merger involving Medtronic and Covidien, estimated at $42.9 billion, is one such example. It is anticipated that together they could become the new market leader in an industry that will be worth over half a trillion dollars by 2020. Research has also shown that spending on global research and development will reach $30.5 billion by that year, a growth of 4.2 percent. In the first half of 2014, $1.3 billion was raised in completed medical technology IPO offerings, a 44 percent increase from the same period in 2013. During the first half of this year, the value of mergers in the medical technology field rocketed up by 363 percent compared with the same period the year before, a huge indicator of what can be expected at least in the near future.
The Evaluate Ltd. report predicted that activity among the major players in the sector will continue on a large scale. The Medtronic-Covidien union represents the biggest merger in the industry’s history and marks the beginning of a period of rapid change for the market. This, and other megamergers, will continue to dominate and reshape the various areas of the field in the immediate and possibly extended future.