PJC Blog
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Bridging 2008
For those who have been held up in a cave for the past few months, the credit markets have been in turmoil. Across all markets, financing companies with debt and equity has become more challenging. While the impact on venture-backed companies has not been as acute as financial institutions, there has clearly been an impact on financing early stage companies. Valuations have contracted, firms have increased capital reserved for existing investments, and the bar has been raised in the minds of many investors.
For companies seeking to raise follow-on capital, this can present a challenge--particularly for those that are close to key milestones ... but haven't quite reached them. In an era of higher bars and lower valuations, this often presents a disconnect between the valuation expectations of new investors and management/existing investors. What to do?
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Tags: VC_trends
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Let's not preempt innovation
Yesterday the Supreme Court heard arguments in a case involving a woman who was given a pharmaceutical treatment that resulted in a significant adverse event. While I spend less time thinking about drugs than medical devices, the case, its coverage in the media and a discussion at the most recent Dartmouth Device Development Symposium (3D) got me thinking about another Supreme Court case decided earlier in the year, Riegel v. Medtronic, which has significant implications for innovation in the device industry.
The essence of the Riegel decision was that a company cannot be sued in state court for harm caused by a medical device provided that it was approved under a PMA process and was manufactured and marketed under FDA guidelines. In other words, the Court held that challenges to the safety and efficacy of such devices are "preempted." The decision was 8-1 (on a court not terribly well known for 8-1 decisions). So why would someone concerned with the prospects for medical device innovation still be thinking about this case? As it turns out, members of congress are apparently drafting legislation that would preempt preemption—and limit medical device innovation.
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Tags: healthcare FDA medical_device innovation
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