Ernst & Young Global Biotechnology Center - Ernst & Young - United States

Medtech emerged from the recession relatively healthy, but long-term challenges remain: a funding drought and an uncertain global regulatory and reimbursement environment. What’s in store for the medtech industry? In our latest report, we evaluate the industry’s performance — financial, financing and transaction activity — and provide not-to-be-missed insights from leading medtech organizations.

How can you manage your company through the recession and position yourself for growth? After interviewing thousands of life sciences executives, we identified some overarching themes. From managing risks to improving capital allocation, we reveal the lessons that could mean the difference between surviving and thriving in the new economic environment.

 A deep funding drought. Depressed valuations. Demanding regulators and payors. These are challenging times. But are they unprecedented? Ernst & Young’s 23rd annual biotechnology report reveals how firms are responding with business strategies, new funding sources and creative deals. It also provides historical context, comprehensive data and insightful analysis to show how the business of biotech is going beyond business as usual, and what it means for you.

As industry regulations become more stringent, government and private insurers are placing unprecedented pressures on life sciences companies to demonstrate value for the products they develop. Not surprisingly, this challenge topped the list of the 10 most pressing risks facing the life sciences industry in 2009. Read the press release and report (pdf, 4.61M) for steps which can be taken now to address top risks.

As Washington changes direction, many question whether reform policies will present new opportunities or risks for the pharma, biotech, and medtech sectors. Watch our webcast to hear the views of industry leaders, including Billy Tauzin, President of PhRMA, Jim Greenwood, President of the Biotechnology Industry Organization and Brett Loper, Senior Executive Vice President, Government Affairs from AdvaMed.

Clinical development has always been expensive and risky. Today’s economy has only fueled these risks, as many firms reprioritize their pipelines and increase their reliance on clinical research organizations (CROs) to cut costs. In this bio*link, we summarize common accounting issues related to clinical activities (pdf, 142kb) and provide examples of good internal controls. We also offer useful information to help benchmark your internal controls against peers.

Life sciences companies often provide rights of return to distributors and must address multiple issues to account for these rights. Among other things, companies must determine if they can reasonably estimate future returns in order to recognize revenue at the time of sale to the distributor. This publication addresses (pdf, 146K) the accounting and reporting considerations related to return rights.

The life sciences industry is witnessing a remarkable uptick in M&A activity.Upcoming changes in accounting rules could have a significant impact on the way in which transactions are structured as well as an acquirer’s future earnings, financial metrics and compliance with debt covenants.This publication discusses (pdf, 215K) the implications of the new rules, which apply to transactions with closing dates on or after 1 January 2009.