The recent market declines that have driven down the valuations of newly-public medical technology companies have sent shudders through the device start-up community. Some industry executives are even starting to wonder whether we aren't seeing the beginning of the end in terms of the public market's appetite for medtech companies—a quick closing of an IPO window that just opened two years ago after a long dry spell. Indeed for some, 2006 is beginning to feel a lot more like 1997, when the IPO window closed for several years, than like 1993-1994, the last previous robust time for medical device offerings.
What's causing these tremors is that two-thirds of the device companies that have gone out so far this year have...