Brexit is influencing medtech FDI decisions, says EY’s Aidan Meagher

26 Jul 2018

Aidan Meagher, life sciences and medtech lead at EY in Ireland. Image: Luke Maxwell

Ireland stands to gain from the convergence between traditional medtech and life sciences with digital technologies.

Brexit is influencing foreign direct investment (FDI) decisions regarding crucial life sciences and medtech projects in Ireland’s favour because firms in these sectors need a route to the EU market.

That’s the view of Aidan Meagher, life sciences and medtech lead at EY in Ireland, who was speaking to about the boom in the industry.

Meagher said the outlook for medtech in Ireland is very positive because of the scale of infrastructure and investment in Ireland.

Med in Ireland

Globally, medtech is in rude health. Net income for medtech companies rose to $16bn last year, which represents the largest year-over-year increase since the financial crisis of 2008.

Increase in medtech venture capital (VC) investing is noteworthy. At $7.7bn, this represented a 23pc year-on-year increase, with investments from traditional venture capitalists and strategic investors.

There were also corporate VC investments that married traditional healthcare firms with some of the new entrants in healthcare.

For the first time, according to EY’s analysis, the percentage of total VC devoted to early-stage rounds set a new standard, with these start-ups capturing 52pc of overall venture dollars, and even surpassing the amount raised in later-stage rounds.

Meagher said that 2017 was a record year of investment in the sector globally.

That said, firms are still struggling to get investment and he added that medtech entrepreneurs are well supported in Ireland from a VC perspective.

“We are lucky here in Ireland because we have Enterprise Ireland, which is a fantastic avenue for medical device entrepreneurs to get that first step.

“There is a great network of people who have come out of multinationals and who can bring a great wealth to the sector, money to start and expertise of having been in-house, and they are very complementary for the sector.

“The outlook for the sector is very positive because of the physical infrastructure and the history of the sector.”

Convergence is a healthy trend

Meagher pointed out that with the onset of Brexit looming, Ireland will be the only English-speaking territory in the EU trading zone and this could serve the country well in terms of further FDI investment.

“The sector is growing 6pc a year, which is a record, and you are seeing other areas of life sciences actually transition into medtech.”

Meagher is referring to the convergence between traditional medical devices and technology.

“Given Ireland’s footprint in both, we stand really, really well to benefit from the convergence between those two and that’s a great thing to see.”

Examples of this convergence include Sanofi and Verily Life Sciences, which launched the joint venture Onduo to develop a comprehensive diabetes management platform.

Verily also announced a joint venture with Johnson & Johnson called Verb Surgical, which will use robotics and visualisation, among other technologies, to create a digital surgery prototype.

Meagher said that the medtech and life sciences industry in Ireland has recovered from initial fears around US president Donald Trump’s plans for tax reform.

“Because of the physical infrastructure that is here in terms of manufacturing and real boots on the ground in terms of high-end strategic jobs, Ireland will stand quite well and it has started to accelerate some of the decisions around investment.

“We are starting to see that uncertainty disappear and we know what the playing field looks like and it is enforcing that investment.

“Brexit is forcing decisions because companies need a route to the EU market,” Meagher said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years