DÜSSELDORF, Germany — Since no one can talk any longer about the possibility of an initial public offering (IPO) for a medical device company, calling it the "imaginary public offering" got a nervous laugh from the medical technology executives gathered with 40 venture capital firms here last week for a pure-partnering event, EuroMedtech 2009.

But looking around the room, the only other way to exit from an investment in med-tech was clearly going to be an acquisition of the company by one of the two guys sitting on the podium as part of a panel discussion.

And both of them spent 40 minutes closing that window of opportunity to a set of standards that were narrow and exclusive.

The discussion began on a cheery note with a reminder of the "fairy tale" exit for two companies, CoreValve (San Diego) and Ventor Technologies (Netanya, Israel).

Medtronic (Minneapolis) spent $1 billion in a single day to acquire these two companies, buying its way into the emerging field of minimally invasive heart valve implantation;

If there was a flicker of hope hearing about this "white space" acquisition, where a med-tech giant buys its way into a field where it did not have an established business, Erik Baas, director for Medicine and Technology International with Medtronic, quickly doused the flame, saying: "Moving forward, mergers and acquisitions will be focused on the fields where we are working now.

"It's not a question of cash," he said, noting that Medtronic put down $1 billion in a single afternoon to buy into the heart valve market.

Instead, future deals will look more like the acquisition of PreciSense A/S (Horsholm, Denmark), announced June 3 during the conference.

Here, he said, the continuous glucose monitoring technology will further Medtronic's development of a closed-loop system.

Bolting on to the existing product pipeline or rounding out the offering will be the focus for the near- and mid-term, he said.

André-Michel Ballester, CEO of Sorin Group (Milan, Italy), agreed, saying that "we are no longer looking to the white space, programs that are great opportunities but are outside our current business focus. These are less attractive to us than they may have been in the past."

"Now we are venturing into a new phase and the company is looking at three ways to innovate," Ballester explained.

"First," he said, "I am a firm believer that internal development is the best way for a company of our size to innovate and the most efficient way to launch a product, so we are spending close to €60 million, or 8% of our turnover on R&D."

"Next, we announced in our five-year plan in March that we would make some technology acquisitions," he said.

"We are going to be focused on a very limited number of fields for what I would say are early stage technologies that have passed the phase of human trials and are now in the phase of getting CE mark or FDA approval," Ballester said, continuing to narrow the field of applicants.

"These will be typically smaller acquisitions that bolt on to our existing business, that are focused on completing some niches we are missing in our main business," he said.

Finally, Ballester said, "there are companies with from €10 to €30 million in sales with low valuations due to financial market conditions."

"There are more of these opportunities than we can actually chew on," he said, "Yet it presents an opportunity to go back to what we used to do as a company of buying into the U.S. market."

A comment from the audience by Peter Albrecht, managing director for Boston Scientific Technologie Zentrum GmbH (Munich, Germany), not only confirmed that the executives on the podium were a fair representation of what both large-cap and mid-cap med-techs are seeking for acquisitions, but he raised the bar even higher.

With the increased scrutiny of medical devices by regulatory authorities in Europe and the U.S., he said Boston Scientific "is becoming more rigorous and careful in purchasing companies."

As a potential acquirer, he said, Boston Scientific first needs to look into a young company to see how the product will fit within the corporation's pipeline, and then how well the development process fits with the standards and even the language used for quality assurance.

"Here there can be tremendous differences, and it is not always the case that the same level of attention has been given by the product developer that will be required by our company," he said.

Antoine Papiernik with Sofinnova (Paris), which has €1.5 billion under management that prefers early-stage financing for med-techs, agreed that "if anything in a product development process is falling short, it will be found out."