EY on the current state of the medtech industry

In 2025, the aesculapian instrumentality manufacture saw a dependable watercourse of dealmaking activity. Among the year’s largest transactions were Abbott’s acquisition of Exact Sciences for $21bn, Becton Dickinson (BD)’s $17.5bn divestment of its Biosciences & Diagnostic Solutions concern to Waters Corporation, and Stryker’s $4.9bn acquisition of Inari Medical.

So acold successful 2026, dealmaking enactment has fallen somewhat abbreviated of expectations. At the J.P. Morgan Healthcare league successful January 2026, a play that typically sees a flurry of M&A activity, Boston Scientific’s $14.5bn acquisition of Penumbra was the standout medtech megadeal. However, enactment has picked up modestly, including Medtronic’s acquisition of Scientia Vascular successful March.

On the archetypal nationalist offering (IPO) front, enactment successful the medtech manufacture saw a flimsy resurgence successful 2025, arsenic anticipated by assorted marketplace observers, with companies including Kestra and BillionToOne going public, with Medline’s $6.26bn offering closing retired the twelvemonth successful December. In 2026, contempt January representing a communal IPO motorboat window, enactment has been limited, with highlights including diabetes specializer MiniMed going nationalist with a $560m rise successful March, albeit abbreviated of the erstwhile Medtronic division’s $784m expectation.

In September 2025, EY published its 19th ‘Pulse of the Medtech Industry’ report. Authored by John Babitt, EY’s planetary medtech leader, and Arda Ural, EY Americas beingness sciences leader, the study highlighted that the medtech manufacture has been experiencing dependable VC and M&A activity, with deal-making “judicious”, with little deals being made yet ones with higher valuations overall.

Since the merchandise of EY’s past report, the US and Israel person initiated a warfare with Iran that is affecting proviso chains globally. Meanwhile, investors proceed to wage adjacent attraction to the ongoing emergence of artificial quality (AI), which continues to person a beardown interaction connected extremity markets wrong the medtech industry.

Medical Device Network spoke to Babitt to larn what interaction rising challenges specified arsenic capitalist perception, struggle successful the Middle East, and Iran’s closure of the Strait of Hormuz are having connected factors specified arsenic pricing and IPO enactment successful the medtech industry.

This interrogation has been edited for magnitude and clarity.

John Babitt (JB): From abroad-based, fundamentals perspective, things person stayed the course. I deliberation there's been bully maturation successful the wide industry, with the underlying dynamics of measurement expanding astatine mid-to-high-single digits, with pricing remaining stable.