Dive Brief:

• Many of the healthcare delivery sites that connect the medtech industry to patients benefited from the support of the Paycheck Protection Program (PPP), according to data released by the U.S. Treasury this week.

• On the diagnostics front, about 5.6% of the nearly 15,500 medical laboratories in the U.S. received loans exceeding $150,000, as did roughly 16.1% of the more than 3,100 businesses classified as diagnostic imaging centers.

• As for some of the care centers that carry out surgeries critical to device makers’ success, some 26.6% of the close to 3,500 freestanding ambulatory surgical and emergency centers received loans greater than $150,000, and 5.8% of approximately 33,200 medical and surgical hospitals did as well.

Dive Insight:

The data dump this week covers $521 billion in funding across the 4.9 million PPP loans approved through the end of June. The release comes shortly after President Donald Trump signed an extension to the deadline, now Aug. 8, for businesses to apply for funds. About $132 billion remains up for grabs in the program's coffers, the U.S. Small Business Administration reported.

Support for smaller labs comes as consolidation in the industry may be poised to continue its roll. Both LabCorp and Quest Diagnostics expressed interest in M&A at the start of 2020. While the pandemic has presented its own challenges and hits to routine testing revenues at the two clinical lab networks, so too have the companies realized revenue gains from coronavirus testing. And similar trends could leave smaller, independent labs more vulnerable.

Quest has publicly addressed M&A since the pandemic took hold in the U.S. “There are other transactions in the pipeline that we were very close to announcing before the crisis,” CEO Steve Rusckowski told investors on the company’s most recent earnings call. “While they are on hold, our strong conviction is that these discussions will resume" in the third quarter.

Two weeks ago, Quest announced a deal to acquire and operate Mid America Clinical Laboratories, the largest independent clinical laboratory provider in Indiana. Ten medical laboratories were listed in the dataset as receiving PPP loans greater than $150,000 in the state of Indiana.

The hundreds of ambulatory surgery centers receiving support may bode well for device manufacturers hoping the outpatient facilities will help bring back elective surgeries more quickly as hospitals in some regions continue to prioritize COVID-19 care and restrict non-urgent procedures.

Among medical equipment makers, about 1,400 loans over $150,000 were listed for medical, dental, and hospital equipment and supplies merchant wholesalers. An additional 770 or so above that threshold were listed for surgical and medical instrument manufacturing businesses, and about 380 were noted in the surgical appliance and supplies manufacturing category.