i'm not in PE -- rather, i'm in sell-side research but i have experience in both the biotech side as well as the device side. JoeyDVivre offered some good feedback, which is probably more relevant to the biotech side. clinical trials are relevant in medtech as well but i would say that one very important thing to do in both areas is to evaluate market potential. very often, the size of the addressable market is considered in the valuation of these companies.
for both biotech and medtech, and you'll need to be able to demonstrate to them an ability to think about overall market size and the peak market potential of a particular drug or device. with respect to the market, you'll need to evaluate the overall addressable population and the competitive landscape for products, and then consider the commercial viability of the drugs/devices. some things to consider might be the following: are they better than what's on the market already? do they demonstrate clinical equivalence or do they address a currently unmet medical need? what are the opportunities for label expansion? is there a favorable reimbursement environment for the products? and so forth.
once you've done this, you should form some reasonable expectation as to what will drive the market going forward (is it expanding or stagnant? what segments are most likely to grow? etc.), competitive dynamics (are there better drugs in the pipeline? is one product more likely to gain share than the other?) and the key drivers for the particular product in question.
on another note, also consider whether the company will need to raise additional capital to finance their clinical trials and sales/marketing of the product going forward, and how they might do that. if you have no financial background or knowledge of the company, don't sweat it...just realize that while debt/equity issuances are options, partnerships and royalty/license fees are other ways that these companies can generate additional revenue to fund their operations.
anyway, the bottom line is, if you can figure out what the fund focuses on (is it companies in a sector? specific products? indications?), you should start thinking about how the markets and competitive dynamics work and what the current therapeutic modalities are. then, when/if they ask you to evaluate a particular product, you'll not only be able to share your medical expertise on the matter, but you'll be able to succinctly explain what the financial opportunity of the company is - and at the end of the day, like JDV pointed out, it's important that you can separate the wheat from the chaff and understand what clinical aspects are actually meaningful to the company's valuation.
i hope this helps!
Edited 3 time(s). Last edit at Tuesday, September 5, 2006 at 02:35PM by numi.