Orthopedic Titans Clash: Stryker, Zimmer Biomet, and Johnson & Johnson File Prospectuses Amid Market Transformation

Feb 16, 2024 17:59 CST Updated 17:59

Stryker

Medical Device R&D, Production, and Sales Company

Johnson & Johnson

Medical Device R&D and Manufacturer

Instrument Family

Pioneer in Medical Device Media Reports

Share Professional Medical Device Knowledge

Focus

Source: Saibailan Equipment

How Do Foreign Giants Respond to the Ever-Changing Orthopedic Market?

Orthopedic Foreign Giant, Latest Performance Announced

Recently, the three giants in the orthopedic field—Stryker, Zimmer Biomet, and Johnson & Johnson—all announced their full-year 2023 and fourth-quarterPerformance Report.

Stryker

Stryker's net sales in the fiscal year 2023 were $20.498 billion, an increase of 11.11% year-over-year; net profit was $3.165 billion, an increase of 34.22% year-over-year; the gross margin and operating profit margin for the full year were 63.7% and 19.0%, respectively.

In various细分business segments,Net sales of medical devices and neurotechnology business amounted to $11.8 billion, with organic growth in net sales of 11.8%; net sales of orthopedics and spine business reached $8.7 billion, with organic growth in net sales of 11.1%.

Stryker stated that, in view of the strong momentum of its own business in 2023, the significant growth in infrastructure investment demand in the healthcare sector, and the gradually stabilizing macroeconomic environment, among other favorable factors,The organic growth of full-year sales revenue for 2024 is still predicted to remain in the high range of 7.5%-9.0%, with adjusted net earnings per share reaching up to $11.70-$12.00.

Zimmer Biomet

Zimmer Biomet's net sales for the full year 2023 were $7.394 billion, representing a 6.5% increase from the same period last year; the net income for the year was $1.024 billion, adjusted to $1.584 billion.

Net sales in the fourth quarter were $1.940 billion, an increase of 6.3% over the same period last year; net income in the fourth quarter was $419.2 million, adjusted to $458.1 million.

The financial report announced the regional and product sales performance for the fourth quarter and the entire year of 2023:

Johnson & Johnson

Johnson & Johnson Medical Technologies' annual sales reached $30.4 billion, representing a year-on-year increase of 10.8%.Among them, Johnson & Johnson Medical Technologies' sales in the fourth quarter of 2023 were $7.673 billion, a year-on-year increase of 13.3%.

Sales in the fourth quarter were $21.4 billion, representing a year-on-year increase of 7.3%.Sales reached $21.4 billion, a year-on-year increase of 7.3%.

In various细分 business segments:Surgical business sales were $10.37 billion, a year-on-year increase of 3.6%; orthopedic business sales were $8.942 billion, a year-on-year increase of 4.1%; interventional solutions sales were $6.35 billion, a year-on-year increase of 47.70%; vision business sales were $5.072 billion, a year-on-year increase of 4.6%.

Johnson & Johnson stated that it expects sales performance across quarters to remain relatively stable in the coming year. The impact of bulk procurement for surgical and sports products is anticipated in 2024, with the effects from 2023 continuing.

Orthopedic Market in "Flux"

Under the叠加影响of various factors, the orthopedic market is undergoing a completely new change, and the moves of giants are particularly worth paying attention to.

Stryker noted in a recent conference call that despite supply constraints in some regions, the orthopedic market is expected to remain strong in 2024, driven by factors such as demographics, a favorable pricing environment, and robotic-assisted surgeries.

Looking back at Stryker's development, acquiring foreign technologies and enriching business operations through mergers and acquisitions has been one of the key strategies.December 18, 2023Stryker Announces Plan to Acquire French Joint Replacement Hardware Manufacturer SERF SAS

It is reported that Stryker has made a legally binding offer to acquire SERF SAS's parent company, Menix Group. International orthopedic sales account for approximately 65% of the company’s revenue. Financial details of the transaction have not been disclosed at this time, but Stryker stated in a press release that the acquisition is expected to be completed in the first quarter of 2024.

As a "long-time rival," Johnson & Johnson has also been making frequent moves in the orthopedics field. During its third-quarter investor meeting, Johnson & Johnson stated that its medical technology division is restructuring the DePuy Synthes orthopedic business.

It is reported that,Johnson & Johnson's orthopedics business restructuring is expected to be completed by the end of 2025, at a cost of $700 million to $800 million.A relevant Johnson & Johnson executive previously stated that the two-year restructuring plan will allow the company’s orthopedics division to exit "low-profit markets and product lines." Considering the withdrawal from certain markets and product lines, DePuy Synthes’ total revenue is expected to decrease by approximately $250 million over the next two years. However, these actions will enhance Johnson & Johnson’s ability to meet demand, accelerate growth, and improve profitability.

In the orthopedics field, as mentioned in Johnson & Johnson's financial report, the impact of volume-based procurement continues.

Last year,ZimVie, originally a division of Zimmer Biomet, announced plans to fully withdraw its spinal business from the Chinese market due to the impact of the national spinal procurement policy.

Stryker previously revealed in its financial report,Due to the failure in the spinal bidding process, it is exiting the spinal business in China.

Focusing solely on the Chinese market, the production environment of foreign giants is changing under the impact of centralized procurement. Chinese brands, with advantages in cost and distribution channels, are gaining an opportunity to overtake competitors.

ButBased on the overall scale and growth expectations of China's medical market, foreign orthopedic giants remain highly focused on the Chinese market, with related layouts and collaborations accelerating.

Given high attention, the investment layout and cooperation in China are also advancing.

Song Weiqun, Global Senior Vice President of Johnson & Johnson and Chairman of the China Region, stated:"Each department of Johnson & Johnson China has end-to-end R&D capabilities. China is the only market outside the United States where Johnson & Johnson has established R&D centers or R&D departments across all major businesses."

Zimmer Biomet China President Li Yongming mentioned in an interview:"The current localization is not deep enough. For example, we need to transform Zimmer Biomet China into a Chinese company with Zimmer Biomet's heritage, achieving full localization by using Chinese funds, technology, and raw materials, making it as much a Chinese company with foreign origins as possible, so that it can continue to develop sustainably in China."

In addition to the high-end field, orthopedic giants are also showing a downward trend in their exploration of the Chinese market.

Stryker China General Manager Zhang Shaobin said in an interview:"The Chinese market is an important part of Stryker's global strategic layout. Currently, with the increasing medical needs of the public, how to promote the widespread application of innovative medical devices and technologies at the grassroots level and optimize patients' medical experience is an urgent problem to be solved."

As competition reaches a fever pitch, the orthopedic device market is facing more challenges. However, new changes often hide new growth opportunities, and in the wave of industry iteration, new ways of survival are quietly emerging.

END

Powerful Alliance: Mindray Announces New Collaboration

Medical Device Giant: May Complete Spin-off in the First Half of 2024

$7.7 Billion: Cardiovascular Giant Plans to Sell Core Business

After Layoffs of 500, Medical Device Giant Sells Off This Product Line

Multiple Firsts in China, Brain Science Leader Plans IPO

Over 6.6 Billion: Mindray Medical Plans to Acquire Control of Huitai

The First Internet Healthcare Stock: 50% Layoffs?

After $21.1 Billion Merger, Orthopedic Giant "Reorganizes and Cuts Jobs"

Fourth Largest Globally, China's Leading Company Secures Strategic Financing of 900 Million Yuan

Beijing's Largest Hospital to Open: Mindray, United Imaging, GPS, and Others Win Bids

BusinessBusiness cooperation email: qxzj@landianyiliao.com