Global Orthopedic Medical Device Market Sees Major Shift: Johnson & Johnson Loses Top Spot, Medtronic Overtaken by Smith & Nephew

MedNet, April 9 — The global orthopedic medical device market has undergone significant changes, with Stryker claiming the top spot and Johnson & Johnson ranking second.

 

On April 5, the medical device industry website Medical Design & Outsourcing released the “Top 10 Global Orthopedic Medical Device Companies of 2018” list, while also highlighting recent developments at these ten companies.

 

The rankings show that Stryker claimed the top spot in the global orthopedic market with revenue of $13.6 billion, while Johnson & Johnson’s orthopedics business ranked second with $8.9 billion. Zimmer Biomet and Smith & Nephew ranked third and fourth, respectively, with Medtronic’s orthopedics business slipping to fifth place.

 

This represents a significant shift from the 2017 rankings of the global top five orthopedic companies. In 2017, the top five were ranked as follows: Johnson & Johnson–DePuy Synthes, Zimmer Biomet, Stryker, Medtronic, and Smith & Nephew. In fiscal year 2018, Stryker experienced strong growth, jumping directly from third to first place. Meanwhile, Smith & Nephew’s revenue surpassed that of Medtronic’s orthopedics business for the first time, moving it up one spot to fourth place.

 

 

In 2018, Stryker became the world's largest orthopedic medical device company, with strong revenue momentum reaching $13.6 billion. Meanwhile, Stryker's profit more than doubled in 2018, reaching $3.6 billion, while sales increased by 9.3% to $13.6 billion.

 

Stryker executives believe that the integration of K2M has solidified its position in the spinal market. In November 2018, Stryker acquired K2M for approximately $1.4 billion and projected double-digit growth in 2019 for its Mako system, which is used for robotic-assisted knee and hip implant surgeries.

 

Furthermore, it continues to invest in technological innovation, announcing last month the $220 million acquisition of OrthoSpace, an Israeli orthopedic medical device company. This acquisition secured its flagship product, InSpace, which is used to treat patients with difficult-to-manage rotator cuff tears and serves as an alternative to reverse shoulder arthroplasty.

 

 

According to Johnson & Johnson’s 2018 annual report, its orthopedics business generated total revenue of $8.9 billion, with sales of orthopedic devices declining by 1.9%.

 

Part of the business contraction was due to Johnson & Johnson’s sale of its Codman Neurosurgery business—a manufacturer of spinal and cranial repair products—to Integra LifeSciences in 2017 for over $1 billion. This resulted in negative growth for Johnson & Johnson’s DePuy Synthes division starting in 2017. Meanwhile, sales of Johnson & Johnson’s knee surgery products also declined due to competitive pressures in the U.S. market.

 

In addition, in 2018, Johnson & Johnson launched new products related to hip and spine surgery, including the Concorde Lift expandable device and the Viper Prime system for minimally invasive procedures. In the same year, Johnson & Johnson acquired Orthotaxy, a French company specializing in robot-assisted surgery, to develop a robotic surgical platform. Reportedly, the Orthotaxy robot is smaller than current surgical robots.

 

 

In 2018, Zimmer Biomet reported revenue of $7.93 billion and was undergoing a two-year restructuring plan. The company secured several key regulatory approvals in 2018; for instance, in October 2018, its personalized knee implant system, featuring custom components tailored to match each patient’s anatomy, received approval. Earlier this year, the company’s ROSA Knee robotic-assisted total knee arthroplasty platform was approved, followed by the approval of the ROSA One robotic spine system.

 

Notably, in late 2018, Zimmer Biomet incurred losses stemming from legal litigation, losing a patent case involving Stryker’s surgical instruments and paying $248 million in damages. CEO Bryan Hanson stated, “Overall, our full-year financial performance aligned with our expectations for the business transformation process, bolstering our confidence in achieving our 2019 targets.”

 

 

Smith & Nephew reported revenue of $3.629 billion in 2018, with its knee implant business growing by 3% to exceed $1 billion, and its hip implant business increasing by 2% to reach $613 million.

 

Headquartered in London, UK, Smith & Nephew PLC is a global leader in four key areas: orthopedic joint reconstruction, advanced wound management, sports medicine, and trauma, ranking number one worldwide in the sports medicine sector.

 

Last month, Smith & Nephew introduced Navio 7.0, the latest software for its handheld robotic surgical system, at the AAOS annual meeting held in Las Vegas. Scheduled for release in the second half of 2019, Navio 7.0 will feature a new intuitive interface, expanded surgical preferences, and streamlined workflows to reduce operative time.

 

It should be noted that this marks the first time in three years that Smith & Nephew has ranked fourth in the global orthopedic market.

 

In 2015, Smith & Nephew’s orthopedics business (including knee implants, hip implants, and trauma care) ranked fifth globally in the orthopedics sector with revenue of $1.984 billion. Over the following two years, Smith & Nephew maintained its fifth-place ranking, consistently trailing behind Medtronic.

 

However, since fiscal year 2017, the gap between Smith & Nephew and Medtronic has been gradually narrowing. In 2016, the difference in their orthopedic revenues was approximately $900 million, whereas in 2017, this gap narrowed to $600 million.

 

Previous analyses have indicated that Medtronic’s orthopedics business accounts for only 9% of its total group revenue. Given the near-stagnant growth in this segment, Stryker has a significant opportunity to surpass it.

 

In addition, in fiscal year 2019, Smith & Nephew’s ranking will rise further, surpassing fourth place.

 

In February this year, the Financial Times reported that Smith & Nephew was in negotiations to acquire medical device manufacturer NuVasive, with the total transaction value potentially exceeding $3 billion (approximately RMB 20.2 billion).

 

NuVasive, the acquiree, is a medical device company specializing in the development of minimally invasive spinal repair products and procedures, with a focus on applications in minimally invasive spine surgery. Its main product offerings include minimally invasive surgical platforms, biologics, cervical solutions, motion preservation products, and intraoperative monitoring (IOM) services. It ranks seventh on the list of the "Top 10 Global Orthopedic Medical Device Companies."

 

 

Over the past two years, Medtronic has not only lost its top global position in the spine market but has also slipped to fifth place. In 2018, Medtronic’s spine business generated approximately $2.7 billion in revenue, surpassing Stryker, which had been closely trailing behind. However, Medtronic’s orthopedics segment accounts for only 9% of the group’s total revenue; although its ranking has dropped by one position, it remains a force to be reckoned with.

 

In December 2018, Medtronic completed the $1.7 billion acquisition of Mazor Robotics and its robotic-assisted surgery platform for spinal procedures. At the time, analysts noted that the acquisition would undoubtedly significantly strengthen Medtronic’s capabilities in the field of spine surgical assistance.

 

One month after the acquisition was completed, Medtronic launched the Mazor X Stealth robot-assisted spinal surgery platform in the United States.

 

Medtronic executives expect that Mazor X Stealth will help Medtronic expand its neurosurgery business and generate demand for spinal implants.

 

 

2018 Revenue: $1.186 billion

 

DJO Global is a medical device company specializing in implants for the knee, shoulder, and hip, as well as joint and spinal support devices.

 

Colfax Corp acquired DJO Global for $3.15 billion in February this year, marking the largest acquisition in the company’s history, with the aim of meetingInfantThe Growing Demand for Medical Devices Such as Knee and Hip Implants Among the "Chao" Generation.

 

 

2018 Revenue: $1.102 billion

 

Headquartered in San Diego, California, the company is an innovative medical device firm dedicated to developing disruptive minimally invasive surgical products and cervical disc replacement systems, ranking as the third-largest spinal medical device company globally. In early February this year, media reports indicated that Smith & Nephew PLC planned to acquire NuVasive, with the total transaction value potentially exceeding $3 billion.

 

NuVasive CEO Chris Barry stated in the February investor report, “NuVasive achieved robust year-over-year revenue growth of over 7% in 2018, demonstrating the company’s ability to secure a foothold in the relatively stable U.S. spinal market.”

 

 

2018 Revenue: $836.2 million

 

Headquartered in Memphis, Tennessee, USA, the company is a specialized provider of orthopedic devices and biocorrective materials.

 

 

2018 Revenue: $453 million

 

 

2018 Revenue: $446.7 million

 

Kangmei is a global medical technology company headquartered in New York, USA, dedicated to the innovation and promotion of minimally invasive technologies and products in the fields of orthopedics and surgery, globallyMedical DevicesHolds a significant position in the industry.

 

In 2018, the company’s domestic U.S. orthopedic revenue grew by 4.5%, and its international orthopedic revenue grew by 3.5%.

 

Note: Compiled by CCBN Medical Devices from Medical Design Outsourcing Device Technology Magazine.