Thursday, March 22, 2012

The Most Profitable Orthopedic Device Companies in 2011

Featured:  Written by Laura Miller | March 21, 2012  (Becker's Spine Review)  Excerpts

Stryker ($8.3 billion). Stryker's net sales were up 13.5 percent in 2011 over 2010. United States sales rose 9.9 percent in 2011 to $5.2 billion, with international sales up 20.2 percent to reach $8.3 billion all together. Spine sales showed 48.5 percent growth in 2011, to $1.4 billion, while neurotechnology jumped 134.4 percent to $750 million. Hip sales were up 6.4 percent while knee sales remained flat. During the first half of 2011, Stryker acquired Orthovita and received FDA clearance for its MDM X2 Modular Dual Mobility Mobile Bearing Hip System. The company announced it would close two locations of its subsidiary, Gaymar Industries, during the fourth quarter. In early 2012, Stryker President and CEO Stephen MacMillan announced he would step down from his post for family reasons.

DePuy Orthopaedics ($5.8 billion).
Johnson & Johnson subsidiary DePuy Orthopaedics reported $5.8 billion in 2011, a 4 percent increase over 2010. The company's United States sales dropped 1.7 percent to $3 billion, but the company offset U.S. sales with a reported 11.3 percent international sales increase. Over the past year, Gary Fischetti was appointed company group chairman for the DePuy Family of Companies and Andrew Eckdahl was named the company's new president during the first half of the year. In 2011, Johnson & Johnson spent $521 million on the DePuy ASR Hip recall program, up from $280 million in 2010. The company launched six new devices recently at the American Academy of Orthopaedic Surgeons annual meeting in 2012.

Zimmer Holdings ($4.45 billion).
In 2011, Zimmer's net sales grew 5.5 percent over 2010. The company attributes its success to above-market performance in European, Middle Eastern, African and Asian Pacific markets. The American market remained flat, with reported net sales at $620 million. In the fourth quarter, the company completed the ExtraOrtho acquisition. It's knee business saw a 2 percent increase in net sales overall, but in the American market net sales declined by 4 percent. Hip sales were up 7 percent worldwide while spine sales dropped 4 percent to only $225 million. During 2011, the company received FDA clearance on several devices and introduced the new CLS Brevius Hip Stem with Kinectiv Technology to the United States in December. The company acquired XtraFix External Fixation systems in November and presented the results of clinical trials at national orthopedics meetings.

Smith & Nephew ($4.2 billion).
Smith & Nephew's revenue was up 8 percent in 2011 over 2010. Smith & Nephew's CEO Dave Illingworth announced his retirement early in the year and was succeeded by Oliver Bohuon. The company's orthopedics business rose 2 percent to $2.1 billion. Fourth quarter revenues were flat in the United States and dropped by 7 percent in Europe after the company decided to take back management of some supply lines in Spain, but these results were offset by 10 percent growth in the rest of the world. The company's sports medicine business grew 7 percent in 2011 while orthopedic trauma sales were up 3 percent. Smith & Nephew introduced several new devices to the market in 2011, including the VERSAJET II for advanced wound care.

Biomet ($2.8 billion). During 2011, Biomet reported $2.8 billion in net sales. During the second quarter of fiscal year 2012, the company reported a 4 percent increase in net sales, but spine sales were down 5 percent worldwide. The company celebrated the 35th anniversary of its Oxford Partial Knee replacement and launched the Signature Personalized System for the Oxford Partial Knee. The company received FDA clearance for the Active Articulation E1 Dual Mobility Hip System and worked with OMeGA Collaborative to support graduate medical education.


Wright Medical Group ($512.9 million). Wright Medical Group's net sales were slightly lower in 2011 than in 2010, when the company reported $518.9 million. Domestic sales dropped by 4.5 percent in 2011, which drove the 1.2 percent overall decrease in sales. International sales increased by 3.8 percent, but wasn't enough to offset poor U.S. sales. The company's extremities product sales grew by 8 percent, while its hip, knee and biologics product sales fell by 2 percent, 3.8 percent and 12.4 percent, respectively. The company will focus on its foot and ankle business over the next year, but still expects 2012 sales to fall below the 2011 numbers.


MAKO Surgical ($84.5 million). Full year revenue in 2011 experienced a 91 percent increase over 2010. In the fourth quarter alone, the company's revenue grew by 122 percent to $32.9 million, due in part to the addition of the MAKOplasty total hip arthroplasty applications during the second half of 2011. The company reported its THA application accounted for 44 percent of the domestic commercial installed base in 2011. There were 6,932 MAKOplasty procedures performed in 2011, a 99 percent increase over 2010. The company reported selling eight RIO systems during the fourth quarter, bringing the number of systems installed around the world to 133. In March 2011 the company signed a distribution agreement with Corin Group to use the Metafix Hip System and Trinity Acetabular Shell System with MAKO's RIO Robotic Arm Interactive Orthopedic System

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