Medtronic, Stryker, Zimmer Biomet, DePuy Synthes, Smith & Nephew: Who had the best 2015? 32 things to know

Written by Laura Dyrda | February 22, 2016 | Print  |

Healthcare themes in 2015 included consolidation, continuum of care integration and diversification; the year was no different for orthopedic device companies.

There were big mergers and acquisitions, repositioning new companies to grow over the next five years. The big device companies made horizontal acquisitions to provide new services or bolster smaller lines. So who had the best 2015?

 

Here are 32 things to know from the largest orthopedic companies.

 

Stryker

 

1. The full year net sales growth was 2.8 percent to $9.9 billion. The reported net earnings increased 179 percent in the full year, reaching $1.4 billion. Organic sales were up 6.1 percent, with top line results coming in above the initial guidance.

2. Stryker expects 2016 sales growth of 5 percent to 6 percent and adjusted net earnings per diluted share to reach $1.17 to $1.22 in the first quarter. For the full year, the company expects adjusted net earnings per diluted share to reach $5.50 to $5.70.

3. Sales in the United States were up 8.4 percent to $7.1 billion. International sales fell, however, 6.9 percent to $2.8 billion in the fourth quarter.

4. In the full year, orthopedics sales hit $4.2 billion, a 1.7 percent increase over 2014. Stryker's MedSurg line net sales were up 3 percent for full year. In the full year the MedSurg net sales hit $3.9 billion. Full year spine and nanotechnology sales jumped 5 percent to $1.8 billion.

 

5. For the full year, sales in the orthopedics specialties hit:

• Knee: up 0.5 percent to $1.4 billion
• Hip: down 2.1 percent to $1.2 billion
• Trauma and extremities: up 4.9 percent to $1.2 billion
• Other: up 13 percent to $266 million
• Spine: up 0.2 percent to $740 million

 

6. Stryker acquired assets from CHG Hospital Beds in January and Muka Metal in July. The company recently had three more acquisitions in February 2016.

 

7. To start the 2015 year, Stryker acquired CHG Hospital Beds and then later in September the company acquired Muka Metal. In 2016, the company acquired three companies in February so far:

 

Zimmer Biomet

 

1. Total net sales were reported as $5.9 billion for the full year, a 28.3 percent increase. Net sales in the Americas were up 41.2 percent in 2015 to $3.6 billion.

2. The knee product sales accounted for $2.2 billion last year, a 20.1 percent increase. Net sales for knee products in the Americas hit $1.3 billion, up 28 percent. The hip product net sales hit $1.5 billion, up 15.9 percent; hip product sales were at $790 million in the Americas for the full year.

3. The company utilized $150 million in the fourth quarter to acquire 1.4 million shares. Smith & Nephew reported $450 million available under the current share repurchase authorization as of Dec. 31, 2015.

4. The constant currency revenue for the full year of 2016 is expected to increase 1.5 percent and 2.5 percent. The company expects foreign currency to translate to a 2 percent revenue decrease this year. Zimmer Biomet expects full year adjusted diluted earnings to hit $7.80 to $7.95.

 

5. Zimmer launched the TKA Outpatient Program in March 2015. The program designs a holistic approach to total knee replacements for hospitals and physicians considering the procedure. The program includes personalized care plans and at-home recovery for select patients. In a study from 2013, there were just 1 percent of the patients who were readmitted within 30 days. Zimmer also launched a new patient education and engagement mobile app for Gel-One.

 

Medtronic

 

1. For the second half of the 2016 fiscal year, Medtronic expects revenue growth in the upper-half of the mid-single digit range. However, the company does expect a negative impact from foreign currency in the second half of around $425 million to $725 million. Medtronic expects fiscal year 2016 diluted non-GAAP EPS in the $4.33 to $4.40 range, including the negative foreign currency impact.

 

2. Medtronic reported $7 billion in worldwide revenue for the quarter, a 6 percent increase over the same period last year. The foreign currency translation had a $452 million negative impact on quarterly revenue.

3. Revenue in the United States jumped 6 percent during the quarter to $4 billion. The United States revenue represented more than half — 58 percent — of the company's overall revenue. Non-United States revenue hit $2 billion, representing 29 percent of company revenue. The non-United States revenue was up 4 percent over the same period last year.

4. Emerging markets revenue topped $908 million, an 11 percent increase over the same period last year. The emerging markets represent 13 percent of company revenue.

5. The spine revenue was flat at $719 million for the quarter and declined 4 percent as reported. The United States spine revenue declined 2 percent. The company's core spine business grew 6 percent outside of the United States. The U.S. core spine business underperformed, declining 4 percent. The company estimates the core spine market grew in the low-single digits. Medtronic's spine business outside of the United States was up 5 percent.

6. Medtronic completed its acquisition of Covidien in January 2015, adding to the restorative therapies group. The RTG worldwide revenue hit $1.7 billion, a 5 percent increase over the same period last year.

 

7. In December of 2015, the FDA approved a new indication for Infuse bone graft. Medtronic can now market the product for certain spine implants made of PEEK in the oblique lateral interbody fusion and anterior lumbar interbody fusion.

 

8. Medtronic continued to launch new spinal products, including the global launch of the CD Horizon Solera Voyager Spinal System in July. The DIVERGENCE Stand Alone Interbody Cage was launched in May and the FDA cleared the SEVO Anterior Cervical Plate System during the same month.

 

Smith & Nephew

 

1. The company's full year revenue jumped to $4.63 billion from $4.61 billion last year. The full year trading and operating profit was $1 million and the trading and operating profit margin was 23.7 percent. The full year revenue in the United States reached $2.2 billion.

 

2. The established markets revenue was down 12 percent to $1.7 billion, but emerging markets were up 11 percent to $715 million. Net debt for the full year was $1.3 billion, down from $1.6 billion at the end of 2014.

3. In 2016 the company expects to exceed a 24 percent trading profit margin, including the 60 bps dilution from investing in Blue Belt Technologies.

4. The company's strategy for the coming year includes continued revenue growth and improving performance through innovation, better commercial execution and efficiency.

 

5. Smith & Nephew continued to work on new hip and shoulder devices, including the SUTUREFIX Ultra all-suture based soft anchor in February. The company acquired Zimmer's unicondylar knee system in the United States market in June.

 

6. The company acquired interactive software technology company from S2 interactive to boost Syncera, the company's hospital and ambulatory surgery center orthopedic supply chain model. The applications include Virtual Backtable and TrayTouch.

 

7. In June, Smith & Nephew received $99 million in a patent infringement judgment against Arthrex. The company's second quarter report recognized more than half of the amount in its Q2 Trading Report. The patient in question was associated with technology to reattach soft tissue to bone, owned by John O. Hayhurst, MD, and licensed exclusively to Smith & Nephew.

DePuy Synthes

1. Full year 2015 orthopedic sales were up 3.5 percent to $5.3 billion in the United States; the worldwide 2015 sales were down 4.3 percent to $9.2 billion.

2. Worldwide hip sales were down 2.5 percent was $1.3 billion; the United States sales were up 4.8 percent to $781 million in 2015.

3. In 2015, knee sales were down 2.4 percent to $1.4 billion; United States sales were up 4.3 percent to $916 million.

4. The United States trauma sales in 2015 were up 3.1 percent to $1.4 billion and worldwide sales were down 4.2 percent to $2.5 billion for the full year.

5. Worldwide spine sales were down 5.5 percent to $3.9 billion in 2015; United States spine sales were up 3 percent to $2.2 billion.

 

More articles on orthopedic devices:
Stryker, Titan Spine, ConforMIS & more: 16 key notes
14 things to know about NuVasive
Amedica to present clinical trial for CASCADE

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