Stryker in 2019: 6 things to know

Written by Laura Dyrda | December 27, 2019 | Print  |

Stryker focused on growth this year with multiple acquisitions, while it continued integrating K2M, a spine-focused company it acquired in 2018 for $1.4 billion.

Six things to know about Stryker in the last year:

1. Stryker made several small acquisitions and one major purchase in 2019, beginning in February. The company bought Arrinex , a Menlo Park, Calif.-based company that developed a cryoablation technology for treating chronic rhinitis. In March, it bought OrthoSpace, an Israeli company with technology to treat rotator cuff tears, for up to $220 million. Stryker also added to its robotics portfolio by completing the acquisition of Mobius Imaging, a point-of-care imaging technology, and Cardan Robotics.

2. The biggest splash Stryker made this year came in November, when it announced a definitive agreement to acquire Wright Medical for $4 billion. The small bone-focused company has close to $1 billion in sales and will complement Stryker's trauma and extremities businesses. The companies expect to close the Wright Medical acquisition during the first half of 2020.

3. Stryker brought new leaders on board in the last year, including Rob Fletcher as vice president and chief legal officer in March. He previously spent 15 years with Johnson & Johnson. Stryker debuted a commercial structure realignment after Stuart Simpson, former president of joint replacement, left the company to pursue other career interests. After Mr. Simpson's departure, Spencer Stiles was named group president of orthopedics and spine, overseeing joint replacement, trauma and extremities and spine. J. Andrew Pierce became group president of Medsurg and neurotechnology, overseeing the company's instruments, medical, endoscopy sustainability and neurotechnology.

4. For the nine months end, Stryker reported net sales at $10.7 billion, a 9.7 percent increase over the same period last year. Gross profits reached nearly $7 billion, and net earnings were $1.4 billion. Stryker estimates organic net sales for the year will be up 7.5 percent to 8 percent.

5. Robotics has been part of a core focus for Stryker this year, and in the third quarter it reported Mako Total Knee robotic procedures were up 60 percent year-over-year, hitting 18,000 procedures. Overall, Mako utilization was 27,000 procedures, including partial joint replacements.

"Beyond the knee indication, we also continue to see strong demand for Mako hips, with 40 percent year-over-year growth," said Katherine Owen, vice president of strategy and investor relations, during the third-quarter earnings call based on the transcription from investment researchers Seeking Alpha. "Looking ahead, our Mako order book remains robust and supports our expectation for continued share gains in both hips and knees."

6. Stryker also spent a considerable amount of time integrating K2M into its spine division. CFO Glenn Boehnlein reported on its progress during the third quarter earnings call. "Our spine business saw headwinds during the quarter driven by U.S. sales softness and price erosion," he said. "Our K2M integration efforts are ongoing, and we are ahead of our plan relative to realized cost synergies. Related to our salesforce integration efforts, we are not ramping as quickly as expected, as cross-selling, scaling of rep hires and whole inventory available is taking longer than expected."

CEO Kevin Lobo said Stryker plans to accelerate its spine program in 2020.

More articles on orthopedic devices:
Zimmer Biomet in 2019: 6 things to know
How Stryker plans to grow Mako — 4 insights from chief technology officer Robert Cohen
Medtronic Spine 2019: The year in review

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