Smith & Nephew share price up 25% year over year — CEO Namal Nawana's strategic plan

Spinal Tech

Smith & Nephew share price is up 18 percent in 2019 so far, according to Financial Times, coinciding with Namal Nawana taking over as CEO. 


That may not be a coincidence.

Mr. Nawana has made several changes to the company's operating model, most notably shifting the regional-based sales teams to subspecialty-based divisions focused on orthopedics, sports medicine and wound management. With the business "re-energized," according to Financial Times, share price has grown 25 percent in the past year.

In addition to the structural change, Mr. Nawana also instituted a new mission statement — focused on care, collaboration and courage — to re-boot company culture. Traditionally, the company has shied away from mergers and acquisitions, but over the past year Smith & Nephew has made several strategic deals to grow lines companywide.

Those deals include acquiring:

• Ceterix Orthopaedics for $105 million
• Osiris Therapeutics for $660 million
• Brainlab's orthopedic joint reconstruction business for an undisclosed amount

Going forward, Mr. Nawana sees Smith & Nephew growing its market share. In the past, the company has been at the center of acquisition rumors itself. The company is also growing overseas in places like China and India, which Mr. Nawana feels could experience double-digit growth going forward.

The company has also made the strategic choice to focus on the economics for healthcare in addition to the technology. Financial Times outlined the example of Oxinum, which is used to reduce infections in joint replacements and could lead to savings on the entire episode of care despite a higher-end upfront cost.

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