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Orthopaedic Industry Revenue Reaches $48.1 Billion

Posted in The Top Line | May 2017 | Comments (0)

Tags: kneespinejoint replacement

Orthopaedic industry revenue reached $48.1 billion worldwide in 2016 and grew at 3.2%, ~$1.5 billion over 2015, according to our estimates published in the ORTHOPAEDIC INDUSTRY ANNUAL REPORT®. 

Every market segment and every company has a different performance story. Two narratives that are intertwined are the performance of the top companies—DePuy Synthes, Zimmer Biomet, Stryker, Smith & Nephew and Medtronic—and their correlation specifically to the two largest markets—joint reconstruction and spine. In 2016, joint recon grew 3.6% vs. 2015, up 4% over the prior year, while spine remained flat at 2%. For further clarification, Exhibit 1 below covers product segment revenue performance for 2016 vs. 2015, while Exhibit 2 illustrates market share for each product segment.


Exhibit 1: Product Segment Performance ($Millions)

2016 

2015 

$ Change 

% Change 

  Joint Reconstruction

$17,506.3 

$16,897.6 

$608.7 

3.6% 

  Knee 

$8,540.6 

$8,237.4 

$303.2 

3.7% 

 Hip 

$6,983.6 

$6,825.1 

$158.5 

2.3% 

Extremities 

$1,982.1 

$1,835.0 

$147.1 

8.0% 

  Spine

$8,883.7 

$8,711.4 

$172.3 

2.0% 

  Trauma

$6,614.8 

$6,356.3 

$258.5 

4.1% 

  Arthroscopy/Soft Tissue

$5,009.0 

$4,744.6 

$264.4 

5.6% 

  Orthobiologics

$4,946.2 

$4,800.1 

$146.1 

3.0% 

  Other*

$5,198.3 

$5,147.2 

$51.1 

1.0% 

Total 

$48,158.3 

$46,657.1 

$1,501.2 

3.2% 

    






Exhibit 2: Market Share for Orthopaedic Product Sales

marketshare

 


*Other contains craniomaxillofacial, bone growth stimulation, bracing/soft goods and miscellaneous items like Zimmer Biomet's forgings and Accelero and Stryker's Performance Solutions.

We cover all market segment findings in greater detail in the Annual Report. Within this article, we share a few highlights from the joint recon and spine segments, offering a glimpse of the top-ranked companies by revenue and market share, along with a brief description of main drivers for that segment. The number of companies listed varies from segment to segment, because we wanted to show where the top five companies fell within the ranking, as well as their percent of market share. We know that hundreds of companies impact the orthopaedic industry every day, and we will cover more of those successes in the months to come. For us, a separate look at the top five companies by revenue—DePuy Synthes, Zimmer Biomet, Stryker, Smith & Nephew and Medtronic—is useful alongside the overall industry numbers, because their size offers a high-level view of segment health and most heavily impacts industry performance, and therefore warrants extra attention. For example, the top four companies in the joint recon are the top four companies in the industry. They hold nearly 75% of the joint recon market.

Before we jump into the market segment review, Exhibits 3 and 4 provide guidance on company performance. Of note, DePuy Synthes and Zimmer Biomet achieved sales growth in 2016 after posting a drop in 2015.


Exhibit 3: Total Sales Performance ($Millions)

 

2016 

2015 

$ Change 

% Change 

 DePuy Synthes

$9,003.5 

$8,931.2 

$72.3 

0.8% 

 Zimmer Biomet

$7,100.9 

$6,883.2 

$217.7 

3.2% 

 Stryker

$6,330.8 

$6,034.4 

$296.5 

4.9% 

 Smith & Nephew

$3,250.5 

$3,163.2 

$87.3 

2.8% 

 Medtronic

$2,930.0 

$2,932.0 

-$2.0 

-0.1% 

 10 companies with revenue between $300MM 
 and $2BB
$7,740.31  $7,230.17  $510.14  7.1% 
 24 companies with revenue between $100MM
 and $300MM
$4,201.9  $4,023.3  $178.6  4.4% 

 
Companies with revenue below $100MM

$7,600.4  $7,459.6  $140.8  1.9% 

Total  

$48,158.3 

$46,657.1 

$1,501.2 

3.2% 



Exhibit 4: Total Market Share

    

topmarketshare

 



It’s no secret that the top five continue to execute on the strategy that the deeper their portfolio, the greater their likelihood to secure contracts with hospitals that continue to consolidate vendors. While the top five have prioritized internal restructuring, acquisitions and breadth of product offerings, several companies in the next tiers are seeing success in specialization. Exactech, NuVasive and Wright Medical are top of mind.

For a more detailed look at the activity that drove growth, we provide a brief overview of joint recon and spine on the following page.

 

   

 

 



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