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DePuy Synthes reported 3Q20 orthopedic revenue of USD $2,082 million, -2.6% vs. 3Q19. While COVID continues to impact the orthopedic market, procedures resumed more broadly around the world and brought significant improvement in the third quarter. Johnson & Johnson’s Medical Devices franchise saw the fastest recoveries in the U.S. and China, with the U.S. returning to growth in 3Q. However, orthopedics suffered a modest setback in China due to product stocking reductions. The company improved its Medical Device segment and now expects fourth-quarter results between flat and -10%. Last quarter this range spanned flat to -15%.
Within orthopedics, DePuy’s hips and trauma segments continued to outperform its other business. Hip sales in the U.S. grew in the high single digits, driven by procedure recovery, demand for the ACTIS total hip and enabling technologies. U.S. trauma sales grew in the mid-single digits due to newer products like the Femoral Neck System and Cannulated Compression Screws. The knee replacement market improved sequentially compared to 2Q, but recovered slower in OUS regions than other segments, especially within revision procedures. In September, DePuy Synthes submitted a 510(k) pre-market notification to FDA for its VELYS robotic system for total knee replacement.
“In our Medical Devices segment, we anticipate a continued increase in procedures associated with pandemic recovery. We continue to believe in the strong underlying fundamentals in the medical device market, coupled with hospital systems that have successfully navigated the pandemic. Hospitals are much better prepared for any potential COVID resurgence. We remain optimistic heading into 2021.” – Joe Wolk, Johnson & Johnson EVP and CFO
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 3Q20 | 3Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $755.4 | $785.5 | ($30.1) | (3.8%) |
| Knees | $307.0 | $345.0 | ($38.0) | (11%) |
| Hips | $345.0 | $337.0 | $8.0 | 2.4% |
| Extremities | $103.4 | $103.5 | ($0.1) | (0.1%) |
| Spine | $343.7 | $365.7 | ($21.9) | (6%) |
| Trauma | $658.6 | $649.9 | $8.6 | 1.3% |
| Sports Medicine | $150.3 | $156.4 | ($6.1) | (3.9%) |
| Orthobiologics | $93.0 | $97.3 | ($4.3) | (4.4%) |
| Other (CMF) | $81.0 | $82.3 | ($1.3) | (1.6%) |
| Total | $2,082.0 | $2,137.0 | ($55.0) | (2.6%) |
| 9m20 | 9m19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $2,004.5 | $2,461.5 | ($456.9) | (18.6%) |
| Knees | $825.1 | $1,085.0 | ($259.9) | (24%) |
| Hips | $907.7 | $1,061.0 | ($153.3) | (14.4%) |
| Extremities | $271.7 | $315.5 | ($43.7) | (13.9%) |
| Spine | $896.8 | $1,124.5 | ($227.7) | (20.3%) |
| Trauma | $1,816.9 | $1,952.6 | ($135.7) | (7%) |
| Sports Medicine | $394.4 | $477.6 | ($83.2) | (17.4%) |
| Orthobiologics | $243.3 | $298.0 | ($54.7) | (18.4%) |
| Other (CMF) | $215.8 | $249.8 | ($34.0) | (13.6%) |
| Total | $5,571.7 | $6,564.0 | ($992.3) | (15.1%) |
Geographic Sales
| 3Q20 | 3Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,308.0 | $1,300.0 | $8.0 | 0.6% |
| OUS | $774.0 | $837.0 | ($63.0) | (7.5%) |
| EMEA | $339.0 | $382.9 | ($43.9) | (11.5%) |
| Asia Pacific | $282.5 | $297.1 | ($14.6) | (4.9%) |
| Rest of World | $153.3 | $156.9 | ($3.7) | (2.3%) |
| Total | $2,082.0 | $2,137.0 | ($55.0) | (2.6%) |
| 9m20 | 9m19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $3,426.9 | $3,949.0 | ($522.1) | (13.2%) |
| OUS | $2,144.8 | $2,615.0 | ($470.2) | (18%) |
| EMEA | $959.9 | $1,203.0 | ($243.1) | (20.2%) |
| Asia Pacific | $762.0 | $926.1 | ($164.1) | (17.7%) |
| Rest of World | $424.3 | $485.9 | ($61.6) | (12.7%) |
| Total | $5,571.7 | $6,564.0 | ($992.3) | (15.1%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $21,082.0 | |
| Cost of Sales | $6,972.0 | 33.1% |
| Selling and Admin | $5,431.0 | 25.8% |
| R & D | $2,840.0 | 13.5% |
| Other | $2,285.0 | 10.8% |
| Net Earnings | $3,554.0 | 16.9% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
DePuy Synthes reported 3Q20 orthopedic revenue of USD $2,082 million, -2.6% vs. 3Q19. While COVID continues to impact the orthopedic market, procedures resumed more broadly around the world and brought significant improvement in the third quarter. Johnson & Johnson’s Medical Devices franchise saw the fastest recoveries in the U.S. and...
DePuy Synthes reported 3Q20 orthopedic revenue of USD $2,082 million, -2.6% vs. 3Q19. While COVID continues to impact the orthopedic market, procedures resumed more broadly around the world and brought significant improvement in the third quarter. Johnson & Johnson’s Medical Devices franchise saw the fastest recoveries in the U.S. and China, with the U.S. returning to growth in 3Q. However, orthopedics suffered a modest setback in China due to product stocking reductions. The company improved its Medical Device segment and now expects fourth-quarter results between flat and -10%. Last quarter this range spanned flat to -15%.
Within orthopedics, DePuy’s hips and trauma segments continued to outperform its other business. Hip sales in the U.S. grew in the high single digits, driven by procedure recovery, demand for the ACTIS total hip and enabling technologies. U.S. trauma sales grew in the mid-single digits due to newer products like the Femoral Neck System and Cannulated Compression Screws. The knee replacement market improved sequentially compared to 2Q, but recovered slower in OUS regions than other segments, especially within revision procedures. In September, DePuy Synthes submitted a 510(k) pre-market notification to FDA for its VELYS robotic system for total knee replacement.
“In our Medical Devices segment, we anticipate a continued increase in procedures associated with pandemic recovery. We continue to believe in the strong underlying fundamentals in the medical device market, coupled with hospital systems that have successfully navigated the pandemic. Hospitals are much better prepared for any potential COVID resurgence. We remain optimistic heading into 2021.” – Joe Wolk, Johnson & Johnson EVP and CFO
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 3Q20 | 3Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $755.4 | $785.5 | ($30.1) | (3.8%) |
| Knees | $307.0 | $345.0 | ($38.0) | (11%) |
| Hips | $345.0 | $337.0 | $8.0 | 2.4% |
| Extremities | $103.4 | $103.5 | ($0.1) | (0.1%) |
| Spine | $343.7 | $365.7 | ($21.9) | (6%) |
| Trauma | $658.6 | $649.9 | $8.6 | 1.3% |
| Sports Medicine | $150.3 | $156.4 | ($6.1) | (3.9%) |
| Orthobiologics | $93.0 | $97.3 | ($4.3) | (4.4%) |
| Other (CMF) | $81.0 | $82.3 | ($1.3) | (1.6%) |
| Total | $2,082.0 | $2,137.0 | ($55.0) | (2.6%) |
| 9m20 | 9m19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $2,004.5 | $2,461.5 | ($456.9) | (18.6%) |
| Knees | $825.1 | $1,085.0 | ($259.9) | (24%) |
| Hips | $907.7 | $1,061.0 | ($153.3) | (14.4%) |
| Extremities | $271.7 | $315.5 | ($43.7) | (13.9%) |
| Spine | $896.8 | $1,124.5 | ($227.7) | (20.3%) |
| Trauma | $1,816.9 | $1,952.6 | ($135.7) | (7%) |
| Sports Medicine | $394.4 | $477.6 | ($83.2) | (17.4%) |
| Orthobiologics | $243.3 | $298.0 | ($54.7) | (18.4%) |
| Other (CMF) | $215.8 | $249.8 | ($34.0) | (13.6%) |
| Total | $5,571.7 | $6,564.0 | ($992.3) | (15.1%) |
Geographic Sales
| 3Q20 | 3Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,308.0 | $1,300.0 | $8.0 | 0.6% |
| OUS | $774.0 | $837.0 | ($63.0) | (7.5%) |
| EMEA | $339.0 | $382.9 | ($43.9) | (11.5%) |
| Asia Pacific | $282.5 | $297.1 | ($14.6) | (4.9%) |
| Rest of World | $153.3 | $156.9 | ($3.7) | (2.3%) |
| Total | $2,082.0 | $2,137.0 | ($55.0) | (2.6%) |
| 9m20 | 9m19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $3,426.9 | $3,949.0 | ($522.1) | (13.2%) |
| OUS | $2,144.8 | $2,615.0 | ($470.2) | (18%) |
| EMEA | $959.9 | $1,203.0 | ($243.1) | (20.2%) |
| Asia Pacific | $762.0 | $926.1 | ($164.1) | (17.7%) |
| Rest of World | $424.3 | $485.9 | ($61.6) | (12.7%) |
| Total | $5,571.7 | $6,564.0 | ($992.3) | (15.1%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $21,082.0 | |
| Cost of Sales | $6,972.0 | 33.1% |
| Selling and Admin | $5,431.0 | 25.8% |
| R & D | $2,840.0 | 13.5% |
| Other | $2,285.0 | 10.8% |
| Net Earnings | $3,554.0 | 16.9% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
