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The spine market surpassed $10.4 billion in sales in 2023 and accounted for 18% of global orthopedic sales. It is the largest individual segment by sales, number of product launches, M&A transactions and investment activity. Its reach extends deep into the orthobiologic and enabling technology segments.
Significant change came to the behemoth segment in recent years, however. Below, we’ll take a look at three of the trends driving that change: consolidation among the largest spine players, shifts in competitive balance due to enabling technology and breakthrough implant technologies.
Consolidation Brings Longtail Disruption to Market
Spine accounts for more than 27% of all orthopedic merger and acquisition activity over the last decade. Even this likely understates spine’s influence on M&A, given the steady increase in digitally focused transactions and their significant carryover to spine. The next highest segment is trauma at 17%, thanks in part to foot-and-ankle’s consolidation peak around the pandemic.
While overall M&A has slowed significantly, spine still provided some of the most consequential deals in the orthopedic industry’s recent history. Globus Medical and Orthofix shook up the market with their respective mergers, while privately-held Highridge Medical emerged out of ZimVie’s spine assets.
Conventional wisdom says spine integrations are notoriously difficult. They’ve certainly provided some cautionary tales over the years. Both DePuy Synthes and Zimmer Biomet stumbled along for years with underperforming spine businesses, due in part to unfocused acquisitions. More recently, Stryker’s integration of K2M languished through rough patches.
“As it relates to the disruption in the marketplace,” said ATEC CEO Pat Miles, “we face an unprecedented market opportunity. These things happen over a period of time. There’s a great proxy out there with regard to Stryker/K2M. It was a dynamic that transpired over multiple years. We expect this to continue over the coming years, and cannot be more excited about it.”
But, judging from second quarter executive commentary, the disruption isn’t a one-way street. Several companies sounded bullish on competitive recruiting within the upended spine market.
ATEC is adding reps taken from Globus Medical, Medtronic and DePuy Synthes. Meanwhile, Globus said 2024 could be a record recruiting year as it attracts competitive reps with over 10 years of tenure, once a rarity to recruit. Orthofix also upgraded its distribution, with 15% of its second quarter revenue coming from new distributors.
Enabling Technology Shift Competitive Dynamics
Scale alone is no longer enough to compete at the top levels of spine. Enabling technology’s role is expanding across orthopedics, but it has become a strategic necessity for the market’s biggest players.
Stryker once called enabling technology the “ticket to the dance” in spine, and they would know. The company eked out just 2.8% growth in its spine business from 2019 to 2023. While market conditions played a role, Stryker said that gaps in its enabling technology portfolio kept it from growing in line with or above the market average.
The company took important steps in 2024 to close those gaps. Its already-available Q Guidance system will soon pair with Stryker’s new Spine Guidance 5 Software featuring Copilot, which introduces smart powered instruments to the guidance ecosystem. Mako Spine is on track to launch at some point in the fourth quarter.
Mid-tier and smaller companies recognize the value of technology in spine surgery, as well. ATEC launched EOS Insight, an integrated platform of point-of-care applications. Orthofix sees the 7D FLASH Navigation system as a foundational product in spine and a candidate to drive penetration of navigated procedures.
Meanwhile, Augmedics closed more than $82 million in financing during the second quarter of 2024 to further develop its augmented reality xvision Spine System.
Metal and plastic are still the core of the spine market, no doubt about it. However, technology is rapidly changing the competitive dynamics of spine. As more surgeons adopt enabling technology, device companies will be under more pressure to offer full-featured and tightly integrated ecosystems.
“Accounts are making investments in a company now,” said Medtronic CEO Geoffrey Martha. “The Medtronic ecosystem versus some other ecosystem, and there’s not many out there. It’s also changing the industry structure because it takes a lot of expertise and capital to build these ecosystems. You don’t have this long tail of tiny spine companies that are preying on docs. Those are going away.”
Smaller Players Developing Breakthrough Devices
Nearly 29% of all orthopedic investments made since 2016 went to spine companies. The next highest category is enabling technology, a segment with significant spine overlap, at 19%.
Despite a challenging funding environment, spine is on pace for 14 funding announcements in 2024. That would be its second-highest total in nearly a decade. Carlsmed, Synergy Spine and Spineology led notable raises so far this year.
Some of the companies that received funding went on to develop innovative new products that achieved FDA breakthrough device designations. FDA awarded five breakthrough designations to spine companies so far in 2024, with three more going to orthobiologics. The five spine designations include:
- Bioretec’s biodegradable RemeOS interbody cage
- Canary Medical’s Canturio Lumbar Cartridge that includes data collection
- MiRus’ EUROPA Posterior Cervical System based on its proprietary rhenium alloy
- OrthoPediatrics’ eLLi Growing Rod to address severe pathology in early onset scoliosis
- SI-BONE’s iFuse TORQ TNT implant for pelvic fragility fracture and sacroiliac joint fusion
These products join Carlsmed’s aprevo and Premia Spine’s TOPS System as recent breakthrough spine products. Orthobiologics from Medtronic, ORTHOSON and Renovos round out the 2024 designations.
These products will enter a spine market that has largely normalized in terms of procedure volume and demand. The public companies we track on a quarterly basis posted impressive spine sales growth in the first half, implying more consolidation of share among the market’s largest players.
The influence of consolidation as well as new digital and implant technologies will play out over the next several years in the spine market as it evolves and modernizes at the forefront of orthopedics.
The spine market surpassed $10.4 billion in sales in 2023 and accounted for 18% of global orthopedic sales. It is the largest individual segment by sales, number of product launches, M&A transactions and investment activity. Its reach extends deep into the orthobiologic and enabling technology segments.
Significant change came to the...
The spine market surpassed $10.4 billion in sales in 2023 and accounted for 18% of global orthopedic sales. It is the largest individual segment by sales, number of product launches, M&A transactions and investment activity. Its reach extends deep into the orthobiologic and enabling technology segments.
Significant change came to the behemoth segment in recent years, however. Below, we’ll take a look at three of the trends driving that change: consolidation among the largest spine players, shifts in competitive balance due to enabling technology and breakthrough implant technologies.
Consolidation Brings Longtail Disruption to Market
Spine accounts for more than 27% of all orthopedic merger and acquisition activity over the last decade. Even this likely understates spine’s influence on M&A, given the steady increase in digitally focused transactions and their significant carryover to spine. The next highest segment is trauma at 17%, thanks in part to foot-and-ankle’s consolidation peak around the pandemic.
While overall M&A has slowed significantly, spine still provided some of the most consequential deals in the orthopedic industry’s recent history. Globus Medical and Orthofix shook up the market with their respective mergers, while privately-held Highridge Medical emerged out of ZimVie’s spine assets.
Conventional wisdom says spine integrations are notoriously difficult. They’ve certainly provided some cautionary tales over the years. Both DePuy Synthes and Zimmer Biomet stumbled along for years with underperforming spine businesses, due in part to unfocused acquisitions. More recently, Stryker’s integration of K2M languished through rough patches.
“As it relates to the disruption in the marketplace,” said ATEC CEO Pat Miles, “we face an unprecedented market opportunity. These things happen over a period of time. There’s a great proxy out there with regard to Stryker/K2M. It was a dynamic that transpired over multiple years. We expect this to continue over the coming years, and cannot be more excited about it.”
But, judging from second quarter executive commentary, the disruption isn’t a one-way street. Several companies sounded bullish on competitive recruiting within the upended spine market.
ATEC is adding reps taken from Globus Medical, Medtronic and DePuy Synthes. Meanwhile, Globus said 2024 could be a record recruiting year as it attracts competitive reps with over 10 years of tenure, once a rarity to recruit. Orthofix also upgraded its distribution, with 15% of its second quarter revenue coming from new distributors.
Enabling Technology Shift Competitive Dynamics
Scale alone is no longer enough to compete at the top levels of spine. Enabling technology’s role is expanding across orthopedics, but it has become a strategic necessity for the market’s biggest players.
Stryker once called enabling technology the “ticket to the dance” in spine, and they would know. The company eked out just 2.8% growth in its spine business from 2019 to 2023. While market conditions played a role, Stryker said that gaps in its enabling technology portfolio kept it from growing in line with or above the market average.
The company took important steps in 2024 to close those gaps. Its already-available Q Guidance system will soon pair with Stryker’s new Spine Guidance 5 Software featuring Copilot, which introduces smart powered instruments to the guidance ecosystem. Mako Spine is on track to launch at some point in the fourth quarter.
Mid-tier and smaller companies recognize the value of technology in spine surgery, as well. ATEC launched EOS Insight, an integrated platform of point-of-care applications. Orthofix sees the 7D FLASH Navigation system as a foundational product in spine and a candidate to drive penetration of navigated procedures.
Meanwhile, Augmedics closed more than $82 million in financing during the second quarter of 2024 to further develop its augmented reality xvision Spine System.
Metal and plastic are still the core of the spine market, no doubt about it. However, technology is rapidly changing the competitive dynamics of spine. As more surgeons adopt enabling technology, device companies will be under more pressure to offer full-featured and tightly integrated ecosystems.
“Accounts are making investments in a company now,” said Medtronic CEO Geoffrey Martha. “The Medtronic ecosystem versus some other ecosystem, and there’s not many out there. It’s also changing the industry structure because it takes a lot of expertise and capital to build these ecosystems. You don’t have this long tail of tiny spine companies that are preying on docs. Those are going away.”
Smaller Players Developing Breakthrough Devices
Nearly 29% of all orthopedic investments made since 2016 went to spine companies. The next highest category is enabling technology, a segment with significant spine overlap, at 19%.
Despite a challenging funding environment, spine is on pace for 14 funding announcements in 2024. That would be its second-highest total in nearly a decade. Carlsmed, Synergy Spine and Spineology led notable raises so far this year.
Some of the companies that received funding went on to develop innovative new products that achieved FDA breakthrough device designations. FDA awarded five breakthrough designations to spine companies so far in 2024, with three more going to orthobiologics. The five spine designations include:
- Bioretec’s biodegradable RemeOS interbody cage
- Canary Medical’s Canturio Lumbar Cartridge that includes data collection
- MiRus’ EUROPA Posterior Cervical System based on its proprietary rhenium alloy
- OrthoPediatrics’ eLLi Growing Rod to address severe pathology in early onset scoliosis
- SI-BONE’s iFuse TORQ TNT implant for pelvic fragility fracture and sacroiliac joint fusion
These products join Carlsmed’s aprevo and Premia Spine’s TOPS System as recent breakthrough spine products. Orthobiologics from Medtronic, ORTHOSON and Renovos round out the 2024 designations.
These products will enter a spine market that has largely normalized in terms of procedure volume and demand. The public companies we track on a quarterly basis posted impressive spine sales growth in the first half, implying more consolidation of share among the market’s largest players.
The influence of consolidation as well as new digital and implant technologies will play out over the next several years in the spine market as it evolves and modernizes at the forefront of orthopedics.
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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.
