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DePuy Synthes reported 4Q19 orthopedic revenue of USD $2,275 million, +0.6% vs. 4Q18, with full year 2019 revenue of $8,839 million, -0.5% vs. 2018. Company management noted positive momentum in orthopedics and overall franchise improvement compared to 2018. DePuy Synthes’ parent company, Johnson & Johnson, has strengthened its commitment to and investments in digital surgery across its Medical Devices business in 2019.
Within orthopedics, the VELYS system will eventually integrate the Orthotaxy robotics platform with next-generation instruments, surgical planning and navigation. Company leadership is excited about the longer-term transformative promise of artificial intelligence as it relates to helping surgeons and health systems drive better patient selection, efficiency and outcomes. Johnson & Johnson will talk more about their digital surgery initiatives during their Medical Device Business Review Day on May 13, 2019.
- Improvement in the knee replacement franchise was driven by the launches of ATTUNE Revision, ATTUNE S+ and the ATTUNE Cementless rotation platform
- Knee replacement growth was led by the Asia Pacific region while the U.S. returned to growth in 4Q
- Hip replacement growth was driven by continuing uptake of the ACTIS Total Hip System was well as enabling technology like the KINCISE Surgical Automated System and Joint Point navigation
- The Orthotaxy robotic-assisted surgery system is progressing toward a mid-2020 regulatory submission
- S. share loss in spine was compounded by the comparison impact of a one-time pricing adjustment that occurred in 4Q18
- Management believes late-2019 spine launches like the SYMPHONY posterior system will drive franchise improvements in 2020
“One of the most important areas is our data sciences capabilities. As it relates to Medical Devices, this next generation is certainly about the robotics component that helps facilitate having more consistency in an exact procedure, perhaps getting into a tighter space, and having better access. But we think, longer term, the digital AI component can help pre-operatively and develop a very detailed plan, even being applied intra-operatively through guidance systems.” – Johnson & Johnson Chairman and CEO Alex Gorsky on the benefits of artificial intelligence in digital surgery.
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
| 4Q19 | 4Q18 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $895.8 | $882.9 | $12.9 | 1.5% |
| Knees | $403.2 | $400.3 | $2.9 | 0.7% |
| Hips | $385.2 | $373.3 | $11.9 | 3.2% |
| Extremities | $107.4 | $109.3 | ($1.8) | (1.7%) |
| Spine | $344.2 | $365.4 | ($21.3) | (5.8%) |
| Trauma | $656.4 | $643.9 | $12.5 | 1.9% |
| Sports Medicine | $185.9 | $176.4 | $9.4 | 5.3% |
| Orthobiologics | $102.1 | $103.9 | ($1.8) | (1.7%) |
| Other (CMF) | $90.7 | $89.5 | $1.2 | 1.3% |
| Total | $2,275.0 | $2,262.0 | $13.0 | 0.6% |
| FY19 | FY18 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $3,403.0 | $3,414.8 | ($11.8) | (0.3%) |
| Knees | $1,512.0 | $1,534.7 | ($22.6) | (1.5%) |
| Hips | $1,470.0 | $1,450.7 | $19.4 | 1.3% |
| Extremities | $420.9 | $429.5 | ($8.5) | (2%) |
| Spine | $1,407.0 | $1,458.1 | ($51.2) | (3.5%) |
| Trauma | $2,604.0 | $2,580.6 | $23.4 | 0.9% |
| Sports Medicine | $669.7 | $663.4 | $6.2 | 0.9% |
| Orthobiologics | $400.1 | $408.3 | ($8.1) | (2%) |
| Other (CMF) | $355.3 | $359.8 | ($4.5) | (1.2%) |
| Total | $8,839.0 | $8,885.0 | ($46.0) | (0.5%) |
Geographic Sales
| Geographic Region | 4Q19 | 4Q18 | $ Chg | % Chg |
|---|---|---|---|---|
| US | $1,370.0 | $1,358.0 | $12.0 | 0.9% |
| Ex-US | $905.0 | $904.0 | $1.0 | 0.1% |
| EMEA | $407.3 | $406.8 | $0.4 | 0.1% |
| Asia Pacific | $321.3 | $316.4 | $4.9 | 1.5% |
| Rest of World | $176.5 | $180.8 | ($4.3) | (2.4%) |
| Total | $2,275.0 | $2,262.0 | $13.0 | 0.6% |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $20,747.0 | |
| Cost of Sales | ($7,134.0) | 34.4% |
| Selling and Admin | ($6,039.0) | 29.1% |
| R & D | ($3,232.0) | 15.6% |
| Other | ($332.0) | 1.6% |
| Net Earnings | $4,010.0 | 19.3% |
Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.
DePuy Synthes reported 4Q19 orthopedic revenue of USD $2,275 million, +0.6% vs. 4Q18, with full year 2019 revenue of $8,839 million, -0.5% vs. 2018. Company management noted positive momentum in orthopedics and overall franchise improvement compared to 2018. DePuy Synthes’ parent company, Johnson & Johnson, has strengthened its...
DePuy Synthes reported 4Q19 orthopedic revenue of USD $2,275 million, +0.6% vs. 4Q18, with full year 2019 revenue of $8,839 million, -0.5% vs. 2018. Company management noted positive momentum in orthopedics and overall franchise improvement compared to 2018. DePuy Synthes’ parent company, Johnson & Johnson, has strengthened its commitment to and investments in digital surgery across its Medical Devices business in 2019.
Within orthopedics, the VELYS system will eventually integrate the Orthotaxy robotics platform with next-generation instruments, surgical planning and navigation. Company leadership is excited about the longer-term transformative promise of artificial intelligence as it relates to helping surgeons and health systems drive better patient selection, efficiency and outcomes. Johnson & Johnson will talk more about their digital surgery initiatives during their Medical Device Business Review Day on May 13, 2019.
- Improvement in the knee replacement franchise was driven by the launches of ATTUNE Revision, ATTUNE S+ and the ATTUNE Cementless rotation platform
- Knee replacement growth was led by the Asia Pacific region while the U.S. returned to growth in 4Q
- Hip replacement growth was driven by continuing uptake of the ACTIS Total Hip System was well as enabling technology like the KINCISE Surgical Automated System and Joint Point navigation
- The Orthotaxy robotic-assisted surgery system is progressing toward a mid-2020 regulatory submission
- S. share loss in spine was compounded by the comparison impact of a one-time pricing adjustment that occurred in 4Q18
- Management believes late-2019 spine launches like the SYMPHONY posterior system will drive franchise improvements in 2020
“One of the most important areas is our data sciences capabilities. As it relates to Medical Devices, this next generation is certainly about the robotics component that helps facilitate having more consistency in an exact procedure, perhaps getting into a tighter space, and having better access. But we think, longer term, the digital AI component can help pre-operatively and develop a very detailed plan, even being applied intra-operatively through guidance systems.” – Johnson & Johnson Chairman and CEO Alex Gorsky on the benefits of artificial intelligence in digital surgery.
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
| 4Q19 | 4Q18 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $895.8 | $882.9 | $12.9 | 1.5% |
| Knees | $403.2 | $400.3 | $2.9 | 0.7% |
| Hips | $385.2 | $373.3 | $11.9 | 3.2% |
| Extremities | $107.4 | $109.3 | ($1.8) | (1.7%) |
| Spine | $344.2 | $365.4 | ($21.3) | (5.8%) |
| Trauma | $656.4 | $643.9 | $12.5 | 1.9% |
| Sports Medicine | $185.9 | $176.4 | $9.4 | 5.3% |
| Orthobiologics | $102.1 | $103.9 | ($1.8) | (1.7%) |
| Other (CMF) | $90.7 | $89.5 | $1.2 | 1.3% |
| Total | $2,275.0 | $2,262.0 | $13.0 | 0.6% |
| FY19 | FY18 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $3,403.0 | $3,414.8 | ($11.8) | (0.3%) |
| Knees | $1,512.0 | $1,534.7 | ($22.6) | (1.5%) |
| Hips | $1,470.0 | $1,450.7 | $19.4 | 1.3% |
| Extremities | $420.9 | $429.5 | ($8.5) | (2%) |
| Spine | $1,407.0 | $1,458.1 | ($51.2) | (3.5%) |
| Trauma | $2,604.0 | $2,580.6 | $23.4 | 0.9% |
| Sports Medicine | $669.7 | $663.4 | $6.2 | 0.9% |
| Orthobiologics | $400.1 | $408.3 | ($8.1) | (2%) |
| Other (CMF) | $355.3 | $359.8 | ($4.5) | (1.2%) |
| Total | $8,839.0 | $8,885.0 | ($46.0) | (0.5%) |
Geographic Sales
| Geographic Region | 4Q19 | 4Q18 | $ Chg | % Chg |
|---|---|---|---|---|
| US | $1,370.0 | $1,358.0 | $12.0 | 0.9% |
| Ex-US | $905.0 | $904.0 | $1.0 | 0.1% |
| EMEA | $407.3 | $406.8 | $0.4 | 0.1% |
| Asia Pacific | $321.3 | $316.4 | $4.9 | 1.5% |
| Rest of World | $176.5 | $180.8 | ($4.3) | (2.4%) |
| Total | $2,275.0 | $2,262.0 | $13.0 | 0.6% |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $20,747.0 | |
| Cost of Sales | ($7,134.0) | 34.4% |
| Selling and Admin | ($6,039.0) | 29.1% |
| R & D | ($3,232.0) | 15.6% |
| Other | ($332.0) | 1.6% |
| Net Earnings | $4,010.0 | 19.3% |
Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.
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ME
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.
