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DePuy Synthes reported 2Q20 orthopedic revenue of USD $1,451.7 million, -34.7% vs. 2Q19. While elective procedure restrictions continued to negatively impact the company, second-quarter performance exceeded expectations. Johnson & Johnson revised its outlook for the remainder of 2020. For its Medical Devices business, company leadership expects 3Q procedure volume declines between -10% and -25%, with 4Q declines between 0% and -15%. Pent-up demand in the form of patient backlogs will occur through 2Q and 3Q instead of 4Q. Total negative impact on the Medical Devices business for 2020 will be between -$3.8 billion and -$5.3 billion.
Orthopedics remains among the most pressured business segments due to the deferrable nature of the procedures. However, several regions showed significant improvement versus 1Q results and 2Q expectations. Sales in the U.S. declined only -8% in June, as hip replacements grew in the high single digits and trauma was flat. Knee replacement and spine improved globally, with June declines of -21% and -15% respectively. DePuy Synthes also remains on track for a 2H20 U.S. regulatory submission for the robotics solution central to its VELYS digital surgery platform.
“Our thinking continues to be that, if a second wave occurs, it should not have the same level of global impact that’s been experienced in the last four months. The world is much better prepared. Testing is more readily available. There is an adequate supply of necessary medical equipment. Isolation and other preventative measures are being implemented quickly with more precision. Treatment protocols continue to improve, and there may be therapeutic options available. Finally, a portion of the population will have developed antibodies.” – Joe Wolk, Johnson & Johnson Executive Vice President and Chief Financial Officer
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
| 2Q20 | 2Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $469.7 | $842.0 | ($372.3) | (44.2%) |
| Knees | $174.1 | $371.0 | ($196.9) | (53.1%) |
| Hips | $225.7 | $363.0 | ($137.3) | (37.8%) |
| Extremities | $69.9 | $108.0 | ($38.1) | (35.3%) |
| Spine | $229.7 | $386.9 | ($157.2) | (40.6%) |
| Trauma | $530.5 | $645.1 | ($114.6) | (17.8%) |
| Sports Medicine | $101.4 | $163.6 | ($62.2) | (38%) |
| Orthobiologics | $62.4 | $102.3 | ($39.8) | (39%) |
| Other (CMF) | $58.1 | $84.1 | ($26.1) | (31%) |
| Total | $1,451.7 | $2,224.0 | ($772.3) | (34.7%) |
| 1H20 | 1H19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,249.1 | $1,676.0 | ($426.9) | (25.5%) |
| Knees | $518.1 | $740.0 | ($221.9) | (30%) |
| Hips | $562.7 | $724.0 | ($161.3) | (22.3%) |
| Extremities | $168.3 | $212.0 | ($43.7) | (20.6%) |
| Spine | $553.1 | $758.9 | ($205.8) | (27.1%) |
| Trauma | $1,158.3 | $1,302.7 | ($144.4) | (11.1%) |
| Sports Medicine | $244.1 | $321.2 | ($77.1) | (24%) |
| Orthobiologics | $150.3 | $200.8 | ($50.5) | (25.1%) |
| Other (CMF) | $134.8 | $167.5 | ($32.7) | (19.5%) |
| Total | $3,489.7 | $4,427.0 | ($937.3) | (21.2%) |
Geographic Sales
| 2Q20 | 2Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $868.9 | $1,331.0 | ($462.1) | (34.7%) |
| OUS | $582.8 | $893.0 | ($310.2) | (34.7%) |
| EMEA | $256.4 | $410.8 | ($154.3) | (37.6%) |
| Asia Pacific | $211.6 | $317.0 | ($105.5) | (33.3%) |
| Rest of World | $115.4 | $165.2 | ($49.8) | (30.2%) |
| Total | $1,451.7 | $2,224.0 | ($772.3) | (34.7%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $18,336.0 | |
| Cost of Sales | $6,579.0 | 35.9% |
| Selling and Admin | $4,993.0 | 27.2% |
| R & D | $2,707.0 | 14.8% |
| Other | $431.0 | 2.4% |
| Net Earnings | $3,626.0 | 19.8% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
DePuy Synthes reported 2Q20 orthopedic revenue of USD $1,451.7 million, -34.7% vs. 2Q19. While elective procedure restrictions continued to negatively impact the company, second-quarter performance exceeded expectations. Johnson & Johnson revised its outlook for the remainder of 2020. For its Medical Devices business, company...
DePuy Synthes reported 2Q20 orthopedic revenue of USD $1,451.7 million, -34.7% vs. 2Q19. While elective procedure restrictions continued to negatively impact the company, second-quarter performance exceeded expectations. Johnson & Johnson revised its outlook for the remainder of 2020. For its Medical Devices business, company leadership expects 3Q procedure volume declines between -10% and -25%, with 4Q declines between 0% and -15%. Pent-up demand in the form of patient backlogs will occur through 2Q and 3Q instead of 4Q. Total negative impact on the Medical Devices business for 2020 will be between -$3.8 billion and -$5.3 billion.
Orthopedics remains among the most pressured business segments due to the deferrable nature of the procedures. However, several regions showed significant improvement versus 1Q results and 2Q expectations. Sales in the U.S. declined only -8% in June, as hip replacements grew in the high single digits and trauma was flat. Knee replacement and spine improved globally, with June declines of -21% and -15% respectively. DePuy Synthes also remains on track for a 2H20 U.S. regulatory submission for the robotics solution central to its VELYS digital surgery platform.
“Our thinking continues to be that, if a second wave occurs, it should not have the same level of global impact that’s been experienced in the last four months. The world is much better prepared. Testing is more readily available. There is an adequate supply of necessary medical equipment. Isolation and other preventative measures are being implemented quickly with more precision. Treatment protocols continue to improve, and there may be therapeutic options available. Finally, a portion of the population will have developed antibodies.” – Joe Wolk, Johnson & Johnson Executive Vice President and Chief Financial Officer
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
| 2Q20 | 2Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $469.7 | $842.0 | ($372.3) | (44.2%) |
| Knees | $174.1 | $371.0 | ($196.9) | (53.1%) |
| Hips | $225.7 | $363.0 | ($137.3) | (37.8%) |
| Extremities | $69.9 | $108.0 | ($38.1) | (35.3%) |
| Spine | $229.7 | $386.9 | ($157.2) | (40.6%) |
| Trauma | $530.5 | $645.1 | ($114.6) | (17.8%) |
| Sports Medicine | $101.4 | $163.6 | ($62.2) | (38%) |
| Orthobiologics | $62.4 | $102.3 | ($39.8) | (39%) |
| Other (CMF) | $58.1 | $84.1 | ($26.1) | (31%) |
| Total | $1,451.7 | $2,224.0 | ($772.3) | (34.7%) |
| 1H20 | 1H19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,249.1 | $1,676.0 | ($426.9) | (25.5%) |
| Knees | $518.1 | $740.0 | ($221.9) | (30%) |
| Hips | $562.7 | $724.0 | ($161.3) | (22.3%) |
| Extremities | $168.3 | $212.0 | ($43.7) | (20.6%) |
| Spine | $553.1 | $758.9 | ($205.8) | (27.1%) |
| Trauma | $1,158.3 | $1,302.7 | ($144.4) | (11.1%) |
| Sports Medicine | $244.1 | $321.2 | ($77.1) | (24%) |
| Orthobiologics | $150.3 | $200.8 | ($50.5) | (25.1%) |
| Other (CMF) | $134.8 | $167.5 | ($32.7) | (19.5%) |
| Total | $3,489.7 | $4,427.0 | ($937.3) | (21.2%) |
Geographic Sales
| 2Q20 | 2Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $868.9 | $1,331.0 | ($462.1) | (34.7%) |
| OUS | $582.8 | $893.0 | ($310.2) | (34.7%) |
| EMEA | $256.4 | $410.8 | ($154.3) | (37.6%) |
| Asia Pacific | $211.6 | $317.0 | ($105.5) | (33.3%) |
| Rest of World | $115.4 | $165.2 | ($49.8) | (30.2%) |
| Total | $1,451.7 | $2,224.0 | ($772.3) | (34.7%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $18,336.0 | |
| Cost of Sales | $6,579.0 | 35.9% |
| Selling and Admin | $4,993.0 | 27.2% |
| R & D | $2,707.0 | 14.8% |
| Other | $431.0 | 2.4% |
| Net Earnings | $3,626.0 | 19.8% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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ME
Mike Evers Mike Evers is an 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.
