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DePuy Synthes reported 3Q23 orthopedic sales of $2,164 million, +3.3% compared to the third quarter of 2022. For the first nine months of the year, the company generated $6,673.7 million in orthopedic sales, +3.6% compared to the prior year.
Recently launched products, the expansion of VELYS digital solutions and the continuing shift to ASCs drove DePuy Synthes’ growth in the quarter.
Offsetting those gains were the return of more normal seasonality in the third quarter, sanctions in Russia and volume-based procurement in China for spine and trauma products. The company expects orthopedic surgical volumes to remain slightly elevated through 2024.
Notably, Johnson & Johnson announced a two-year restructuring of its orthopedics business designed to simplify and focus operations. As part of the program, the company will exit certain markets and product lines.
Including inventory write-downs, company leadership expects $250 million in revenue disruption during the restructure. That’s about 1.5% of DePuy Synthes’ expected orthopedic sales during that time. The restructuring will cost between $700 million and $800 million.
The company’s spine business seems like an obvious candidate for change after enduring several years of punishing losses. Meanwhile, VBP in China definitely overhauled the margin profile there, but Johnson & Johnson remains committed to the Chinese market.
“China is a key market for us,” said Johnson & Johnson CEO Joaquin Duato. “VBP represents a headwind in price. On the other hand, it also represents an opportunity as you can expand quality products and medical technologies to more patients. About 80% of our platforms have already been affected by VBP. As we look into 2024, we expect China to remain a key part of our growth.”
Orthopedic Sales Data
All orthopedic sales data is provided in USD millions unless otherwise noted. We estimate orthopedic sales and growth on an as-reported basis.
Orthopedic Sales by Segment
| 3Q23 | 3Q22 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $858.6 | $804.0 | $54.5 | 6.8% |
| Knees | $338.0 | $316.5 | $21.5 | 6.8% |
| Hips | $375.0 | $352.8 | $22.2 | 6.3% |
| Extremities | $145.6 | $134.7 | $10.8 | 8% |
| Spine | $191.7 | $212.2 | ($20.5) | (9.7%) |
| Trauma | $652.1 | $637.5 | $14.6 | 2.3% |
| Sports Medicine | $234.3 | $226.9 | $7.4 | 3.3% |
| Orthobiologics | $88.8 | $85.1 | $3.7 | 4.3% |
| Enabling Technology | $16.3 | $14.2 | $2.2 | 15.2% |
| Other | $122.3 | $114.7 | $7.6 | 6.6% |
| Total | $2,164.0 | $2,094.6 | $69.4 | 3.3% |
| 9m23 | 9m22 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $2,661.0 | $2,513.5 | $147.6 | 5.9% |
| Knees | $1,069.4 | $1,005.0 | $64.4 | 6.4% |
| Hips | $1,162.4 | $1,129.8 | $32.6 | 2.9% |
| Extremities | $429.2 | $378.6 | $50.6 | 13.4% |
| Spine | $711.8 | $729.4 | ($17.6) | (2.4%) |
| Trauma | $1,987.1 | $1,919.1 | $68.0 | 3.5% |
| Sports Medicine | $697.4 | $657.6 | $39.9 | 6.1% |
| Orthobiologics | $253.2 | $257.3 | ($4.1) | (1.6%) |
| Enabling Technology | $52.2 | $39.3 | $12.9 | 32.9% |
| Other | $311.0 | $323.7 | ($12.7) | (3.9%) |
| Total | $6,673.7 | $6,439.7 | $234.0 | 3.6% |
Orthopedic Sales by Geography
| 3Q23 | 3Q22 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,349.0 | $1,309.8 | $39.2 | 3% |
| OUS | $815.0 | $784.8 | $30.2 | 3.8% |
| EMEA | $374.9 | $346.1 | $28.8 | 8.3% |
| APAC | $260.8 | $277.0 | ($16.2) | (5.9%) |
| ROW | $179.3 | $161.7 | $17.6 | 10.9% |
| Total | $2,164.0 | $2,094.6 | $69.4 | 3.3% |
| 9m23 | 9m22 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $4,100.3 | $3,936.4 | $163.9 | 4.2% |
| OUS | $2,573.5 | $2,503.4 | $70.1 | 2.8% |
| EMEA | $1,198.8 | $1,104.7 | $94.0 | 8.5% |
| APAC | $873.7 | $909.6 | ($35.9) | (4%) |
| ROW | $501.1 | $489.0 | $12.0 | 2.5% |
| Total | $6,673.7 | $6,439.7 | $234.0 | 3.6% |
Company Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $21,351.0 | |
| Cost of Sales | $6,606.0 | 30.9% |
| Selling and Admin | $5,400.0 | 25.3% |
| R & D | $3,447.0 | 16.1% |
| Other | $1,589.0 | 7.4% |
| Net Earnings | $4,309.0 | 20.2% |
DePuy Synthes reported 3Q23 orthopedic sales of $2,164 million, +3.3% compared to the third quarter of 2022. For the first nine months of the year, the company generated $6,673.7 million in orthopedic sales, +3.6% compared to the prior year.
Recently launched products, the expansion of VELYS digital solutions and the continuing shift to...
DePuy Synthes reported 3Q23 orthopedic sales of $2,164 million, +3.3% compared to the third quarter of 2022. For the first nine months of the year, the company generated $6,673.7 million in orthopedic sales, +3.6% compared to the prior year.
Recently launched products, the expansion of VELYS digital solutions and the continuing shift to ASCs drove DePuy Synthes’ growth in the quarter.
Offsetting those gains were the return of more normal seasonality in the third quarter, sanctions in Russia and volume-based procurement in China for spine and trauma products. The company expects orthopedic surgical volumes to remain slightly elevated through 2024.
Notably, Johnson & Johnson announced a two-year restructuring of its orthopedics business designed to simplify and focus operations. As part of the program, the company will exit certain markets and product lines.
Including inventory write-downs, company leadership expects $250 million in revenue disruption during the restructure. That’s about 1.5% of DePuy Synthes’ expected orthopedic sales during that time. The restructuring will cost between $700 million and $800 million.
The company’s spine business seems like an obvious candidate for change after enduring several years of punishing losses. Meanwhile, VBP in China definitely overhauled the margin profile there, but Johnson & Johnson remains committed to the Chinese market.
“China is a key market for us,” said Johnson & Johnson CEO Joaquin Duato. “VBP represents a headwind in price. On the other hand, it also represents an opportunity as you can expand quality products and medical technologies to more patients. About 80% of our platforms have already been affected by VBP. As we look into 2024, we expect China to remain a key part of our growth.”
Orthopedic Sales Data
All orthopedic sales data is provided in USD millions unless otherwise noted. We estimate orthopedic sales and growth on an as-reported basis.
Orthopedic Sales by Segment
| 3Q23 | 3Q22 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $858.6 | $804.0 | $54.5 | 6.8% |
| Knees | $338.0 | $316.5 | $21.5 | 6.8% |
| Hips | $375.0 | $352.8 | $22.2 | 6.3% |
| Extremities | $145.6 | $134.7 | $10.8 | 8% |
| Spine | $191.7 | $212.2 | ($20.5) | (9.7%) |
| Trauma | $652.1 | $637.5 | $14.6 | 2.3% |
| Sports Medicine | $234.3 | $226.9 | $7.4 | 3.3% |
| Orthobiologics | $88.8 | $85.1 | $3.7 | 4.3% |
| Enabling Technology | $16.3 | $14.2 | $2.2 | 15.2% |
| Other | $122.3 | $114.7 | $7.6 | 6.6% |
| Total | $2,164.0 | $2,094.6 | $69.4 | 3.3% |
| 9m23 | 9m22 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $2,661.0 | $2,513.5 | $147.6 | 5.9% |
| Knees | $1,069.4 | $1,005.0 | $64.4 | 6.4% |
| Hips | $1,162.4 | $1,129.8 | $32.6 | 2.9% |
| Extremities | $429.2 | $378.6 | $50.6 | 13.4% |
| Spine | $711.8 | $729.4 | ($17.6) | (2.4%) |
| Trauma | $1,987.1 | $1,919.1 | $68.0 | 3.5% |
| Sports Medicine | $697.4 | $657.6 | $39.9 | 6.1% |
| Orthobiologics | $253.2 | $257.3 | ($4.1) | (1.6%) |
| Enabling Technology | $52.2 | $39.3 | $12.9 | 32.9% |
| Other | $311.0 | $323.7 | ($12.7) | (3.9%) |
| Total | $6,673.7 | $6,439.7 | $234.0 | 3.6% |
Orthopedic Sales by Geography
| 3Q23 | 3Q22 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,349.0 | $1,309.8 | $39.2 | 3% |
| OUS | $815.0 | $784.8 | $30.2 | 3.8% |
| EMEA | $374.9 | $346.1 | $28.8 | 8.3% |
| APAC | $260.8 | $277.0 | ($16.2) | (5.9%) |
| ROW | $179.3 | $161.7 | $17.6 | 10.9% |
| Total | $2,164.0 | $2,094.6 | $69.4 | 3.3% |
| 9m23 | 9m22 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $4,100.3 | $3,936.4 | $163.9 | 4.2% |
| OUS | $2,573.5 | $2,503.4 | $70.1 | 2.8% |
| EMEA | $1,198.8 | $1,104.7 | $94.0 | 8.5% |
| APAC | $873.7 | $909.6 | ($35.9) | (4%) |
| ROW | $501.1 | $489.0 | $12.0 | 2.5% |
| Total | $6,673.7 | $6,439.7 | $234.0 | 3.6% |
Company Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $21,351.0 | |
| Cost of Sales | $6,606.0 | 30.9% |
| Selling and Admin | $5,400.0 | 25.3% |
| R & D | $3,447.0 | 16.1% |
| Other | $1,589.0 | 7.4% |
| Net Earnings | $4,309.0 | 20.2% |
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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.
