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Current & Critical

Extremities Market Attracts New Players and Innovation

The extremities market generated worldwide product sales of $6.7 billion in 2014, a 9.5 percent year-over-year increase driven by the absence of payor scrutiny and company saturation, as well as heightened interest from surgeons and patients, according to ORTHOWORLD estimates.

This growth is expected to slow by a percentage point or two in the next five years as the market matures. Still, the extremities market will maintain its position as one of the most attractive sub-segments in the orthopaedic industry for the remainder of the decade. This is evidenced by the number of new players and product innovation that continue to enter the market.

In our research of strategic activity in the space, a notable find was that more than two dozen companies received initial regulatory clearance or took steps to enter the U.S. extremities market during 2014 and the first half of 2015. Most of the new products treat foot/ankle and hand/wrist fractures; that they are mostly trauma-related is unsurprising. ORTHOWORLD estimates that trauma products account for 53 percent of the extremities market, followed by joint replacement, arthroscopy soft tissue and orthobiologics (See Exhibit 1).

An interesting discovery was that three spine product companies—4WEB Medical, Centric Medical (a division of Life Spine) and Eminent Spine—have entered the space.

 


Exhibit 1
Extremities Product Sales by Market Segment




Extremities: Products used to treat clavicle, shoulder, elbow, wrist, hand, ankle and foot across the spectrum of musculoskeletal care—joint reconstruction, trauma, arthroscopy/soft tissue and orthobiologics. 

 

In 4WEB’s case, the company said that it has always viewed its 3D printed truss implant technology as a platform, so the extremities and trauma market was a logical next step. 4WEB hired personnel with development, clinical, marketing and sales backgrounds in extremities to identify the best approach to enter the market.

“The extremities market was very appealing for a couple of reasons,” says Jim Bruty, Senior Vice President, Sales and Marketing, 4WEB. “The volumes of procedures was there. More importantly, there’s a philosophy that if you’re serving an unmet clinical need, you’ll certainly make a name for yourself and add value in the medical device space. That was a huge driver.”

It is expected that the extremities market will
see increased competition from new and current players that seek to capitalize on the high-growth opportunities, especially those in shoulder and ankle.

In addition, the space holds appeal for those seeking to acquire or be acquired. This was seen in 2014 with the proposed merger of Wright Medical and Tornier to combine a strong lower extremity portfolio with a strong upper extremity portfolio, respectively. Further, Stryker’s acquisition of Small Bone Innovations demonstrated how the industry’s top players—DePuy Synthes, Zimmer Biomet, Stryker, Smith & Nephew, Arthrex, DJO, all players in the extremities market—seek to scale to meet customer demand. A pick of one of the large number of companies that serve the extremities market and niche segments, like hammer toe, could make an easy bolt-on transaction.


The latest ORTHOWORLD intelligence report, The Extremities Market: Technologies, Trends and Players, offers fuller perspective on the market and is available at a special Member rate here.