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Year in Review

Recapping Your Predictions: Consolidations and Launches as Growth Opportunities

At the dawn of 2017, we published results of an ORTHOWORLD Membership survey in ORTHOKNOW. Among the questions, we asked you to predict: In 2017, where do the opportunities lie for you and your company?

Your responses included new product launches; patient-specific implants and instruments; developments in materials, coatings, robotics and sensors; capability diversification; growth in emerging markets, etc.

Were you right? Yes, companies invested in all manner of these opportunities and more, last year. What did that look like? Here, we recap some the choices made by you and your peers—from the universe of possibilities—to take action and grow your businesses. We’ll touch on two that crossed OEM and supplier lines: company consolidation and single-use product launches.

Consolidation

Survey respondents expected consolidation to be an area of growth and opportunity in 2017, and indeed it was, for both OEMs and suppliers. Among the publicly-announced merger and acquisition activity that we tracked in our database last year were 26 OEM-led transactions and 18 in the supplier arena—the latter primarily contract manufacturers seeking to broaden their capabilities, but with a few testing, packaging, product development, materials and logistics companies getting rolled up, too. ConforMIS and Globus acquired supplier partners within 2017, bringing portions of their manufacturing in-house. (Out of curiosity, I looked at 2016 M&A. In that year, we reported 34 OEM transactions and nine by suppliers. The gap has narrowed, year over year.)

Among OEM deals for which terms were made public in 2017, the largest acquisition was Smith & Nephew’s purchase of Rotation Medical for $210 million, complementing its sports medicine portfolio. Other OEM transactions involved more than broadening implant offerings; purchases were interspersed with neuromonitoring, 3D printing technologies, distributors, data collection systems, surgical navigation software, etc.

Will M&A continue in 2018? Of course it will; there are already three purchases logged in the M&A database in January. (The suppliers are ahead for now, two to one.) The tables below reflect publicly-announced transactions that we tracked in our M&A database last year, affirming your predictions that companies would take the opportunity to grow by acquisition in 2017.


Exhibit 1: OEM M&A Activity in 2017

 Acquirer  Acquired
 Amendia  Spinal Elements
 Arthrex  Sonoma Orthopedic Products
 Arthrosurface  WASAS' acellular dermal stabilization allograft IP
 ChoiceSpine   Exactech's spine assets
 ConforMIS  Broad Peak Manufacturing
 ConMed  MedShape's ACL fixation products
 DePuy Synthes  Interventional Spine assets
 DePuy Synthes  Sentio (Innovative Surgical Solutions dba Sentio)
 DePuy Synthes  Tissue Regeneration's 3D printing technology
 Extera  Medartis
 Globus Medical  KB Medical
 Intellirod Spine  Intellibrace wireless data collection system IP
 IZI Medical Products  Cook Medical's vertebroplasty products
 K2M  Cardinal Spine's cervical VBR
 Kuros Biosurgery  Xpand Biotechnology
 Medacta  Vivimed, Austrian distributor
 NuVasive  SafePassage
 NuVasive  Vertera Spine
 Organogenesis  NuTech Medical (non-spinal assets only)
 OsteoMed  OT Medical's InstaFix assets
 Smith & Nephew  Rotation Medical
 Stryker  Vexim
 Tissue Regenix  CellRight Technologies
 United Orthopedic   A-Spine
 Wenzel Spine  OsteoMed assets, PrimaLOK SP and FF
 Wright Medical  IMASCAP

 

Exhibit 2: Supplier M&A Activity in 2017

 Acquirer  Acquired
 A-Kit  Knight Mechanical Testing
 ARCH Global Precision  Seabrook International
 Avalign Technologies  Millennium Surgical
 Avalign Technologies  Thortex
 Carpenter Technology  Puris 
 Cretex Companies  Quality Tech Services
 Element Materials   Medical Device Testing Services
 In'Tech Medical  Pyxidis
 Kapstone Medical  Loukas Medical
 MedPlast  Vention Medical's device manufacturing assets 
 MinebeaMitsumi   C&A Tool
 Nelipak  Computer Designs
 NN Inc  DRT Medical
 Nordson  Vention Medical's Advanced Technologies
 Sussex Wire  Marox
 TITAN Metal Fabricators  Edge International
 UPS  Marken
 Wytech  Micro-Tube Fabricators

 

Single-Use Product Launches

In a push to deal with surgical site infection, strict regulatory standards for cleaning and overall hospital cost-cutting measures, device companies and suppliers have made a considerable push to move from hospital-sterilized products to single-use, disposable devices. The switch is especially strong in the spine and trauma space. Below, we recap launches made in 2017 involving sterile-packed devices and products.

Exhibit 3: Single-Use Technologies Launched in 2017

 Acquirer  Acquired
 DePuy Synthes  Distal Radius Sterile Kit, an instrument/implant system to treat wrist fracture
 ECA Medical Instruments  Cervical-One instrument set for one- and two-level cervical spine procedures
 Flower Orthopedics  Sterile E-Kits that can replace the instruments in two sterilization trays
 Nextremity Solutions  PiroVue Gastrocnemius Recession instrument kit for ankle equinus deformity
 OsteoMed   InstaFix shape memory fixation system delivered in a disposable, sterile kit
 Paragon 28  JAWS Nitinol staple on a lightweight titanium inserter in a sterile, disposable kit
 SeaSpine  Sterile-packed Vu aPOD Prime NanoMetalene standalone ALIF device
 WishBone Medical  Exact Osteotomy single-use, sterile-packed kits for bone cutting/removal 
 Xenco Medical  Expansion of CerviKit delivery/storage for disposable ACDF systems in ASCs
 Zimmer Biomet  Avenue T TLIF Cage w/self-guided, curved, sterile-packed VerteBRIDGE plates

 

Sources: Company websites, press releases, information in the public domain