The underlying fundamentals of the orthopedic industry remain unchanged due to COVID-19. However, we should prepare for significant alterations in the market landscape as well as the ways that we interact with colleagues and customers.
While the company's orthopedic revenues declined in the high single-digits in 1Q20, Zimmer Biomet's balance sheet and cost containment measures will allow it to aggressively pursue key R&D initiatives.
The company managed to drive single-digit growth despite the late-March impact of COVID and expects to be well-positioned to benefit from the inevitable market consolidation occurring due to the pandemic.
Orthopedic sales for the company declined 9.5% in 1Q20 before dropping by nearly half through April. However, the company sees initial recovery signs as countries gradually restart elective procedures.
The second quarter of 2019 brought incremental improvement over the first. Stryker and Medtronic saw revenue growth in the mid-single digits, Smith Nephew performed at 1.6% and DePuy Synthes and Zimmer Biomet experienced a year-over-year loss. Price pressure was a common theme in the quarter for many companies, as it offset some gains made from increased surgical volumes for the reporting period.
Spine is the largest individual segment that we track, accounting for 18.2% of the orthopedic industry's overall revenue. Excluding biologics, sales of orthopedic spine products topped $9.3 billion in 2018, growing +2.7% vs. 2017. Growth in the segment exceeded our expectations, as several companies in the top 10 posted double-digit increases that offset lower performance by manufacturers at the top of the list. Here, we take a deeper look at past, present and forecasted performance.
The first quarter of 2019 brought modest growth to the orthopedic market, as expected seasonal softness and more competition in digital surgery platforms slowed sales for some of the largest players. The 25 companies covered in this article had combined total orthopedic sales of $8.7 billion, growing just 1.1% versus the prior year. While the top two players, DePuy Synthes and Zimmer Biomet, both saw -2% growth, the quarter did feature strong performances by Medtronic (+5%) and Wright Medical (+16%) among the larger players.
The global hip joint replacement market grew 3.2% in 2018 vs. 2017, reaching revenue of USD $7.6 billion. We project that the market will reach $8.9 billion by 2023. In this article, we'll dive deeper into 2018 performance from companies like Zimmer Biomet, Stryker, DePuy Synthes, Smith & Nephew, Medacta and DJO, and review results from 1Q19.
According to our estimates published in THE ORTHOPAEDIC INUSTRY ANNUAL REPORT, orthopedic industry revenue reached $51 billion worldwide in 2018 and grew 3.5% over 2017. Results were mixed among the largest companies as some stumbled operationally while others overperformed, due in part to early adoption of technology and entry into high-growth segments. Common strategic themes present in 2018 that will continue as part of the industry's narrative in 2019 and beyond include connected ecosystems of products, flagship technology (e.g. robotics), portfolio-wide pull through and a growing shift to outpatient procedures.
ORTHOWORLD expects the knee segment to remain a steady performer in the low single digits as price pressure erodes revenue from legacy products, but new technologies and products allow well-positioned companies to drive more favorable sales mix.
Preliminary results for ConforMIS, Orthofix and OrthoPediatrics were mixed. While ConforMI's net revenue for the year grew in the double digits, adjusting for product-only revenue reveals a mostly flat year. Orthofix rode strong spinal implant sales to mid-single-digit growth for the year but was impacted by the slowdown in the biologics market. OrthoPediatrics continued to leverage its leadership position in the pediatric space to achieve aggressive sales growth for both the quarter and year.
In November, we published our downloadable report, 2018 Revenue Projections: Companies Over $200 Million, for the 25 largest orthopaedic companies. Sales for these 25 companies account for ~80% of the worldwide orthopaedic market. We project that these companies will combine for $41 billion in 2018 revenue, +3% vs. 2017.
Several companies noted increased case volume in the third quarter, likely driven by a strong U.S. economy leading to more widespread insurance coverage and patients able to pay for elective procedures. Sales results were mixed outside of the U.S., particularly in the EMEA region where reimbursement issues continue to be a challenge in the U.K. and Germany. Companies generally performed well, however, in emerging markets.
Medartis went public on the SIX Swiss Exchange in March, securing proceeds to fund product development, international expansion and potential acquisitions. Their public launch provided deeper insight into the company's position within the global orthopaedic trauma space. We reviewed Medartis' 2017 and 2018 strategic announcements, and spoke with leadership to get a better sense of the company's recent and future movement.
The 1H18 performance of companies that make up ~80% of the joint reconstruction market achieved 4.1% growth vs. 1H17. These companies posted 2.4% growth in 1H17 vs. 1H16. Here is a look at past activity and future predictions for hip, knee and extremities.
Spine accounts for 18% of the orthopaedic industry's overall revenue. In 2017, sales of spine products (excluding biologics) exceeded $9 billion worldwide, an increase of 2.2% vs. 2016, according to our estimates. The segment remains a story of large, differentiated companies losing market share to the players that derive the majority of their revenue from spine.
SeaSpine announced 2Q18 revenue of US $36.4MM, +6.5% vs. 2Q17, and 1H18 revenue of $69.6MM, +5.3% vs. 1H17. This is the company's highest quarterly growth rate since its spinoff from Integra LifeSciences in 2015.
ORTHOWORLD estimates Stryker's 2Q18 orthopaedic revenue at US $1,747.8MM, +8.0% from 2Q17, and 1H18 revenue at $3,472.6MM, +7.5% vs. 1H17. Trauma and Extremities Joint Recon remain high performers, with Interventional and Tritanium products contributing to strong spine segment growth.
Sales from arthroscopy/soft tissue products in 2017 surpassed $5.3 billion and grew 6.2% vs. 2016, according to our estimates published in THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT. The segment exceeded our projections, partially due to better-than-expected growth by players like DePuy Synthes, Stryker and Zimmer Biomet.
Alongside their 1Q18 results, numerous players reaffirmed or updated their full-year revenue guidance. Globus Medical increased its numbers based on adoption of ExcelsiusGPS, K2M grew its range by $3MM following a distributor partnership and Orthofix upped guidance by about $9MM in acquisition-related contributions. After the quarters close, Wright Medical announced FDA premarket approval for AUGMENT injectable bone graft, and will update its full-year guidance in the 2Q18 call.
Orthopaedic industry revenue reached $49.3 billion worldwide in 2017 and grew at 3.7%, ~$1.7 billion over 2016, according to our estimates to be published in THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT. In 2017, the 20 largest orthopaedic device companies-those with revenue above $200 million-posted growth. That's a statement we haven't made for at least the last three years, and one we think indicates positive momentum in orthopaedics. What fueled this growth? New product launches, acquisitions and international expansion were the most-cited contributors by company executives.