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The largest public players in orthopedics have reported fourth quarter and full-year 2022 results. Below, we’ve highlighted executive commentary around three themes: enabling technology’s important role in implant sales, recent M&A deals that worked and improving surgical procedure volumes.
Enabling Technologies Drive Spine Sales Growth
The capital market for technologies like robotics and imaging changed significantly in 2022 as rentals and earn-out agreements became prevalent. But enabling technology’s impact on revenue remains undiminished. Medtronic credited its recent wins in the spine market to its Aible ecosystem. Globus Medical made international inroads with its technology, while Stryker said it needs a robotic spine application to compete more effectively.
Geoffrey Martha, Medtronic CEO
“Our U.S. implant growth rates have been very strong, especially for our level of market share. What’s driving that is the enabling technology ecosystem. We are winning over the hearts and minds of physicians as they see where we are going, and our real commitment to changing spine surgery with this arsenal of technology.”
Dan Scavilla, Globus Medical CEO
“Enabling technology sales were up 20% on a constant currency basis versus prior year, driven by robotic and imaging system sales. This was our highest quarter since the launch of Enabling. We continue to see increased interest in placements with significant international gains of ExcelsiusGPS in EMEA and the U.K. that we feel will lead to future implant pull-through and strong market share gains.”
Kevin Lobo, Stryker CEO
“The launch of Mako Spine is going to be critical. We had a gap, obviously, with enabling technologies, which is important in the spine segment. I do believe 2023 will be a year where we will continue to grow around the market growth rate and then get ready for the Mako launch to start to grow above market.”
Recent M&A Deals Have Paid Off
Orthofix’s merger with SeaSpine and Globus’ acquisition of NuVasive face complex integrations. However, many orthopedic acquisitions over the last few years have worked better than expected. Stryker’s massive acquisition and integration of Wright Medical is complete. Enovis’ purchase of Mathys helped the company globalize and realize exciting cross-selling opportunities. Finally, NuVasive’s acquisition of the Simplify artificial disc is helping to expand that market.
Jason Beach, Stryker VP of Investor Relations
“We have now passed the two-year mark of the integration of Wright Medical. This has been our largest acquisition to date. Now complete, we have exceeded expectations on our sales and synergy assumptions, as the cultural fit was strong and we implemented our integration playbook very effectively. The deal also drove the creation of three separate business units, allowing us to serve unique customers across core trauma, upper extremities and foot and ankle. All three businesses exited the year with terrific momentum and strong R&D pipelines. Overall, this acquisition has proven to be a great success and we are excited about what the future holds.”
Matt Trerotola, Enovis CEO
“Mathys had a great growth year. Markets were strong in Europe. We’ve got great momentum there in terms of cross-selling opportunities and have had a lot of outreach in that market. We’re connecting surgeons with our KOLs from the U.S. and getting instrument sets sent over — surgeons are trying both the AltiVate and the EMPOWR systems. We received some initial revenue during the back half of last year and we expect the synergies to be a nice contributor this year to the growth of the Mathys business.”
Chris Barry, NuVasive CEO
“We have a leading technology in cTRR, which is probably the fastest expanding space in the spine market today. So we’ve got a lot of runway. Patients want motion preservation and surgeon awareness continues to increase. We think the data that’s associated with this procedure continues to show positive results versus things like ACDF. And the reimbursement gap is closing. It’s not closed yet, but it’s closing. And so those things all give us a lot of confidence that we’ve got opportunities.”
Procedure Volumes Trending in Right Direction
Surgical procedure volumes improved throughout the year, especially in joint replacement. While there is some disagreement in the industry about the presence and size of a patient backlog, most players expect 2023 to bring largely normalized case volumes relative to the period before COVID.
Jason Beach, Stryker VP of Investor Relations
“Procedural volumes continued to recover throughout the fourth quarter in most countries. Parts of Asia-Pacific, however, have continued to be more volatile due to ongoing COVID-related impacts. While volumes are recovering, hospital staffing pressures have continued in pockets around the globe and patient backlog remains.”
Deepak Nath, Smith+Nephew CEO
“We do expect procedure volume to return to normal. We don’t see the procedure volume or the market procedure volume being the rate-limiting step for us. Or said differently, we expect that volumes are back to normal, and we will be operating within that world. This doesn’t mean that hospital systems around the world are challenged for labor shortages or other things, right? And we don’t yet know whether there’ll be another spike in COVID and how that will impact procedures.”
Matt Trerotola, Enovis CEO
“It’s clear that the 2022 recon [reconstructive] markets had a little higher growth than a normal year. We’re expecting the growth this year to be more normal. And I know there are views out there that potentially, there’s a pent-up backlog that could push the recon growth to be higher market levels. If that opportunity presents itself, we’ll be participating in it for sure, but we’re planning for a more normal market environment for recon.”
We expect 2023 to be another challenging and dynamic year. But executive commentary from the fourth quarter highlights significant wins and areas of strength within orthopedics after a tumultuous few years.
The largest public players in orthopedics have reported fourth quarter and full-year 2022 results. Below, we’ve highlighted executive commentary around three themes: enabling technology’s important role in implant sales, recent M&A deals that worked and improving surgical procedure volumes.
Enabling Technologies Drive Spine Sales Growth
The...
The largest public players in orthopedics have reported fourth quarter and full-year 2022 results. Below, we’ve highlighted executive commentary around three themes: enabling technology’s important role in implant sales, recent M&A deals that worked and improving surgical procedure volumes.
Enabling Technologies Drive Spine Sales Growth
The capital market for technologies like robotics and imaging changed significantly in 2022 as rentals and earn-out agreements became prevalent. But enabling technology’s impact on revenue remains undiminished. Medtronic credited its recent wins in the spine market to its Aible ecosystem. Globus Medical made international inroads with its technology, while Stryker said it needs a robotic spine application to compete more effectively.
Geoffrey Martha, Medtronic CEO
“Our U.S. implant growth rates have been very strong, especially for our level of market share. What’s driving that is the enabling technology ecosystem. We are winning over the hearts and minds of physicians as they see where we are going, and our real commitment to changing spine surgery with this arsenal of technology.”
Dan Scavilla, Globus Medical CEO
“Enabling technology sales were up 20% on a constant currency basis versus prior year, driven by robotic and imaging system sales. This was our highest quarter since the launch of Enabling. We continue to see increased interest in placements with significant international gains of ExcelsiusGPS in EMEA and the U.K. that we feel will lead to future implant pull-through and strong market share gains.”
Kevin Lobo, Stryker CEO
“The launch of Mako Spine is going to be critical. We had a gap, obviously, with enabling technologies, which is important in the spine segment. I do believe 2023 will be a year where we will continue to grow around the market growth rate and then get ready for the Mako launch to start to grow above market.”
Recent M&A Deals Have Paid Off
Orthofix’s merger with SeaSpine and Globus’ acquisition of NuVasive face complex integrations. However, many orthopedic acquisitions over the last few years have worked better than expected. Stryker’s massive acquisition and integration of Wright Medical is complete. Enovis’ purchase of Mathys helped the company globalize and realize exciting cross-selling opportunities. Finally, NuVasive’s acquisition of the Simplify artificial disc is helping to expand that market.
Jason Beach, Stryker VP of Investor Relations
“We have now passed the two-year mark of the integration of Wright Medical. This has been our largest acquisition to date. Now complete, we have exceeded expectations on our sales and synergy assumptions, as the cultural fit was strong and we implemented our integration playbook very effectively. The deal also drove the creation of three separate business units, allowing us to serve unique customers across core trauma, upper extremities and foot and ankle. All three businesses exited the year with terrific momentum and strong R&D pipelines. Overall, this acquisition has proven to be a great success and we are excited about what the future holds.”
Matt Trerotola, Enovis CEO
“Mathys had a great growth year. Markets were strong in Europe. We’ve got great momentum there in terms of cross-selling opportunities and have had a lot of outreach in that market. We’re connecting surgeons with our KOLs from the U.S. and getting instrument sets sent over — surgeons are trying both the AltiVate and the EMPOWR systems. We received some initial revenue during the back half of last year and we expect the synergies to be a nice contributor this year to the growth of the Mathys business.”
Chris Barry, NuVasive CEO
“We have a leading technology in cTRR, which is probably the fastest expanding space in the spine market today. So we’ve got a lot of runway. Patients want motion preservation and surgeon awareness continues to increase. We think the data that’s associated with this procedure continues to show positive results versus things like ACDF. And the reimbursement gap is closing. It’s not closed yet, but it’s closing. And so those things all give us a lot of confidence that we’ve got opportunities.”
Procedure Volumes Trending in Right Direction
Surgical procedure volumes improved throughout the year, especially in joint replacement. While there is some disagreement in the industry about the presence and size of a patient backlog, most players expect 2023 to bring largely normalized case volumes relative to the period before COVID.
Jason Beach, Stryker VP of Investor Relations
“Procedural volumes continued to recover throughout the fourth quarter in most countries. Parts of Asia-Pacific, however, have continued to be more volatile due to ongoing COVID-related impacts. While volumes are recovering, hospital staffing pressures have continued in pockets around the globe and patient backlog remains.”
Deepak Nath, Smith+Nephew CEO
“We do expect procedure volume to return to normal. We don’t see the procedure volume or the market procedure volume being the rate-limiting step for us. Or said differently, we expect that volumes are back to normal, and we will be operating within that world. This doesn’t mean that hospital systems around the world are challenged for labor shortages or other things, right? And we don’t yet know whether there’ll be another spike in COVID and how that will impact procedures.”
Matt Trerotola, Enovis CEO
“It’s clear that the 2022 recon [reconstructive] markets had a little higher growth than a normal year. We’re expecting the growth this year to be more normal. And I know there are views out there that potentially, there’s a pent-up backlog that could push the recon growth to be higher market levels. If that opportunity presents itself, we’ll be participating in it for sure, but we’re planning for a more normal market environment for recon.”
We expect 2023 to be another challenging and dynamic year. But executive commentary from the fourth quarter highlights significant wins and areas of strength within orthopedics after a tumultuous few years.
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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.
