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This chart shows a cross-section of orthopedic-focused players from across the revenue spectrum, ranked by total orthopedic sales in 2021. The secondary axis shows a multi-year average for each company’s research and development spending as a percentage of total orthopedic sales. Both Zimmer Biomet and Smith+Nephew faced portfolio and innovation gaps in 2021, but the causes likely go beyond pure R&D investment.
While both companies are on the lower end of R&D spending as a percentage of revenue, they’re not significantly below Stryker. However, it is worth remembering that Zimmer Biomet and Smith+Nephew developed robotics and digital ecosystems during this period and even then, their R&D spend remained near the bottom (5.6% and 5.7%, respectively).
There are likely other operational challenges at play. In the run-up to Zimmer Biomet spinning off its spine and dental businesses, company leadership talked about the need to better prioritize capital allocation and investment focus. Zimmer Biomet seemingly struggled to forge a cohesive identity and strategy in the face of successive acquisitions and integrations.
Smith+Nephew made both organizational and leadership changes in 2021, a year in which it lost significant market share in knee replacement due in part to a late-arriving cementless option. The company combined its orthopedic and sports medicine businesses, and then parted ways with CEO Roland Diggelmann. Dr. Deepak Nath will be Smith+Nephew’s fourth CEO since 2018.
Average R&D Spend as Percentage of Total Revenue
Related Coverage
- NuVasive plans to grow beyond its roots into a comprehensive spine player
- Globus Medical’s next acquisition is likely to be a modest-sized deal outside of spine
- Orthofix expects to sustain mid-single-digit growth beyond 2022
- ConMed expects hospital ongoing staffing challenges for the market
- ATEC is supremely confident in its growth potential
- Conformis’ royalty revenues accounted for 42% of its 2021 total revenue
- Treace’s bunion pathology expertise has spurred innovation in related pathologies
This chart shows a cross-section of orthopedic-focused players from across the revenue spectrum, ranked by total orthopedic sales in 2021. The secondary axis shows a multi-year average for each company’s research and development spending as a percentage of total orthopedic sales. Both Zimmer Biomet and Smith+Nephew faced portfolio and innovation...
This chart shows a cross-section of orthopedic-focused players from across the revenue spectrum, ranked by total orthopedic sales in 2021. The secondary axis shows a multi-year average for each company’s research and development spending as a percentage of total orthopedic sales. Both Zimmer Biomet and Smith+Nephew faced portfolio and innovation gaps in 2021, but the causes likely go beyond pure R&D investment.
While both companies are on the lower end of R&D spending as a percentage of revenue, they’re not significantly below Stryker. However, it is worth remembering that Zimmer Biomet and Smith+Nephew developed robotics and digital ecosystems during this period and even then, their R&D spend remained near the bottom (5.6% and 5.7%, respectively).
There are likely other operational challenges at play. In the run-up to Zimmer Biomet spinning off its spine and dental businesses, company leadership talked about the need to better prioritize capital allocation and investment focus. Zimmer Biomet seemingly struggled to forge a cohesive identity and strategy in the face of successive acquisitions and integrations.
Smith+Nephew made both organizational and leadership changes in 2021, a year in which it lost significant market share in knee replacement due in part to a late-arriving cementless option. The company combined its orthopedic and sports medicine businesses, and then parted ways with CEO Roland Diggelmann. Dr. Deepak Nath will be Smith+Nephew’s fourth CEO since 2018.
Average R&D Spend as Percentage of Total Revenue
Related Coverage
- NuVasive plans to grow beyond its roots into a comprehensive spine player
- Globus Medical’s next acquisition is likely to be a modest-sized deal outside of spine
- Orthofix expects to sustain mid-single-digit growth beyond 2022
- ConMed expects hospital ongoing staffing challenges for the market
- ATEC is supremely confident in its growth potential
- Conformis’ royalty revenues accounted for 42% of its 2021 total revenue
- Treace’s bunion pathology expertise has spurred innovation in related pathologies
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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.
