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Smith+Nephew reported 3Q21 orthopedic sales of $868.5 million, +2.7% vs. 3Q20 and -0.1% vs. 3Q19. Despite the Delta variant’s impact on orthopedic surgery volumes and the company’s ongoing supply chain challenges, Smith+Nephew still expects to achieve the low end of its 2021 guidance of underlying growth in the range of +10% to +13% over 2020.
The company’s joint replacement business has lost market share due to portfolio gaps and supply constraints. However, Smith+Nephew sees the shift of orthopedic surgeries to ASC settings, an area of strength for the company via its sports medicine business, as a unique opportunity.
To leverage the shift, Smith+Nephew is returning to a previous organizational structure in which sports medicine and orthopedics are united under a single leader. Skip Kiil, former President of Orthopedics, will depart the company to pursue other opportunities. The new combined organization will be led by Smith+Nephew veteran Brad Cannon, President of Sports Medicine and ENT.
The company has taken steps to address the talent shortage in its Memphis orthopedics manufacturing plant. However, like the rest of the global market, the company is still impacted by raw material shortages for resin, silicone and electronics. While a relatively small purchaser in the grand scheme of industry, Smith+Nephew is working to gain prioritization for its medical devices.
China’s move to volume-based procurement for knee replacement and hip replacement implants created a roughly $10 million headwind for the company in the third quarter as distributors reduced inventory in anticipation of lower prices. Smith+Nephew said it is in active negotiations with its distributors in China on the next steps.
On the positive side, the company launched its first cementless knee to address a major shortcoming in its portfolio. The LEGION CONCELOC implant uses 3D printing of titanium to generate the network of pores where initial bone fixation occurs, technology already proven in the company’s REDAPT Revision Hip System. Smith+Nephew estimates cementless knee implants represent a fast-growing $400 million opportunity in the U.S.
“We know that care is becoming more decentralized. I think this has been widely reported. More orthopedic procedures are moving to the ASCs or to outpatient settings. We have seen that COVID has actually accelerated that. Our Sports Medicine franchise already has deep relationships with centers that are starting to replace hips and knees. Then in Orthopaedics, we also see further specialization. Foot and ankle surgeons also specialize in both bone and arthroscopic repair, which gives us another opportunity. Then also in capital equipment, we can take more of an integrated approach to selling our digital surgical portfolio, including CORI and the updated arthroscopic tower.” – Smith+Nephew CEO Roland Diggelmann
Orthopedic Sales Data
All orthopedic sales data is provided in USD millions unless otherwise noted. Orthopedic sales and growth rates are estimated on an as-reported basis.
Orthopedic Sales by Segment
| 3Q21 | 3Q20 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $388.3 | $405.7 | ($17.4) | (4.3%) |
| Knees | $227.0 | $237.1 | ($10.1) | (4.2%) |
| Hips | $145.0 | $156.4 | ($11.4) | (7.3%) |
| Extremities | $16.3 | $12.3 | $4.0 | 32.7% |
| Trauma | $119.7 | $106.0 | $13.7 | 13% |
| Sports Medicine | $346.0 | $321.9 | $24.1 | 7.5% |
| Orthobiologics | $14.5 | $12.3 | $2.2 | 17.8% |
| Total | $868.5 | $845.9 | $22.6 | 2.7% |
| 9m21 | 9m20 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,223.1 | $1,077.6 | $145.5 | 13.5% |
| Knees | $711.0 | $637.5 | $73.5 | 11.5% |
| Hips | $460.0 | $405.6 | $54.4 | 13.4% |
| Extremities | $52.1 | $34.5 | $17.6 | 51.2% |
| Trauma | $381.9 | $295.6 | $86.3 | 29.2% |
| Sports Medicine | $1,048.0 | $845.3 | $202.8 | 24% |
| Orthobiologics | $44.3 | $37.1 | $7.1 | 19.2% |
| Total | $2,697.3 | $2,255.6 | $441.7 | 19.6% |
Orthopedic Sales by Geography
| 3Q21 | 3Q20 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $434.3 | $444.1 | ($9.9) | (2.2%) |
| OUS | $434.3 | $401.8 | $32.4 | 8.1% |
| EMEA | $232.1 | $222.9 | $9.2 | 4.1% |
| Asia Pacific | $107.9 | $96.0 | $11.9 | 12.4% |
| Rest of World | $94.3 | $82.9 | $11.4 | 13.7% |
| Total | $868.5 | $845.9 | $22.6 | 2.7% |
| 9m21 | 9m20 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,360.9 | $1,151.9 | $209.0 | 18.1% |
| OUS | $1,336.3 | $1,103.7 | $232.7 | 21.1% |
| EMEA | $727.9 | $608.0 | $119.9 | 19.7% |
| Asia Pacific | $325.6 | $265.7 | $59.9 | 22.5% |
| Rest of World | $282.8 | $230.0 | $52.8 | 23% |
| Total | $2,697.3 | $2,255.6 | $441.7 | 19.6% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
Smith+Nephew reported 3Q21 orthopedic sales of $868.5 million, +2.7% vs. 3Q20 and -0.1% vs. 3Q19. Despite the Delta variant's impact on orthopedic surgery volumes and the company's ongoing supply chain challenges, Smith+Nephew still expects to achieve the low end of its 2021 guidance of underlying growth in the range of +10% to +13% over...
Smith+Nephew reported 3Q21 orthopedic sales of $868.5 million, +2.7% vs. 3Q20 and -0.1% vs. 3Q19. Despite the Delta variant’s impact on orthopedic surgery volumes and the company’s ongoing supply chain challenges, Smith+Nephew still expects to achieve the low end of its 2021 guidance of underlying growth in the range of +10% to +13% over 2020.
The company’s joint replacement business has lost market share due to portfolio gaps and supply constraints. However, Smith+Nephew sees the shift of orthopedic surgeries to ASC settings, an area of strength for the company via its sports medicine business, as a unique opportunity.
To leverage the shift, Smith+Nephew is returning to a previous organizational structure in which sports medicine and orthopedics are united under a single leader. Skip Kiil, former President of Orthopedics, will depart the company to pursue other opportunities. The new combined organization will be led by Smith+Nephew veteran Brad Cannon, President of Sports Medicine and ENT.
The company has taken steps to address the talent shortage in its Memphis orthopedics manufacturing plant. However, like the rest of the global market, the company is still impacted by raw material shortages for resin, silicone and electronics. While a relatively small purchaser in the grand scheme of industry, Smith+Nephew is working to gain prioritization for its medical devices.
China’s move to volume-based procurement for knee replacement and hip replacement implants created a roughly $10 million headwind for the company in the third quarter as distributors reduced inventory in anticipation of lower prices. Smith+Nephew said it is in active negotiations with its distributors in China on the next steps.
On the positive side, the company launched its first cementless knee to address a major shortcoming in its portfolio. The LEGION CONCELOC implant uses 3D printing of titanium to generate the network of pores where initial bone fixation occurs, technology already proven in the company’s REDAPT Revision Hip System. Smith+Nephew estimates cementless knee implants represent a fast-growing $400 million opportunity in the U.S.
“We know that care is becoming more decentralized. I think this has been widely reported. More orthopedic procedures are moving to the ASCs or to outpatient settings. We have seen that COVID has actually accelerated that. Our Sports Medicine franchise already has deep relationships with centers that are starting to replace hips and knees. Then in Orthopaedics, we also see further specialization. Foot and ankle surgeons also specialize in both bone and arthroscopic repair, which gives us another opportunity. Then also in capital equipment, we can take more of an integrated approach to selling our digital surgical portfolio, including CORI and the updated arthroscopic tower.” – Smith+Nephew CEO Roland Diggelmann
Orthopedic Sales Data
All orthopedic sales data is provided in USD millions unless otherwise noted. Orthopedic sales and growth rates are estimated on an as-reported basis.
Orthopedic Sales by Segment
| 3Q21 | 3Q20 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $388.3 | $405.7 | ($17.4) | (4.3%) |
| Knees | $227.0 | $237.1 | ($10.1) | (4.2%) |
| Hips | $145.0 | $156.4 | ($11.4) | (7.3%) |
| Extremities | $16.3 | $12.3 | $4.0 | 32.7% |
| Trauma | $119.7 | $106.0 | $13.7 | 13% |
| Sports Medicine | $346.0 | $321.9 | $24.1 | 7.5% |
| Orthobiologics | $14.5 | $12.3 | $2.2 | 17.8% |
| Total | $868.5 | $845.9 | $22.6 | 2.7% |
| 9m21 | 9m20 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $1,223.1 | $1,077.6 | $145.5 | 13.5% |
| Knees | $711.0 | $637.5 | $73.5 | 11.5% |
| Hips | $460.0 | $405.6 | $54.4 | 13.4% |
| Extremities | $52.1 | $34.5 | $17.6 | 51.2% |
| Trauma | $381.9 | $295.6 | $86.3 | 29.2% |
| Sports Medicine | $1,048.0 | $845.3 | $202.8 | 24% |
| Orthobiologics | $44.3 | $37.1 | $7.1 | 19.2% |
| Total | $2,697.3 | $2,255.6 | $441.7 | 19.6% |
Orthopedic Sales by Geography
| 3Q21 | 3Q20 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $434.3 | $444.1 | ($9.9) | (2.2%) |
| OUS | $434.3 | $401.8 | $32.4 | 8.1% |
| EMEA | $232.1 | $222.9 | $9.2 | 4.1% |
| Asia Pacific | $107.9 | $96.0 | $11.9 | 12.4% |
| Rest of World | $94.3 | $82.9 | $11.4 | 13.7% |
| Total | $868.5 | $845.9 | $22.6 | 2.7% |
| 9m21 | 9m20 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $1,360.9 | $1,151.9 | $209.0 | 18.1% |
| OUS | $1,336.3 | $1,103.7 | $232.7 | 21.1% |
| EMEA | $727.9 | $608.0 | $119.9 | 19.7% |
| Asia Pacific | $325.6 | $265.7 | $59.9 | 22.5% |
| Rest of World | $282.8 | $230.0 | $52.8 | 23% |
| Total | $2,697.3 | $2,255.6 | $441.7 | 19.6% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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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.
