Stryker Continues to Outpace Competitors with Solid Execution Across Segments

Stryker reported 3Q19 orthopedic revenue of USD $1,857.6MM, +9.7% vs. 3Q18.

• Growth in the knee segment was driven by continued high demand for Mako TKA, which is also having a carryover effect to hip growth on the Mako platform, per leadership; hip growth was also driven in part by the “deliberate” rollout of the 3D printed Accolade hip cup
• Trauma grew on the ongoing ramping of the T2 Alpha tibia nail
• The spine segment faced headwinds including softness in U.S. legacy Stryker spine sales, price erosion, slower than expected integration of the K2M salesforce and inventory availability. Though spine growth as reported is 35.2%, Stryker’s 3Q18 comparison did not yet include revenue from the K2M acquisition. Adjusting for that, spine sales grew in the low single digits
• With the acquisition of Mobius Imaging and Cardan Robotics, Stryker gains access to the intra-operative imaging segment that aligns with the company’s strategy of providing comprehensive procedural solutions for spine sales; this also lays the groundwork to eventually bring a robotic spine platform to market
• Mako Update:
  • Sold 51 units globally, with 42 in the US (+61.5% vs. 3Q18) and 9 internationally (-18.2%)
  • Now has a global install base of nearly 800 units with over 600 in the U.S.
  • Entered the Japanese market with 4 sold units, and completed the first Total Knee procedure there; opened a training facility in Hong Kong that support entry to China
  • 18,000 Mako Total Knee procedures for the quarter (+60% vs. prior year)
  • Mako pricing remains stable despite new entrants into the robotics market
  • Of the accounts that have purchased a Mako robot, about 10% have purchased a second unit
• ORTHOWORLD projects Stryker full year 2019 orthopedic revenue of $7.7 billion, +8.3% vs. 2018

“We’re benefiting from building momentum and surgeon conviction around Mako. With the launch of our new hip which is approved on Mako, more and more surgeons are now adopting the hip on Mako. We continue to see increased penetration for our cementless knee offering, which is uniquely 3D-printed. Now we’re entering the next leg of that ortho story, which is expanding the footprint of Mako globally. We’re taking market share across the board.” – Stryker VP of Strategy and Investor Relations Katherine Owens on joint replacement growth drivers

ORTHOWORLD estimates segment sales and growth on an as-reported basis, as follows ($MM).

ORTHOWORLD estimates orthopedic sales by geographic region as follows ($MM).

Net earnings, inclusive of all Stryker revenue, are as follows ($MM).

Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.