Zimmer Biomet (ZBH) has appointed Mr. Bryan C. Hanson as President, Chief Executive Officer and member of its Board of Directors, effective immediately.
Mr. Hanson will bring experience from a medtech, though not orthopaedic, background. He joins ZBH from Medtronic, where he served as Executive Vice President and President of the Minimally Invasive Therapies Group (MITG)—a US $9BB business—from 2015. Previously, he held numerous executive roles at Covidien from 1992 to 2015. The MITG segment of Medtronic comprises Advanced and General Surgical products and those for Respiratory, Gastrointestinal and Renal care and experienced growth of 4% in FY2017 vs. 2016. Medtronic acquired Covidien in January 2015.
In November, we learned that one of the suggested persons of interest for the ZBH CEO position—Mr. Stephen MacMillan, former President & CEO of Stryker—chose to remain in place at Hologic, where he had been awarded a special performance-based retention equity grant after a reported “large medical device company” made a substantial offer to be its CEO.
We expected that ZBH would hire a CEO with experience in certain specific challenges: M&A integration, timely reconciliation of revenue-hindering disruptions, portfolio diversification. From what we can immediately discern from Mr. Hanson’s past, M&A integration and portfolio diversification are checked with this hire. The timely reconciliation of revenue-hindering disruptions is one of the major headwinds that he faces entering the new role, and will be crucial to his leading of ZBH.
As noted in our ZBH 3Q17 revenue reporting, the company continues to face headwinds deriving from supply recovery at its Warsaw North Campus manufacturing facility, low overall U.S. hip and knee procedures, a lag in anticipated sales recapture (particularly in the U.S.), weather impacts, issues with integration of its U.S. spine salesforce, attrition in temporary labor and a knee device price reduction in India. At that time, ZBH updated whole-company guidance to a range of $7.76BB to $7.80BB, down from the $7.80BB to $7.87BB that was stated in 2Q17.
That said, for the nine months ending in September 2017, ORTHOWORLD estimated that ZBH posted year-over year orthopaedic revenue growth of 2.3%. We're looking forward to the full-year earnings call in January 2018 for fresh perspective.
Mr. Daniel P. Florin, Interim CEO of ZBH since the July 2017 departure of Mr. David Dvorak, will continue as the company's Senior Vice President and Chief Financial Officer. (With the exit of Mr. Hanson, Medtronic has appointed as his successor Mr. Bob White, previously Senior Vice President and President of Medtronic's Asia Pacific Region.)
Sources: Zimmer Biomet, Inc.; Medtronic plc; ORTHOWORLD Inc. and ORTHOWORLD estimates