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The Top 10

Industry’s largest firms adjust to ‘new normal’ and still make gains.



The word “normal” is a relative term. Civilized societies have used it for centuries to describe any type of activity, behavior,emotion, habit or trait that its members deem common or appropriate. Normal has no universal representation; it has long maintained a chameleon-like tendency to assimilate easily into its surroundings.

Over the last several years, normal has transformed itself quite effectively (and drastically, some would argue) in the medical device sector, an industry built on equal parts of risk and innovation. Since the start of the Great Recession, normal has taken on a vast array of different meanings. It now describes the dried-up capital markets, the pricing pressures, and the tough regulatory landscape facing major medtech manufacturers. It also defines the stock market’s chronic bipolar disorder and the economy’s feeble recovery efforts.

Such a confluence of “new normal” realities is forcing device manufacturers to rely on some unconventional methods for long-term growth. Rather than foster expansion solely through innovative technologies, companies increasingly are turning to acquisitions and emerging markets to secure their futures. Many of the companies in this year’s report made significant investments in other parts of the world to boost sales in 2011 or created their own venture capital programs to invest in promising new technologies. Executives with Stryker Corp., for instance, toured China’s countryside in a technology-packed convertible truck last summer to better familiarize suburban and rural physicians with their products. Smith & Nephew plc, on the other hand, aligned itself with healthcare growth equity firm Essex Woodlands to further develop its biologics products and clinical therapies.

“We are not going to go back to where we’ve come from,” Mohamed A. El-Erian, CEO and co-chief information officer of PIMCO, the Newport Beach, Calif.-based global investment solutions provider best known for bond investing, warned during a 2009 global investment conference. “The notion should not be, ‘Is this recession going to be over?’ [The notion] should be, ‘What does the new
normal look like when the system stabilizes?’”

Chances are, it will look anything but normal.

Top 10 Orthopedic Device Companies

1. Stryker $8.3 billion 6. Medtronic Spinal $3.4 billion
2. DePuy $5.8 billion 7. Biomet $2.7 billion
3. Zimmer $4.5 billion 8. DJO Global $1 billion
4. Smith & Nephew $4.3 billion 9. Orthofix $579 million
5. Synthes $3.9 billion 10. NuVasive $540 million



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