08.04.23
Rank: #3 (Last year: #3)
$6.94 Billion
Prior Fiscal: $6.83 Billion
Percentage Change: +1.6%
R&D Expenditure: $406M
Best FY22 Quarter: Q4 $1.83B
Latest Quarter: Q1 $1.83B
No. of Employees: 18,000
Global Headquarters: Warsaw, Ind.
KEY EXECUTIVES:
Bryan Hanson, Chairman, President, and CEO
Ivan Tornos, COO
Suketu Upadhyay, Exec. VP and CFO
Rachel Ellingson, Sr. VP and Chief Strategy Officer
David J. Kunz, Sr. VP, Global Quality and Regulatory Affairs
In February 2021, Zimmer Biomet declared it would shift its focus to high-growth, high priority areas, which was identified by the firm as knees, hips, sports medicine, extremities, trauma, and craniomaxillofacial and thoracic solutions. At the time, the company attributed a total market value of $43.5 billion to those segments, viewing it as ripe for growth opportunities.
As a result of this decision, the spine and dental segments of the organization were to be spun off to form its own, independent company. ZimVie (which it would come to be named) would be well-positioned for increased success within the $21 billion combined market of those two segments. This new venture would have a solid foundation upon which to grow, with 2019 and 2020 pro forma revenue totals of approximately $1.022 billion and $897 million, respectively.
Fast-forward almost 13 months to the day, Zimmer Biomet announced the completion of the spin-off of ZimVie. “The spinoff of ZimVie marks a major milestone in the active portfolio management of Zimmer Biomet as we continue to strengthen our position as a global leader in the medtech space,” said Bryan Hanson, chairman, president, and CEO of Zimmer Biomet. “We are confident this transaction will create shareholder value for both companies and will allow us to increase our focus and enhance revenue growth for our core businesses.”
While ZimVie saw sales shrink slightly year-over-year in its first (albeit partial in its first annual period) fiscal, that contrasted against former parent, Zimmer Biomet, which saw a modest gain of 1.6%. The overall rise was attributed to the continued recovery of surgeries following the significant drop in procedures during the pandemic.
Unfortunately, the gains were not reflected across all of the four remaining segments. As a whole, the rise translated to a tally of $6.94 billion in 2022 (vs. $6.83 billion in 2021; both figures reflect the absence of the ZimVie segments). Knees and Hips were on the positive side of the revenue equation as both saw jumps in their financials in 2022. They finished the year with gains of 4.9% and 2.1%, respectively. In real world figures, those net sales were $2.78 billion for the Knees business, and $1.89 billion for Hips. The company pointed to the same reason for the rise as the company’s increase—ongoing return of procedures.
On the other hand, S.E.T. (which encompasses the products and services supporting Sports Medicine, Extremities, Trauma, Craniomaxillofacial, and Thoracic) and Other (which includes the ROSA robotic surgery systems and related technologies) declined in 2022. S.E.T. dropped by 1.8% to end at $1.7 billion. The diminished sales were blamed on a number of factors. They included the negative effects of changes in foreign currency exchange rates, lower trauma product net sales partially due to value-based purchasing plan implementation, and unfavorable changes in reimbursement for certain restorative therapy products.
The loss for Other was slightly more substantial in percentage (4.3%), which resulted in a $570 million contribution for FY22. Zimmer Biomet attributed this loss to the negative effects of changes in foreign currency exchange rates and lower unit sales of the ROSA robots as some customers shifted to operating lease arrangements for the systems instead of purchasing them.
Curiously, both of these businesses were the highest gainers from 2020 to 2021, with 13.3% for S.E.T. and an astounding 25.9% for Other. Of course, that was somewhat reflected throughout the orthopedic industry, which took the biggest hit from elective procedures being postponed during the pandemic.
Seeking to restore positive gains to all four of its business units, a number of innovations were rolled out in 2022 to assist in doing just that.
In its ongoing effort to bring intelligence and analytics to the orthopedic technology space, the organization introduced its WalkAI Artificial Intelligence Model. This solution helps to identify patients who are predicted to have a lower gait speed outcome at 90 days after hip or knee surgery. The daily prediction is compared to anonymized, real-world data from the extensive ZBEdge database to identify when a patient’s recovery may not be on track, based on predicted low gait speed. ZBEdge is a suite of integrated smart, digital, and robotic technologies purposefully engineered to deliver transformative data-powered clinical insights with the goal of improving patient outcomes.
“Our strategic prioritization and investment in R&D has solidified our position as an innovator in our space with breakthrough technologies,” said Ivan Tornos, COO of Zimmer Biomet. “ZBEdge is realizing our bold vision of an interconnected ecosystem of digital and robotic technologies by sharing data and unlocking clinical insights, which is now enhanced by artificial intelligence modeling.”
Along the same vein, a couple of months later, Zimmer Biomet rolled out new artificial intelligence (AI) capabilities within its Omni Suite, an intelligent operating room (OR) designed to optimize surgical workflow and procedural efficiency by automating manual tasks and streamlining unnecessary technology and redundant hardware. The AI feature uses cameras to automatically recognize and timestamp key OR workflow milestones, including patient entry and exit, door count, the start and stop of anesthesia, surgery, and cleaning. Surgical teams are guided through a process to help optimize OR workflow based on real-time access to workflow metrics.
During the second half of 2022, the company made two announcements regarding implant offerings. The first was an FDA clearance for its Identity Shoulder System for shoulder replacement. The offering is a convertible system that uses proprietary technologies to align each surgeon’s approach to an individual patient’s anatomy, with the goal of alleviating pain and optimizing range of motion. It is designed to allow surgeons to devise and execute a patient-specific surgical plan with precision. Further, the system expands on the traditional inlay and onlay reconstruction used in reverse shoulder arthroplasty by providing eight humeral tray combinations that give surgeons increased options for aligning the humerus with the glenoid, without lengthening the arm.
The other product notice from the firm was with regard to the Persona Knee System Portfolio. The company gained FDA clearance for the Persona OsseoTi Keel Tibia for cementless knee replacement. This solution features a porous version of the Persona anatomic tibia with Zimmer Biomet’s OsseoTi Porous Metal Technology, which uses anatomical data in combination with 3D-printing technology to build a structure that directly mimics the architecture of human cancellous—or spongey—bone. This material is combined with a keeled design to deliver stable initial and biological fixation.
In addition to the product news the organization generated in 2022, it also teamed with a couple of partners to help with future endeavors. Predictably, both arrangements centered around its ZBEdge digital platform of solutions and enhancing the offerings and capabilities of it.
Establishing a three-year deal with the Hospital for Special Surgery (HSS)—the second collaboration with the medical center in as many years—the organizations announced they were creating the HSS/Zimmer Biomet Innovation Center for Artificial Intelligence in Robotic Joint Replacement. Through the center, the entities aim to develop new decision support tools, powered by data collection and machine learning, to provide data-driven recommendations to surgeons for robotic-assisted joint surgery. The tools, which will be integrated into the ROSA Knee and ROSA Hip systems, will further expand the capabilities of the ZBEdge suite with the goal of improving patient outcomes.
“Together we hope to create clinically validated decision support tools that rely on real-world patient and procedural data to inform actionable recommendations that help surgeons achieve predictable and reproducible clinical outcomes,” said Nitin Goyal, M.D., Chief Science, Technology and Innovation Officer at Zimmer Biomet.
The second pairing saw a connection made with Surgical Planning Associates (SPA) for an exclusive, multi-year co-marketing agreement to commercialize HipInsight, the first FDA-cleared mixed reality navigation system for total hip replacement. HipInsight is customized for Zimmer Biomet’s hip implant portfolio and allows surgeons to use Microsoft HoloLens 2 glasses to visualize a hologram of the patient’s pelvic anatomy projected on the pelvis during surgery to support implant placement and alignment. HipInsight, produced by SPA, was added to Zimmer Biomet’s OptiVu Mixed Reality portfolio of applications.
$6.94 Billion
Prior Fiscal: $6.83 Billion
Percentage Change: +1.6%
R&D Expenditure: $406M
Best FY22 Quarter: Q4 $1.83B
Latest Quarter: Q1 $1.83B
No. of Employees: 18,000
Global Headquarters: Warsaw, Ind.
KEY EXECUTIVES:
Bryan Hanson, Chairman, President, and CEO
Ivan Tornos, COO
Suketu Upadhyay, Exec. VP and CFO
Rachel Ellingson, Sr. VP and Chief Strategy Officer
David J. Kunz, Sr. VP, Global Quality and Regulatory Affairs
In February 2021, Zimmer Biomet declared it would shift its focus to high-growth, high priority areas, which was identified by the firm as knees, hips, sports medicine, extremities, trauma, and craniomaxillofacial and thoracic solutions. At the time, the company attributed a total market value of $43.5 billion to those segments, viewing it as ripe for growth opportunities.
As a result of this decision, the spine and dental segments of the organization were to be spun off to form its own, independent company. ZimVie (which it would come to be named) would be well-positioned for increased success within the $21 billion combined market of those two segments. This new venture would have a solid foundation upon which to grow, with 2019 and 2020 pro forma revenue totals of approximately $1.022 billion and $897 million, respectively.
Fast-forward almost 13 months to the day, Zimmer Biomet announced the completion of the spin-off of ZimVie. “The spinoff of ZimVie marks a major milestone in the active portfolio management of Zimmer Biomet as we continue to strengthen our position as a global leader in the medtech space,” said Bryan Hanson, chairman, president, and CEO of Zimmer Biomet. “We are confident this transaction will create shareholder value for both companies and will allow us to increase our focus and enhance revenue growth for our core businesses.”
While ZimVie saw sales shrink slightly year-over-year in its first (albeit partial in its first annual period) fiscal, that contrasted against former parent, Zimmer Biomet, which saw a modest gain of 1.6%. The overall rise was attributed to the continued recovery of surgeries following the significant drop in procedures during the pandemic.
Unfortunately, the gains were not reflected across all of the four remaining segments. As a whole, the rise translated to a tally of $6.94 billion in 2022 (vs. $6.83 billion in 2021; both figures reflect the absence of the ZimVie segments). Knees and Hips were on the positive side of the revenue equation as both saw jumps in their financials in 2022. They finished the year with gains of 4.9% and 2.1%, respectively. In real world figures, those net sales were $2.78 billion for the Knees business, and $1.89 billion for Hips. The company pointed to the same reason for the rise as the company’s increase—ongoing return of procedures.
On the other hand, S.E.T. (which encompasses the products and services supporting Sports Medicine, Extremities, Trauma, Craniomaxillofacial, and Thoracic) and Other (which includes the ROSA robotic surgery systems and related technologies) declined in 2022. S.E.T. dropped by 1.8% to end at $1.7 billion. The diminished sales were blamed on a number of factors. They included the negative effects of changes in foreign currency exchange rates, lower trauma product net sales partially due to value-based purchasing plan implementation, and unfavorable changes in reimbursement for certain restorative therapy products.
The loss for Other was slightly more substantial in percentage (4.3%), which resulted in a $570 million contribution for FY22. Zimmer Biomet attributed this loss to the negative effects of changes in foreign currency exchange rates and lower unit sales of the ROSA robots as some customers shifted to operating lease arrangements for the systems instead of purchasing them.
Curiously, both of these businesses were the highest gainers from 2020 to 2021, with 13.3% for S.E.T. and an astounding 25.9% for Other. Of course, that was somewhat reflected throughout the orthopedic industry, which took the biggest hit from elective procedures being postponed during the pandemic.
Seeking to restore positive gains to all four of its business units, a number of innovations were rolled out in 2022 to assist in doing just that.
In its ongoing effort to bring intelligence and analytics to the orthopedic technology space, the organization introduced its WalkAI Artificial Intelligence Model. This solution helps to identify patients who are predicted to have a lower gait speed outcome at 90 days after hip or knee surgery. The daily prediction is compared to anonymized, real-world data from the extensive ZBEdge database to identify when a patient’s recovery may not be on track, based on predicted low gait speed. ZBEdge is a suite of integrated smart, digital, and robotic technologies purposefully engineered to deliver transformative data-powered clinical insights with the goal of improving patient outcomes.
“Our strategic prioritization and investment in R&D has solidified our position as an innovator in our space with breakthrough technologies,” said Ivan Tornos, COO of Zimmer Biomet. “ZBEdge is realizing our bold vision of an interconnected ecosystem of digital and robotic technologies by sharing data and unlocking clinical insights, which is now enhanced by artificial intelligence modeling.”
Along the same vein, a couple of months later, Zimmer Biomet rolled out new artificial intelligence (AI) capabilities within its Omni Suite, an intelligent operating room (OR) designed to optimize surgical workflow and procedural efficiency by automating manual tasks and streamlining unnecessary technology and redundant hardware. The AI feature uses cameras to automatically recognize and timestamp key OR workflow milestones, including patient entry and exit, door count, the start and stop of anesthesia, surgery, and cleaning. Surgical teams are guided through a process to help optimize OR workflow based on real-time access to workflow metrics.
During the second half of 2022, the company made two announcements regarding implant offerings. The first was an FDA clearance for its Identity Shoulder System for shoulder replacement. The offering is a convertible system that uses proprietary technologies to align each surgeon’s approach to an individual patient’s anatomy, with the goal of alleviating pain and optimizing range of motion. It is designed to allow surgeons to devise and execute a patient-specific surgical plan with precision. Further, the system expands on the traditional inlay and onlay reconstruction used in reverse shoulder arthroplasty by providing eight humeral tray combinations that give surgeons increased options for aligning the humerus with the glenoid, without lengthening the arm.
The other product notice from the firm was with regard to the Persona Knee System Portfolio. The company gained FDA clearance for the Persona OsseoTi Keel Tibia for cementless knee replacement. This solution features a porous version of the Persona anatomic tibia with Zimmer Biomet’s OsseoTi Porous Metal Technology, which uses anatomical data in combination with 3D-printing technology to build a structure that directly mimics the architecture of human cancellous—or spongey—bone. This material is combined with a keeled design to deliver stable initial and biological fixation.
In addition to the product news the organization generated in 2022, it also teamed with a couple of partners to help with future endeavors. Predictably, both arrangements centered around its ZBEdge digital platform of solutions and enhancing the offerings and capabilities of it.
Establishing a three-year deal with the Hospital for Special Surgery (HSS)—the second collaboration with the medical center in as many years—the organizations announced they were creating the HSS/Zimmer Biomet Innovation Center for Artificial Intelligence in Robotic Joint Replacement. Through the center, the entities aim to develop new decision support tools, powered by data collection and machine learning, to provide data-driven recommendations to surgeons for robotic-assisted joint surgery. The tools, which will be integrated into the ROSA Knee and ROSA Hip systems, will further expand the capabilities of the ZBEdge suite with the goal of improving patient outcomes.
“Together we hope to create clinically validated decision support tools that rely on real-world patient and procedural data to inform actionable recommendations that help surgeons achieve predictable and reproducible clinical outcomes,” said Nitin Goyal, M.D., Chief Science, Technology and Innovation Officer at Zimmer Biomet.
The second pairing saw a connection made with Surgical Planning Associates (SPA) for an exclusive, multi-year co-marketing agreement to commercialize HipInsight, the first FDA-cleared mixed reality navigation system for total hip replacement. HipInsight is customized for Zimmer Biomet’s hip implant portfolio and allows surgeons to use Microsoft HoloLens 2 glasses to visualize a hologram of the patient’s pelvic anatomy projected on the pelvis during surgery to support implant placement and alignment. HipInsight, produced by SPA, was added to Zimmer Biomet’s OptiVu Mixed Reality portfolio of applications.