Sean Fenske, Editor-in-Chief08.04.23
The world of orthopedic technology has changed. Seemingly not that long ago, this healthcare segment was ruled by the “art” of surgery, where “feel” led the way to a successful procedure. This “feel” was a developed skill among surgeons, requiring years of practice and was often tied to brand loyalty as that “feel” was coupled with the provider of the implant, instrumentation, and other tools used by the physician.
While you’ll certainly find this type of practice happening today and brand loyalty is still quite prominent, orthopedics is rapidly evolving into more of a science. This transformation has been years in the making, following the trends across all of medicine where data and analytics help enable predictable outcomes repeatably. While some doctors may miss the “good old days” when their savvy and experience put them into the top echelon of the industry, it’s unlikely any would rather have an environment where procedural success wasn’t the most important goal. Today’s sophisticated digital systems help make that possible.
The digital revolution is not unique to orthopedics by any means. However, for whatever reason, it feels the most out of place within this sector. Fortunately, many device makers are leading the charge and providing the necessary technologies to push this effort forward. I don’t think any entry in this year’s top company reports maintains a product portfolio that don’t include some collection of artificial intelligence (AI)-based solutions; robotic, data-driven surgical systems; smart navigation technologies; or analytics-based planning software. Further, these intelligent innovations are being coupled with novel manufacturing advancements that provide personalized tools and implants for each patient, bringing personalized care to orthopedics.
As a result of these technological advancements, the days of “art” and “feel” are on their way out. As far as I’m concerned, good riddance.
The influx of digital technologies isn’t the only notable change, however, you’ll find as you browse through this year’s top company reports. (Further, you can get a dedicated look at the current state of the digital evolution within this feature). There are other changes happening within the industry as revealed within the reports.
One such shift is reflected across the medical device industry at large and isn’t unique to this year’s reports either. M&A is still prominent, enabling companies to gain a foothold in a specific technology segment or access distribution channels in a certain region of the world. In fact, one of the larger recent M&A announcements involves the companies on the ODT list at #7 and #8—NuVasive and Globus Medical. The merger valued at $3.1 billion would propel the combined entity to #6 on next year’s list (or at least by 2025), creating one of the largest orthopedic spine implant providers (reportedly only behind Medtronic). Whether the FTC allows the deal to take place, however, remains to be seen.
Speaking of Medtronic, they are tied to another trend happening across the medtech industry (again, not unique to orthopedic device manufacturers) and essentially, is the opposite of the M&A trend. In this instance, I’m referring to the “spin out.” This was prominently seen in sister publication MPO’s top 30 list (Medtronic provided just one example), but it also birthed a new entrant on the ODT list. ZimVie made its debut in this year’s report at #9 as a result of being spun out from Zimmer Biomet. Specifically, ZimVie is the spine and dental portions of the former parent company; it now stands alone to make its own way. Whether or not these spin outs continue as a source of speculation (getting back to Medtronic, their orthopedic business has been rumored to be a potential spin out for some time), so we’ll have to see how things shape up in future reports.
Another theme you’ll see in many of this year’s reports is revenue rise attributed to the recovery of elective procedures as we move further away from the dark days of the pandemic. The financial dip orthopedic device makers experienced during COVID was substantial, but a lengthy road to normalcy has taken them on quite the journey. That trip, however, is likely coming to an end. In my opinion, we aren’t going to see a financial impact credited to procedure recoveries much beyond this year’s reports. Revenue gains will return to originating from organic growth (i.e., new product launches) and inorganic expansion (i.e., the aforementioned M&A activity).
Beyond that, there are likely other trends and themes that can be uncovered from this year’s reports, but these were the most notable to me. Would love to hear what was revealed to you as you peruse the 2023 entries. And of course, I encourage you to share your findings with me.
Sean Fenske, Editor-in-Chief
sfenske@rodmanmedia.com
While you’ll certainly find this type of practice happening today and brand loyalty is still quite prominent, orthopedics is rapidly evolving into more of a science. This transformation has been years in the making, following the trends across all of medicine where data and analytics help enable predictable outcomes repeatably. While some doctors may miss the “good old days” when their savvy and experience put them into the top echelon of the industry, it’s unlikely any would rather have an environment where procedural success wasn’t the most important goal. Today’s sophisticated digital systems help make that possible.
The digital revolution is not unique to orthopedics by any means. However, for whatever reason, it feels the most out of place within this sector. Fortunately, many device makers are leading the charge and providing the necessary technologies to push this effort forward. I don’t think any entry in this year’s top company reports maintains a product portfolio that don’t include some collection of artificial intelligence (AI)-based solutions; robotic, data-driven surgical systems; smart navigation technologies; or analytics-based planning software. Further, these intelligent innovations are being coupled with novel manufacturing advancements that provide personalized tools and implants for each patient, bringing personalized care to orthopedics.
As a result of these technological advancements, the days of “art” and “feel” are on their way out. As far as I’m concerned, good riddance.
The influx of digital technologies isn’t the only notable change, however, you’ll find as you browse through this year’s top company reports. (Further, you can get a dedicated look at the current state of the digital evolution within this feature). There are other changes happening within the industry as revealed within the reports.
One such shift is reflected across the medical device industry at large and isn’t unique to this year’s reports either. M&A is still prominent, enabling companies to gain a foothold in a specific technology segment or access distribution channels in a certain region of the world. In fact, one of the larger recent M&A announcements involves the companies on the ODT list at #7 and #8—NuVasive and Globus Medical. The merger valued at $3.1 billion would propel the combined entity to #6 on next year’s list (or at least by 2025), creating one of the largest orthopedic spine implant providers (reportedly only behind Medtronic). Whether the FTC allows the deal to take place, however, remains to be seen.
Speaking of Medtronic, they are tied to another trend happening across the medtech industry (again, not unique to orthopedic device manufacturers) and essentially, is the opposite of the M&A trend. In this instance, I’m referring to the “spin out.” This was prominently seen in sister publication MPO’s top 30 list (Medtronic provided just one example), but it also birthed a new entrant on the ODT list. ZimVie made its debut in this year’s report at #9 as a result of being spun out from Zimmer Biomet. Specifically, ZimVie is the spine and dental portions of the former parent company; it now stands alone to make its own way. Whether or not these spin outs continue as a source of speculation (getting back to Medtronic, their orthopedic business has been rumored to be a potential spin out for some time), so we’ll have to see how things shape up in future reports.
Another theme you’ll see in many of this year’s reports is revenue rise attributed to the recovery of elective procedures as we move further away from the dark days of the pandemic. The financial dip orthopedic device makers experienced during COVID was substantial, but a lengthy road to normalcy has taken them on quite the journey. That trip, however, is likely coming to an end. In my opinion, we aren’t going to see a financial impact credited to procedure recoveries much beyond this year’s reports. Revenue gains will return to originating from organic growth (i.e., new product launches) and inorganic expansion (i.e., the aforementioned M&A activity).
Beyond that, there are likely other trends and themes that can be uncovered from this year’s reports, but these were the most notable to me. Would love to hear what was revealed to you as you peruse the 2023 entries. And of course, I encourage you to share your findings with me.
Sean Fenske, Editor-in-Chief
sfenske@rodmanmedia.com