Stryker Eyes Expanding Global Market
In a move that many industry analysts warned about last year, Kalamazoo, Mich.-based medtech company Stryker Corporation is setting its sights more firmly on non-U.S. markets. Stryker’s shift in focus to foreign markets may be a continuation of rippled effects from the medical device excise tax that began on Jan. 1. The company implemented layoffs at its New York facilities in 2012 to offset the anticipated cost of the tax; Stryker isn’t moving U.S. manufacturing offshore yet, but there will be a definite geographic market shift in focus.
According to information released at the JP Morgan Healthcare Conference in San Francisco, Calif., held Jan. 7-9, Stryker will overhaul its European and emerging-markets business. It has made several significant changes in its management and structure oversees. According to company President and CEO Kevin A. Lobo, it could take several quarters for changes to be reflected in the company’s finances. However, he said that the European market was a “key plank” in Stryker’s global market initiative.
Emerging markets currently represent 6 percent of Stryker’s sales. In emerging markets where the company has an existing footprint, Stryker has seen 20 percent growth. However, the company feels that there are many existing emerging markets where a larger footprint would enhance sales.
“Globalization is an enormous opportunity for Stryker. We clearly have room to grow outside the U.S.” Lobo said at the conference. “The U.S. is still representative of 65 percent of our total sales. That is a ratio that hasn’t changed in about 10 years.”
At the close of the conference, Stryker announced its preliminary 2012 fourth quarter and full-year highlights, as well as its resultant revised 2013 outlook. Net sales were at $2.3 billion for the fourth quarter, and $8.7 billion for the year, up 5.5 and 4.2 percent from their respective 2011 periods.
“With a solid performance in the fourth quarter, we delivered on our revised sales and earnings targets. This reflects the commitment of our global teams and strength of our diverse sales footprint,” said Lobo. “We remain committed to driving shareholder value and optimizing our balance sheet as reflected in the recently announced 25 percent increase in our quarterly dividend as well as an increase in our share repurchase authorization to $1 billion.”
In its projection for 2013, Stryker execs point to unfavorable exchange rates as a possible risk to net sales. If foreign currency exchange rates hold near current levels, the company anticipates net sales possibly will be negatively impacted by 1 percent in both the first quarter and full year of 2013.
In tandem with these announcements, Stryker has created a new position: Vice President and Chief Medical & Scientific Officer. Occupying this new role will be Scott Bruder, M.D., Ph.D., joining the company from Becton Dickinson and Company (BD) where he served as chief science and technology officer for the past five years. The new position at Stryker was created to have someone responsible for overseeing the clinical and scientific efforts of the company, including academic, industrial and governmental scientific partnerships. In addition, he will represent Stryker as the leading medical authority of the company for trade associations, regulatory bodies, and other entities while also partnering with our teams across the organization.
At BD, Bruder was responsible for identifying and cultivating new growth opportunities, improving the product development system and enhancing global research capabilities. Prior to that, he spent eight years at Johnson & Johnson in a series of senior executive and scientific roles in various businesses. Earlier in his career, Bruder held leadership roles at Anika Therapeutics and Osiris Therapeutics.
Bruder is a graduate from Brown University (Providence, R.I.) and Case Western Reserve University (CWRU) School of Medicine (Cleveland, Ohio), where he also earned a Ph.D. in stem cell biology, before obtaining additional surgical training at the University of Pennsylvania (Philadelphia, Pa.). He maintains an active academic presence as an adjunct professor of biomedical engineering at CWRU, having previously been an adjunct faculty member in the department of orthopedic surgery for 13 years.
“We are excited that Scott will be joining our executive leadership team and further broadening our clinical and scientific expertise while also strengthening our capabilities in the critical areas of evidence-based medicine,” said Lobo.
Stryker’s areas of focus are reconstructive, medical, and surgical technologies for the neurotechnology and orthopedic spaces.