08.02.07
5. Synthes
$2.4 Billion
Key Executives:
Hansjörg Wyss, Chairman
Michel Orsinger, President, CEO
Robert Donohue, CFO, President, Synthes Canada
No. of Employees: 8,451
Headquarters: West Chester, PA
With multiple additions to its product line and a consistent focus on international growth, Synthes, a Swiss medical device manufacturer with US headquarters in Pennsylvania, achieved double-digit sales in its trauma, spine and cranio-maxillofacial (CMF) lines. For FY 2006, net sales were $2.4 billion, up 15.1% from 2005.
Sales in North America were higher than any other division and contributed $1.5 billion toward the company’s overall total. Global sales presented remarkable figures in FY 2006 as well, with products in Europe, Asia Pacific and various other countries achieving sales of $519 million, $220 million and $127 million, respectively.
With the addition of 824 new employees last year, Synthes is climbing the ladder to continued growth—this progression follows a similar pattern seen in 2005, when the company increased its workforce by nearly 14%.
Each of the company’s business units had noteworthy achievements in 2006.
Synthes’ trauma unit, the company’s largest division, sustained a market share of 55%, aided by the introduction of 40 new products in 2006. The expansion of the Locking Compression Plate (LCP) system was an integral factor in sustaining growth. Since 2002, Synthes has introduced 32 different LCP product lines and, in the fourth quarter, expanded these existing systems. In intramedullary nailing, the Expert Lateral Femoral Nail was the main market launch in FY 2006. The introduction of the Headless Compression Screw in the sub-segment for mini-fragments was characterized by the company as another important highlight.
Synthes’ CMF division maintained a 50%-plus market share in North America, with one of the top growth drivers being the Low Profile Neuro System. However, introductions of the Sternal Fixation System, the Patient Specific Implant and the PlusDrive System also contributed to the company’s success.
Spine growth was derived from the Interbody Fusion, Anterior Thoracolumbar, Cervical and Biomaterials product portfolios. Synthes’ spinal division concentrated its efforts on the launch of its Prodisc-L artificial lumbar disc after the FDA approved the device for US markets (it already was available in Europe). Synthes reported that in 2006, the company introduced more high-impact spine products than any previous year.
Along with product initiatives, Synthes strengthened its market presence in other ways. While continuing its ongoing collaboration with the AO Foundation, Synthes acquired various assets of the group, including the Synthes trade names, brands, as well as patents and know-how, in August. In addition, Affinergy Inc., a Duke University spinoff with a proprietary site-specific biological delivery system, signed an exclusive development and license agreement with Synthes in September to work across all three of Synthes’ markets.
The company received some mixed news last fall regarding a patent infringement lawsuit. In early October, a judge ruled that Synthes’ Trochanteric Fixation Nail (TFN) devices and Proximal Femoral Nail (PFN) products infringed on a Smith & Nephew patent. However, later that month, the court amended the prior decision by allowing Synthes to continue selling TFN devices with the caveat that the company could not sell or promote the use of the present TFN products to treat intertrochanteric fractures.
Looking at 2007, the company faced some upheaval with a notable realignment in executive management. Michel Orsinger, former president and COO of the company for the past two-and-a-half years, was promoted to the post of CEO in April. Synthes’ former CEO, Hansjörg Wyss, will remain as chairman of the board.
Regarding the future, Synthes pointed out in its 2006 annual report that it has never achieved less than 10% organic sales growth and does not expect 2007 to be any different. The beginning of 2007 already reflects higher net sales of $658 million reported in the first quarter, an increase of 14.2% from the same period last year. The company credits its expanding product lines in all three of its divisions as the leading catalyst.