For Industry Leaders, Mass Plus Momentum Equals Growth
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In compiling our first annual report on the largest medical device and in-vitro diagnostics manufacturers, a few truths seem inescapable: cumbersome size doesn’t necessarily hamper growth and device manufacturing, despite the tepid economy, is a healthy business to be in. Although some readers might take exception to such an assertion, the simple fact is that double-digit revenue and earnings growth seems to be the rule and not the exception. CEOs of companies in other industries would do backflips for the kind of results that medical device companies regularly report. For diversified corporations such as GE or Tyco, their healthcare components have risen head and shoulders above sister businesses. With blockbuster products such as drug-eluting stents now on the market, industry giants such as Johnson and Johnson, Boston Scientific and Guidant stand to benefit significantly from this value-added product. Their growth is almost guaranteed once they have overcome regulatory hurdles. A healthy group at the top doesn’t mean hard times for start-ups and small device makers. Quite the contrary: small-cap firms who innovate are often recipients of much needed cash from their much larger competitors, who also benefit from an infusion of new technology. Acquisitions and equity investments by the top 20 device and top 10 IVD companies continued at a remarkable pace in 2002 and the first part of this year, despite what many perceive as a withering of investment capital.
About the Numbers |