07.20.22
Rank: #24 (Last year: #21)
$5.21 Billion
Prior Fiscal: $4.56 Billion
Percentage Change: +14.2%
R&D Expenditure: $356M
Best FY21 Quarter: Q4 $1.35B
Latest Quarter: $1.31B
No. of Employees: 18,369
Global Headquarters: London, U.K.
KEY EXECUTIVES:
Deepak Nath, CEO
Anne-Françoise Nesmes, CFO
Mizanu Kebede, Chief Quality and Regulatory Affairs Officer
Brad Cannon, President, Orthopaedics,
Sports Medicine & ENT and Americas
Simon Fraser, President, Advanced Wound Management and Global Commercial Operations
Vasant Padmanabhan, President of Research & Development
Smith+Nephew has gone through quite a few CEOs over the past four years.
In 2018, seven-year leader Olivier Bohuon retired. Namal Nawana, who had led rapid diagnostics firm Alere and oversaw its $5.3 billion acquisition by Abbott Labs in 2017, was then tagged to take the U.K.-based firm’s helm. However, Nawana left Smith+Nephew “by mutual agreement” after a year and a half as CEO, but several outlets reported his departure was because the company was unable to meet his remuneration demands. Apparently, he was compensated more handsomely at Alere.
Enter Roland Diggelmann, CEO of Roche Diagnostics as well as non-executive Smith+Nephew board member since 2018. And less than a year later, he was handed an unforeseen event that stifled elective surgeries across the world—for which Smith+Nephew is a major technological supplier—the COVID-19 pandemic.
Alas, he too left “by mutual agreement” after less than two years in the top job, as the company announced this past February. However, it’s unclear whether Diggelmann left because the pressure of leading Smith+Nephew through a pandemic was too much, or because the company’s fourth-quarter revenues last year missed analyst expectations, with global supply chain disruption continuing to hamper orthopedics sales.
Next in line is Deepak Nath, president of Siemens Healthineers’ diagnostics business, who began inhabiting the top office on April 1. His experience in the medtech industry is vast—before Siemens, he held senior roles in R&D, marketing, commercial, and divisional leadership at Abbott Labs, eventually rising to president of Abbott Vascular. There, he had a significant role in Abbott’s $28 billion buyout of St. Jude Medical. He also worked at Amgen and McKinsey and Company.
“[Nath] is joining us at an inflection point for the business and will bring his drive, experience, and expertise to lead the team in delivering our strategy for growth at pace,” Smith+Nephew chairman Roberto Quarta said in a press release.
“Smith+Nephew is a great company with innovation at its core and a purpose of Life Unlimited, supporting patients around the world in returning to a healthy and fulfilled life,” Nath told the press. “I am honored to have been given the opportunity to lead the business. I look forward to building on Smith+Nephew’s rich history and heritage and working with the team to take it to the next level of growth.”
In 2021, Smith+Nephew’s performance recovered somewhat from the stifling effects of COVID-19 on medtech companies operating in the elective surgery theater. The company’s $5.21 billion of revenue last year approached pre-pandemic levels, growing 14.2% over the prior year. Margin and earnings also improved, but according to the company’s annual report, are still some ways behind pre-pandemic levels. According to Chair Roberto Quarta’s statement in the annual report, it was partly a matter of choice as the company made investments in increased R&D for new products and early-stage acquisitions. It was also a result of higher logistics and supply chain cost inflation.
Orthopaedics franchise revenue reached $2.16 billion in 2021, rising 12.5% over the previous year. Though it posted an increase, performance was stifled by COVID-19’s consequences on elective surgeries and near-term supply constraints, according to the company’s annual report. Knee Implants made up $876 million of the business’s sales, growing 6.6%. The segment’s performance was impacted by Chinese distributor ordering patterns ahead of a new volume-based procurement tendering program.
The JOURNEY II medial dished for total knee replacement and SYNC performance instruments were introduced in September. The tibial insert for JOURNEY II aims to optimize knee kinematics via a more constraining medial design, allowing the option of not cutting a PS box in the femur and either retaining or sacrificing the posterior cruciate ligament. SYNC performance instruments tout a new ergonomic design, reduced number of instruments, and compact tray design for a streamlined, user-friendly solution for surgeons. A customized tray configuration also helps minimize OR footprint and reduce central sterilization burden.
November saw the momentous launch of the company’s next-gen knee replacement, the LEGION CONCELOC cementless total knee system. The implant’s “advanced porous titanium” is 3D printed, created in a virtual environment, and manufactured additively to optimize porous structure and promote bony ingrowth. Its asymmetric keel helps achieve more immediate bone fixation.
“I’m excited for how this technology may lead to improved operating room efficiency while eliminating many of the past and current challenges of cementless knee designs,” Dr. Mathias Bostrom, an orthopedic surgeon at the Hospital for Special Surgery in New York City, and one of the system’s designing surgeons, told the press.
The Real Intelligence suite of enabling technologies including the CORI surgical robotic system hit the Australian and New Zealand markets last June. A month later the robotics-assisted orthopedic surgery solution entered the market in India, and came to the Canadian market in November.
CORI handheld robotics for total and partial knee replacement was launched in November. The compact, mobile device incorporates a 3D intraoperative imaging system with a robotic sculpting tool so surgeons can measure, plan, and perform a personalized knee surgery. According to Smith+Nephew, it’s so compact it can be moved from theater to theater to optimize patient flow through surgical units.
Hip Implants generated $612 million last year, growing 7.8%. The hips business was also affected by Chinese distributor ordering patterns as was the Knee Implant franchise.
During last year’s American Academy of Orthopaedic Surgeons (AAOS) annual meeting, Smith+Nephew unveiled a preview of RI.HIP navigation for the CORI surgical robotic system. The software release expands the company’s robotics platform to total hip arthroplasty to allow computer-guided (navigated) hip surgery in hospitals, outpatient departments, and ambulatory surgical centers.
Trauma & Extremities continued to be an expanding business for the company, shooting up 25.4% to reach $576 million. The growth was primarily due to the completion of the deal for Integra LifeScience’s extremities business, now fully integrated into Smith+Nephew’s portfolio.
Smith+Nephew completed the $240 million deal last January, gaining a complementary shoulder replacement and upper and lower extremities portfolio as well as a new product pipeline. The deal included a next-gen shoulder replacement expected to be ready for launch this year.
The franchise launched two new products at last year’s AAOS meeting. The Cadence total ankle flat cut talar dome system treats end-stage ankle arthritis in patients with varying anatomies and deformities for primary and revision surgeries via one simple cut on the talus. Atlasplan shoulder 3D planning was developed with Materialise for a web-based interface for shoulder arthroplasty pre-op planning and patient-specific surgical guide using the coracoid’s base for stability, fostering reproducible guide pin placement. Patient-specific instrumentation was also released for shoulder replacement.
Other Reconstruction makes up the remaining revenue for the Orthopaedics business, and its 2021 proceeds rose an impressive 34.1% to $92 million.
The ARIA Home PT remote physical therapy system launched last May. It leverages telehealth tools from licensed physical therapists and digital avatar-based guidance to help deliver improve patient adherence and cost reduction. 3D motion-tracking for the home educates, engages, and guides patients through their PT regimen and generates data for clinician and physical therapist review. Tele-consultation is also available between patients and their doctors.
The Sports Medicine & ENT franchise returned 17% revenue growth with 2021 sales of $1.56 billion. Profit was up 50% against 2020 for the franchise. Sports Medicine Joint Repair (SMJR) products garnered $839 million last year, growing 18.2% over the prior year due to strong U.S. sales of REGENETEN and NOVOSTITCH.
The FAST-FIX FLEX meniscal repair system rolled out last July. According to the company, at the time it was the only device offering a surgeon-guided, bendable needle and shaft to access all meniscal zones, enabling the opportunity to repair the meniscus instead of removing it. Its all-inside approach can remove the need for further incisions, reduce neurovascular injury risk, and support faster operating times. FAST-FIX FLEX also features 25% needle insertion area reduction and repair over 20% stronger than the company’s previous generation device.
Arthroscopic Enabling Technologies (AET) collected $590 million last year, posting a rise of 14.1%.
Last April saw the release of new enabling technologies for the company’s INTELLIO connected tower, the DOUBLEFLO inflow/outflow pump and 4KO arthroscopes and laparoscopes. DOUBLEFLO can be controlled remotely via an app and provides heads-up display projection on the arthroscopic tower so the focus can remain on the patient instead of the equipment. 4KO direct view arthroscopes display a 30% minimum resolution increase compared to the company’s HD DV arthroscopes. They also provide C-mount and direct view coupling so surgeons can choose the scope that works best for them.
The WEREWOLF FASTSEAL 6.0 hemostasis wand was released last August, adding orthopedic reconstruction to the portfolio’s purview. Using low-temperature thermal energy, it delivers hemostatic sealing during open procedures like total joint arthroplasty. The latest generation allows for one single tool to be used across sports medicine, ENT, and orthopedic procedures.
The ENT franchise captured $131 million of revenue to grow 23.3% over the previous year, despite COVID’s impact on the company’s introduction of the Tula device.
Advanced Wound Management segment revenue rose 14.2% to $1.5 billion. Advanced Wound Care (AWC) products grew 12.9% with $731 million in sales, driven by foam dressings. Advanced Wound Bioactives (AWB) sales increased 15.1% to $496 million thanks to the Osiris acquisition, and Advanced Wound Devices expanded 16% to $269 million because of demand for the negative pressure wound therapy and recovering elective surgery levels.
Last March Smith+Nephew also collaborated with Italy’s Movendo Technology to add Movendo’s HUNOVA multifunctional rehab device to its Real Intelligence enabling technologies for a fully digitized patient pathway from the pre-op stage to the post-rehab stage. The collaboration originally launched in Europe and expanded to other regions. HUNOVA can analyze 130 different lower limb biomechanic parameters before and after surgery, generating a bespoke functional evaluation knee index. This provides a personalized patient recovery program to support the return of the joint’s articulation strength and function. The index can also be extended to the hip and ankle.
$5.21 Billion
Prior Fiscal: $4.56 Billion
Percentage Change: +14.2%
R&D Expenditure: $356M
Best FY21 Quarter: Q4 $1.35B
Latest Quarter: $1.31B
No. of Employees: 18,369
Global Headquarters: London, U.K.
KEY EXECUTIVES:
Deepak Nath, CEO
Anne-Françoise Nesmes, CFO
Mizanu Kebede, Chief Quality and Regulatory Affairs Officer
Brad Cannon, President, Orthopaedics,
Sports Medicine & ENT and Americas
Simon Fraser, President, Advanced Wound Management and Global Commercial Operations
Vasant Padmanabhan, President of Research & Development
Smith+Nephew has gone through quite a few CEOs over the past four years.
In 2018, seven-year leader Olivier Bohuon retired. Namal Nawana, who had led rapid diagnostics firm Alere and oversaw its $5.3 billion acquisition by Abbott Labs in 2017, was then tagged to take the U.K.-based firm’s helm. However, Nawana left Smith+Nephew “by mutual agreement” after a year and a half as CEO, but several outlets reported his departure was because the company was unable to meet his remuneration demands. Apparently, he was compensated more handsomely at Alere.
Enter Roland Diggelmann, CEO of Roche Diagnostics as well as non-executive Smith+Nephew board member since 2018. And less than a year later, he was handed an unforeseen event that stifled elective surgeries across the world—for which Smith+Nephew is a major technological supplier—the COVID-19 pandemic.
Alas, he too left “by mutual agreement” after less than two years in the top job, as the company announced this past February. However, it’s unclear whether Diggelmann left because the pressure of leading Smith+Nephew through a pandemic was too much, or because the company’s fourth-quarter revenues last year missed analyst expectations, with global supply chain disruption continuing to hamper orthopedics sales.
Next in line is Deepak Nath, president of Siemens Healthineers’ diagnostics business, who began inhabiting the top office on April 1. His experience in the medtech industry is vast—before Siemens, he held senior roles in R&D, marketing, commercial, and divisional leadership at Abbott Labs, eventually rising to president of Abbott Vascular. There, he had a significant role in Abbott’s $28 billion buyout of St. Jude Medical. He also worked at Amgen and McKinsey and Company.
“[Nath] is joining us at an inflection point for the business and will bring his drive, experience, and expertise to lead the team in delivering our strategy for growth at pace,” Smith+Nephew chairman Roberto Quarta said in a press release.
“Smith+Nephew is a great company with innovation at its core and a purpose of Life Unlimited, supporting patients around the world in returning to a healthy and fulfilled life,” Nath told the press. “I am honored to have been given the opportunity to lead the business. I look forward to building on Smith+Nephew’s rich history and heritage and working with the team to take it to the next level of growth.”
In 2021, Smith+Nephew’s performance recovered somewhat from the stifling effects of COVID-19 on medtech companies operating in the elective surgery theater. The company’s $5.21 billion of revenue last year approached pre-pandemic levels, growing 14.2% over the prior year. Margin and earnings also improved, but according to the company’s annual report, are still some ways behind pre-pandemic levels. According to Chair Roberto Quarta’s statement in the annual report, it was partly a matter of choice as the company made investments in increased R&D for new products and early-stage acquisitions. It was also a result of higher logistics and supply chain cost inflation.
Orthopaedics franchise revenue reached $2.16 billion in 2021, rising 12.5% over the previous year. Though it posted an increase, performance was stifled by COVID-19’s consequences on elective surgeries and near-term supply constraints, according to the company’s annual report. Knee Implants made up $876 million of the business’s sales, growing 6.6%. The segment’s performance was impacted by Chinese distributor ordering patterns ahead of a new volume-based procurement tendering program.
The JOURNEY II medial dished for total knee replacement and SYNC performance instruments were introduced in September. The tibial insert for JOURNEY II aims to optimize knee kinematics via a more constraining medial design, allowing the option of not cutting a PS box in the femur and either retaining or sacrificing the posterior cruciate ligament. SYNC performance instruments tout a new ergonomic design, reduced number of instruments, and compact tray design for a streamlined, user-friendly solution for surgeons. A customized tray configuration also helps minimize OR footprint and reduce central sterilization burden.
November saw the momentous launch of the company’s next-gen knee replacement, the LEGION CONCELOC cementless total knee system. The implant’s “advanced porous titanium” is 3D printed, created in a virtual environment, and manufactured additively to optimize porous structure and promote bony ingrowth. Its asymmetric keel helps achieve more immediate bone fixation.
“I’m excited for how this technology may lead to improved operating room efficiency while eliminating many of the past and current challenges of cementless knee designs,” Dr. Mathias Bostrom, an orthopedic surgeon at the Hospital for Special Surgery in New York City, and one of the system’s designing surgeons, told the press.
The Real Intelligence suite of enabling technologies including the CORI surgical robotic system hit the Australian and New Zealand markets last June. A month later the robotics-assisted orthopedic surgery solution entered the market in India, and came to the Canadian market in November.
CORI handheld robotics for total and partial knee replacement was launched in November. The compact, mobile device incorporates a 3D intraoperative imaging system with a robotic sculpting tool so surgeons can measure, plan, and perform a personalized knee surgery. According to Smith+Nephew, it’s so compact it can be moved from theater to theater to optimize patient flow through surgical units.
Hip Implants generated $612 million last year, growing 7.8%. The hips business was also affected by Chinese distributor ordering patterns as was the Knee Implant franchise.
During last year’s American Academy of Orthopaedic Surgeons (AAOS) annual meeting, Smith+Nephew unveiled a preview of RI.HIP navigation for the CORI surgical robotic system. The software release expands the company’s robotics platform to total hip arthroplasty to allow computer-guided (navigated) hip surgery in hospitals, outpatient departments, and ambulatory surgical centers.
Trauma & Extremities continued to be an expanding business for the company, shooting up 25.4% to reach $576 million. The growth was primarily due to the completion of the deal for Integra LifeScience’s extremities business, now fully integrated into Smith+Nephew’s portfolio.
Smith+Nephew completed the $240 million deal last January, gaining a complementary shoulder replacement and upper and lower extremities portfolio as well as a new product pipeline. The deal included a next-gen shoulder replacement expected to be ready for launch this year.
The franchise launched two new products at last year’s AAOS meeting. The Cadence total ankle flat cut talar dome system treats end-stage ankle arthritis in patients with varying anatomies and deformities for primary and revision surgeries via one simple cut on the talus. Atlasplan shoulder 3D planning was developed with Materialise for a web-based interface for shoulder arthroplasty pre-op planning and patient-specific surgical guide using the coracoid’s base for stability, fostering reproducible guide pin placement. Patient-specific instrumentation was also released for shoulder replacement.
Other Reconstruction makes up the remaining revenue for the Orthopaedics business, and its 2021 proceeds rose an impressive 34.1% to $92 million.
The ARIA Home PT remote physical therapy system launched last May. It leverages telehealth tools from licensed physical therapists and digital avatar-based guidance to help deliver improve patient adherence and cost reduction. 3D motion-tracking for the home educates, engages, and guides patients through their PT regimen and generates data for clinician and physical therapist review. Tele-consultation is also available between patients and their doctors.
The Sports Medicine & ENT franchise returned 17% revenue growth with 2021 sales of $1.56 billion. Profit was up 50% against 2020 for the franchise. Sports Medicine Joint Repair (SMJR) products garnered $839 million last year, growing 18.2% over the prior year due to strong U.S. sales of REGENETEN and NOVOSTITCH.
The FAST-FIX FLEX meniscal repair system rolled out last July. According to the company, at the time it was the only device offering a surgeon-guided, bendable needle and shaft to access all meniscal zones, enabling the opportunity to repair the meniscus instead of removing it. Its all-inside approach can remove the need for further incisions, reduce neurovascular injury risk, and support faster operating times. FAST-FIX FLEX also features 25% needle insertion area reduction and repair over 20% stronger than the company’s previous generation device.
Arthroscopic Enabling Technologies (AET) collected $590 million last year, posting a rise of 14.1%.
Last April saw the release of new enabling technologies for the company’s INTELLIO connected tower, the DOUBLEFLO inflow/outflow pump and 4KO arthroscopes and laparoscopes. DOUBLEFLO can be controlled remotely via an app and provides heads-up display projection on the arthroscopic tower so the focus can remain on the patient instead of the equipment. 4KO direct view arthroscopes display a 30% minimum resolution increase compared to the company’s HD DV arthroscopes. They also provide C-mount and direct view coupling so surgeons can choose the scope that works best for them.
The WEREWOLF FASTSEAL 6.0 hemostasis wand was released last August, adding orthopedic reconstruction to the portfolio’s purview. Using low-temperature thermal energy, it delivers hemostatic sealing during open procedures like total joint arthroplasty. The latest generation allows for one single tool to be used across sports medicine, ENT, and orthopedic procedures.
The ENT franchise captured $131 million of revenue to grow 23.3% over the previous year, despite COVID’s impact on the company’s introduction of the Tula device.
Advanced Wound Management segment revenue rose 14.2% to $1.5 billion. Advanced Wound Care (AWC) products grew 12.9% with $731 million in sales, driven by foam dressings. Advanced Wound Bioactives (AWB) sales increased 15.1% to $496 million thanks to the Osiris acquisition, and Advanced Wound Devices expanded 16% to $269 million because of demand for the negative pressure wound therapy and recovering elective surgery levels.
Last March Smith+Nephew also collaborated with Italy’s Movendo Technology to add Movendo’s HUNOVA multifunctional rehab device to its Real Intelligence enabling technologies for a fully digitized patient pathway from the pre-op stage to the post-rehab stage. The collaboration originally launched in Europe and expanded to other regions. HUNOVA can analyze 130 different lower limb biomechanic parameters before and after surgery, generating a bespoke functional evaluation knee index. This provides a personalized patient recovery program to support the return of the joint’s articulation strength and function. The index can also be extended to the hip and ankle.