07.27.07
$2.8 Billion
Key Executives:
David Illingworth, CEO
Joseph DeVivo, President, Orthopaedic Reconstruction
Mark Augusti, President, Orthopaedic Trauma and Clinical Therapies
Michael Frazzette, President, Smith & Nephew Endoscopy
Joe Woody, President, Advanced Wound Management
No. of Employees: 8,830
World Headquarters: London, United Kingdom
As a key player in the orthopedic reconstruction business, Smith & Nephew proved in 2006 that it will continue to exercise dominance in orthopedic devices. Amid a flurry of product launches and acquisitions, the company increased its annual revenue by 9% compared with 2005, totaling $2.8 million in 2006.
The year started with a decision to split its orthopedic business unit into two separate global units: Orthopaedic Reconstruction and Orthopaedic Trauma and Clinical Therapies. These two newly formed units contributed $919 million (10% growth) and $497 million (13%), respectively, to FY 2006 revenue.
Some of the most notable product launches in the Reconstruction unit included the Journey knee, the Birmingham Hip Resurfacing system (in the United States) and Emperion hip system. Adding to the bottom line in 2006 were the late-2005 launches of Legion and Anthology. New products contributed 15% of the unit’s total sales in 2006.
Meanwhile, the Trauma group launched an upper extremity system for the Peri-Loc Periarticular Locked Plating System, as well as the Intertan Intertrochanteric Antegrade Nail for treatment of femoral fractures, the Meta Nail for fractures of the femur and tibia, and the Exogen 4000+ Bone Healing System. The company also received FDA approvals for 6.5 mm and 8 mm Cannulated Screws (April), Caption Disposable Platelet Concentrator (May) and Peri-Loc B Plates (September). The Trauma group also formed a strategic alliance with Q-Med AB (a Swedish company) as a means of gaining share of Q-Med’s propriety technology for the production of stabilized non-animal hyaluronic acid for orthopedic applications. As part of this agreement, Smith & Nephew gained rights to market, sell and distribute Durolane single-injection hyaluronic acid therapy (approved in Europe and Canada).
Non-orthopedic units had mixed results. The Endoscopy segment grew 9% in 2006, adding $665 million to the company’s total sales. Some of its notable launches included the Calaxo Osteoconductive Interface Screw, the Bioraptor Hip Suture Anchor, the Hip Positioning System and the Kinsa Suture Anchor. In addition, the company launched digital products, such as the 660HD Image Management System and the Condor Control System.
Advanced Wound Management had a flat year, with $698 million in sales, a 1% increase. The division launched enhanced Allevyn Non-Adhesive dressings in Europe, which expands upon the Allevyn Adhesive and Sacrum introduced in early 2006.
In terms of total revenue for Smith & Nephew, nearly half of all sales occurred in the United States, which contributed nearly $1.4 billion, an 8% increase since 2005. Europe contributed $867 million, a rise of 6% over the last year. Other regions, including Japan, added $547 million to the bottom line, reflecting a 12% increase
In attempts to bolster its sales in Europe, Smith & Nephew shelled out $72 million in July 2006 for OsteoBiologics Inc., which markets bioabsorbable bone graft substitutes and provides the only off-the-shelf bioabsorbable implant for articular cartilage repair on the European market.
In legal news, Smith & Nephew was granted a favorable court ruling against Synthes in October 2006. The dispute drew its roots in November 2002, when Smith & Nephew brought Synthes to court on issues related to patent infringement. A permanent injection mandated that Synthes could no longer sell or promote the Synthes Trochanteric Fixation Nail and Proximal Fixation Nail products in the United States for the use of repairing intertrochanteric fractures.
Of course, the year wouldn’t complete for the orthopedic industry, it seems, without a subpoena for the major players. Smith & Nephew was one of five companies in the industry to receive subpoenas from the US Attorney’s Office concerning possible antitrust law violations relating to the sale of implants. Investigations are ongoing.
The year wrapped up with Smith & Nephew expressing interest and then terminating speculation that it would merge with Biomet Inc. and become one business. Biomet has since been the target of a private equity group (for more information, read Top of the News on page 12).
Foreseeable change is in the air for Smith & Nephew, with the first half of 2007 reflecting a time of executive realignment, more product launches and key acquisitions.
Major switches in executive posts were unveiled in early 2007, with the most significant announcement being that Smith & Nephew’s chief executive, Sir Christopher O’Donnell, would retire on July 31. A nearly 20-year employee of the company who served in his post since 1998, O’Donnell was responsible for streamlining the company from nine divisions to its current four. His replacement is David Illingworth, former COO, who assumed responsibility as chief executive on July 1.
In the first half of 2007, Smith & Nephew’s Advanced Wound Management business hit the ground running in mergers and acquisitions. In January, the division announced an agreement with UDL Laboratories Inc., a subsidiary of Mylan Laboratories Inc., to exclusively distribute Biobrane Biosynthetic Wound Dressing outside the United States. In line with the company’s expansion initiatives, the Advanced Wound Management division announced in March an agreement with Covalon Technologies for its advanced range of collagen dressings and became the sole distributor of ColActive.
Additionally, in May, the division agreed to purchase BlueSky Medical Group Inc. for $15 million (plus additional payments depending on performance). BlueSky manufactures negative pressure pumps and wound dressing kits. According to Smith & Nephew, its strategy in purchasing this company is to enter the “fastest growing segment of the advanced wound care market.”
In the same month, Smith & Nephew entered into a global distribution agreement with Teknimed SA to distribute, market and sell Teknimed’s Spine Fix bone cement product (for treatment of spinal compression fractures) in North America, Europe and Australia.
Most recently, Smith & Nephew acquired Plus Orthopedics Holding AG, a private Swiss company, in June, for $889 million. According to Smith & Nephew, this purchase will double the company’s share in the European reconstruction market, and the combined company will become the third largest orthopedic business in Germany. The acquisition also increases Smith & Nephew’s presence in Asia. Plus Orthopedics, an implant manufacturer, had $300 million in revenues in 2006.
Key Executives:
David Illingworth, CEO
Joseph DeVivo, President, Orthopaedic Reconstruction
Mark Augusti, President, Orthopaedic Trauma and Clinical Therapies
Michael Frazzette, President, Smith & Nephew Endoscopy
Joe Woody, President, Advanced Wound Management
No. of Employees: 8,830
World Headquarters: London, United Kingdom
As a key player in the orthopedic reconstruction business, Smith & Nephew proved in 2006 that it will continue to exercise dominance in orthopedic devices. Amid a flurry of product launches and acquisitions, the company increased its annual revenue by 9% compared with 2005, totaling $2.8 million in 2006.
The year started with a decision to split its orthopedic business unit into two separate global units: Orthopaedic Reconstruction and Orthopaedic Trauma and Clinical Therapies. These two newly formed units contributed $919 million (10% growth) and $497 million (13%), respectively, to FY 2006 revenue.
Some of the most notable product launches in the Reconstruction unit included the Journey knee, the Birmingham Hip Resurfacing system (in the United States) and Emperion hip system. Adding to the bottom line in 2006 were the late-2005 launches of Legion and Anthology. New products contributed 15% of the unit’s total sales in 2006.
Meanwhile, the Trauma group launched an upper extremity system for the Peri-Loc Periarticular Locked Plating System, as well as the Intertan Intertrochanteric Antegrade Nail for treatment of femoral fractures, the Meta Nail for fractures of the femur and tibia, and the Exogen 4000+ Bone Healing System. The company also received FDA approvals for 6.5 mm and 8 mm Cannulated Screws (April), Caption Disposable Platelet Concentrator (May) and Peri-Loc B Plates (September). The Trauma group also formed a strategic alliance with Q-Med AB (a Swedish company) as a means of gaining share of Q-Med’s propriety technology for the production of stabilized non-animal hyaluronic acid for orthopedic applications. As part of this agreement, Smith & Nephew gained rights to market, sell and distribute Durolane single-injection hyaluronic acid therapy (approved in Europe and Canada).
Non-orthopedic units had mixed results. The Endoscopy segment grew 9% in 2006, adding $665 million to the company’s total sales. Some of its notable launches included the Calaxo Osteoconductive Interface Screw, the Bioraptor Hip Suture Anchor, the Hip Positioning System and the Kinsa Suture Anchor. In addition, the company launched digital products, such as the 660HD Image Management System and the Condor Control System.
Advanced Wound Management had a flat year, with $698 million in sales, a 1% increase. The division launched enhanced Allevyn Non-Adhesive dressings in Europe, which expands upon the Allevyn Adhesive and Sacrum introduced in early 2006.
In terms of total revenue for Smith & Nephew, nearly half of all sales occurred in the United States, which contributed nearly $1.4 billion, an 8% increase since 2005. Europe contributed $867 million, a rise of 6% over the last year. Other regions, including Japan, added $547 million to the bottom line, reflecting a 12% increase
In attempts to bolster its sales in Europe, Smith & Nephew shelled out $72 million in July 2006 for OsteoBiologics Inc., which markets bioabsorbable bone graft substitutes and provides the only off-the-shelf bioabsorbable implant for articular cartilage repair on the European market.
In legal news, Smith & Nephew was granted a favorable court ruling against Synthes in October 2006. The dispute drew its roots in November 2002, when Smith & Nephew brought Synthes to court on issues related to patent infringement. A permanent injection mandated that Synthes could no longer sell or promote the Synthes Trochanteric Fixation Nail and Proximal Fixation Nail products in the United States for the use of repairing intertrochanteric fractures.
Of course, the year wouldn’t complete for the orthopedic industry, it seems, without a subpoena for the major players. Smith & Nephew was one of five companies in the industry to receive subpoenas from the US Attorney’s Office concerning possible antitrust law violations relating to the sale of implants. Investigations are ongoing.
The year wrapped up with Smith & Nephew expressing interest and then terminating speculation that it would merge with Biomet Inc. and become one business. Biomet has since been the target of a private equity group (for more information, read Top of the News on page 12).
Foreseeable change is in the air for Smith & Nephew, with the first half of 2007 reflecting a time of executive realignment, more product launches and key acquisitions.
Major switches in executive posts were unveiled in early 2007, with the most significant announcement being that Smith & Nephew’s chief executive, Sir Christopher O’Donnell, would retire on July 31. A nearly 20-year employee of the company who served in his post since 1998, O’Donnell was responsible for streamlining the company from nine divisions to its current four. His replacement is David Illingworth, former COO, who assumed responsibility as chief executive on July 1.
In the first half of 2007, Smith & Nephew’s Advanced Wound Management business hit the ground running in mergers and acquisitions. In January, the division announced an agreement with UDL Laboratories Inc., a subsidiary of Mylan Laboratories Inc., to exclusively distribute Biobrane Biosynthetic Wound Dressing outside the United States. In line with the company’s expansion initiatives, the Advanced Wound Management division announced in March an agreement with Covalon Technologies for its advanced range of collagen dressings and became the sole distributor of ColActive.
Additionally, in May, the division agreed to purchase BlueSky Medical Group Inc. for $15 million (plus additional payments depending on performance). BlueSky manufactures negative pressure pumps and wound dressing kits. According to Smith & Nephew, its strategy in purchasing this company is to enter the “fastest growing segment of the advanced wound care market.”
In the same month, Smith & Nephew entered into a global distribution agreement with Teknimed SA to distribute, market and sell Teknimed’s Spine Fix bone cement product (for treatment of spinal compression fractures) in North America, Europe and Australia.
Most recently, Smith & Nephew acquired Plus Orthopedics Holding AG, a private Swiss company, in June, for $889 million. According to Smith & Nephew, this purchase will double the company’s share in the European reconstruction market, and the combined company will become the third largest orthopedic business in Germany. The acquisition also increases Smith & Nephew’s presence in Asia. Plus Orthopedics, an implant manufacturer, had $300 million in revenues in 2006.