07.01.06
$4.9 Billion
Key Executives:
John W. Brown, Chairman
Stephen P. MacMillan, President and CEO
Luciano Cattani, Group President, International
Ron Lawson, Executive VP
Stephen S. Johnson, VP and Group President—MedSurg
James E. Kemler, VP and Group President—Biotech, Spine & Trauma Operations
James R. Lawson, VP and Group President—Orthopedics and International
Dean H. Bergy, VP and Chief Financial Officer
No. of Employees: 17,265
Corporate Headquarters: Kalamazoo, Michigan
With a new CEO firmly entrenched in the company, Stryker has transitioned pretty smoothly. After former president John Brown stepped down last year—marking the end of his 28-year tenure with the company—present CEO Stephen MacMillan has been positioning the company for growth amid a changing regulatory and reimbursement climate and sidestepping the various obstacles that are sure to challenge the company in coming years.
The company reported a 14% increase in sales, to $4.9 billion, in 2005, of which about two thirds stemmed from domestic revenues ($3.2 billion). Biotech, Instruments, Medical, Endoscopy, Spine and Trauma divisions were the stellar performers of the company, while Orthopedic faced some tougher times but still managed to post increases. Sales started picking up toward the end of 2005, and orthopedic implant sales increased 11% to $2.9 billion, partially due to the move to have a Stryker veteran head up the division. Mike Mogul, the new head, was previously called on to revamp the company’s German business. The orthopedic implant sector boasted increases in everything from hips (4%), knees (14%), spinal (17%) and micro-implants (12%).
With 35% of Stryker’s overall sales coming from abroad, areas such as Japan remain lucrative, as the company has positioned itself at the top of the trauma market there, with sales growing twice as fast as the market itself. Sales of the Scorpio NRG knee implant—designed specifically for Japanese patients—were also increased by twice the rate of the market.
The United Kingdom was another successful market. In 2005, based on long-term patient outcomes, Stryker received a 10A “gold standard” rating from the UK’s Orthopaedic Data Evaluation Panel for the Exeter hip system. In addition, sales of Stryker’s postoperative pain products tripled from 2004 to 2005.
In Australia, Stryker has maintained its top market share hold in areas such as total hip replacement, CMF and powered surgical instruments. The top-selling single product for the company is the OP-1 implant for bone fractures.
Back in the United States, Stryker saw its Medical division grow at two times the rate of the market. With all the gains in overall business, a new facility was opened in Dallas, TX for the Communications and Imaging divisions.
The MedSurg business, already successful in the United States, is expected to capture a larger share of the global market in time, particularly in China and the United Kingdom. In 2005, sales were $1.8 billion, an increase of 21%.
The Endoscopy division also remains a winner, as sales have more than doubled those of the entire company in 1990, when the division was created.
Poising itself in the competitive industry, Stryker formed or renewed alliances with prestigious institutions such as The Cleveland Clinic, the Mayo Clinic and Memorial Hermann Hospital.
Acquisitions continue to play a large role in the moving the company forward as a market leader. Earlier this year, Stryker continued its acquisition strategy by purchasing Sightline Technologies for $50 million (along with additional payments of up to $90 million, depending on factors such as performance). Sightline develops flexible endoscopes for the gastrointestinal and other market segments; it recently developed a technology that is expected to improve insertion and sterilization during colonoscopy procedures.
PlasmaSol Corp., which has a technology that offers Stryker the ability to provide sterilization equipment for use with certain MedSurg Equipment products, was also acquired for $17.5 million in the fourth quarter of 2005.
In early 2005, the company’s acquisition of eTrauma for $50 million helped position Stryker as the market leader in digital imaging for orthopedic clinics. The OfficePACS (Picture Archive and Communications System) is currently being used in only about 10% of US orthopedic practices, but the company believes the market will expand greatly over time. In the third quarter of 2005, OrthoPad was introduced as a complement to OfficePACS.
As seen with all the gains made in 2005, the company is continuing its winning streak in 2006, having already seen a 10% increase in net sales for the first quarter. In addition, orthopedic implant sales are up 7%, while MedSurg Equipment sales jumped nearly 16%. The overall revenue would have been higher had the company not needed to spend $53 million to write off purchased in-process R&D associated with the Sightline acquisition.
Looking ahead, projections for 2006 include a healthy continued growth of as much as 15%. The company will face some hurdles, though, as the potential remains for increased pricing pressure on implant products in the United States, Japan and other foreign markets. Also, positive currency gains seen in the past are forecasted to disappear.
However, the company is planning ahead for such potential downfalls by increasing its R&D efforts to churn out new products that will be anticipated to keep increasing profits over time.
The company was recently subpoenaed by the US Justice Department regarding possible anti-trust violations. This comes after Stryker was also subpoenaed by the US Attorney’s Office in March 2005 with a request for documents related to consulting and service agreements with physicians.
Key Executives:
John W. Brown, Chairman
Stephen P. MacMillan, President and CEO
Luciano Cattani, Group President, International
Ron Lawson, Executive VP
Stephen S. Johnson, VP and Group President—MedSurg
James E. Kemler, VP and Group President—Biotech, Spine & Trauma Operations
James R. Lawson, VP and Group President—Orthopedics and International
Dean H. Bergy, VP and Chief Financial Officer
No. of Employees: 17,265
Corporate Headquarters: Kalamazoo, Michigan
With a new CEO firmly entrenched in the company, Stryker has transitioned pretty smoothly. After former president John Brown stepped down last year—marking the end of his 28-year tenure with the company—present CEO Stephen MacMillan has been positioning the company for growth amid a changing regulatory and reimbursement climate and sidestepping the various obstacles that are sure to challenge the company in coming years.
The company reported a 14% increase in sales, to $4.9 billion, in 2005, of which about two thirds stemmed from domestic revenues ($3.2 billion). Biotech, Instruments, Medical, Endoscopy, Spine and Trauma divisions were the stellar performers of the company, while Orthopedic faced some tougher times but still managed to post increases. Sales started picking up toward the end of 2005, and orthopedic implant sales increased 11% to $2.9 billion, partially due to the move to have a Stryker veteran head up the division. Mike Mogul, the new head, was previously called on to revamp the company’s German business. The orthopedic implant sector boasted increases in everything from hips (4%), knees (14%), spinal (17%) and micro-implants (12%).
With 35% of Stryker’s overall sales coming from abroad, areas such as Japan remain lucrative, as the company has positioned itself at the top of the trauma market there, with sales growing twice as fast as the market itself. Sales of the Scorpio NRG knee implant—designed specifically for Japanese patients—were also increased by twice the rate of the market.
The United Kingdom was another successful market. In 2005, based on long-term patient outcomes, Stryker received a 10A “gold standard” rating from the UK’s Orthopaedic Data Evaluation Panel for the Exeter hip system. In addition, sales of Stryker’s postoperative pain products tripled from 2004 to 2005.
In Australia, Stryker has maintained its top market share hold in areas such as total hip replacement, CMF and powered surgical instruments. The top-selling single product for the company is the OP-1 implant for bone fractures.
Back in the United States, Stryker saw its Medical division grow at two times the rate of the market. With all the gains in overall business, a new facility was opened in Dallas, TX for the Communications and Imaging divisions.
The MedSurg business, already successful in the United States, is expected to capture a larger share of the global market in time, particularly in China and the United Kingdom. In 2005, sales were $1.8 billion, an increase of 21%.
The Endoscopy division also remains a winner, as sales have more than doubled those of the entire company in 1990, when the division was created.
Poising itself in the competitive industry, Stryker formed or renewed alliances with prestigious institutions such as The Cleveland Clinic, the Mayo Clinic and Memorial Hermann Hospital.
Acquisitions continue to play a large role in the moving the company forward as a market leader. Earlier this year, Stryker continued its acquisition strategy by purchasing Sightline Technologies for $50 million (along with additional payments of up to $90 million, depending on factors such as performance). Sightline develops flexible endoscopes for the gastrointestinal and other market segments; it recently developed a technology that is expected to improve insertion and sterilization during colonoscopy procedures.
PlasmaSol Corp., which has a technology that offers Stryker the ability to provide sterilization equipment for use with certain MedSurg Equipment products, was also acquired for $17.5 million in the fourth quarter of 2005.
In early 2005, the company’s acquisition of eTrauma for $50 million helped position Stryker as the market leader in digital imaging for orthopedic clinics. The OfficePACS (Picture Archive and Communications System) is currently being used in only about 10% of US orthopedic practices, but the company believes the market will expand greatly over time. In the third quarter of 2005, OrthoPad was introduced as a complement to OfficePACS.
As seen with all the gains made in 2005, the company is continuing its winning streak in 2006, having already seen a 10% increase in net sales for the first quarter. In addition, orthopedic implant sales are up 7%, while MedSurg Equipment sales jumped nearly 16%. The overall revenue would have been higher had the company not needed to spend $53 million to write off purchased in-process R&D associated with the Sightline acquisition.
Looking ahead, projections for 2006 include a healthy continued growth of as much as 15%. The company will face some hurdles, though, as the potential remains for increased pricing pressure on implant products in the United States, Japan and other foreign markets. Also, positive currency gains seen in the past are forecasted to disappear.
However, the company is planning ahead for such potential downfalls by increasing its R&D efforts to churn out new products that will be anticipated to keep increasing profits over time.
The company was recently subpoenaed by the US Justice Department regarding possible anti-trust violations. This comes after Stryker was also subpoenaed by the US Attorney’s Office in March 2005 with a request for documents related to consulting and service agreements with physicians.