07.22.21
Rank: #21 (Last year: #21)
$4.56 Billion
Prior Fiscal: $5.13 Billion
Percentage Change: -11.1%
No. of Employees: 17,914
Global Headquarters: London, United Kingdom
KEY EXECUTIVES:
Roberto Quarta, Board Chairman
Roland Diggelmann, CEO
Anne-Françoise Nesmes, CFO
Mark Gladwell, President, Operations and GBS
Melissa Guerdan, Chief Quality and Regulatory Affairs Officer
Vasant Padmanabhan, President, Research and Development
Catheryn O’Rourke, Chief Legal and Compliance Officer
Phil Cowdy, Chief Business Development and Corporate Affairs Officer
Peter Coenen, President, Europe, Middle East, and Africa
Myra Eskes, President, APAC Region
Brad Cannon, President, Sports Medicine & ENT
Simon Fraser, President, Advanced Wound Management
Skip Kiil, President, Orthopaedics
The worldwide pandemic had a devastating impact on public health over the last 18 months. Unrelenting in its virulence and unwavering in intensity, SARS-CoV-2 has killed nearly 4 million people worldwide, (officially) infected 183.8 million others, and left tens of thousands with debilitating long-term complications.
Its effect on the human psyche has been equally as devastating: stress, insomnia, poor appetite, substance abuse, anxiety, and depression. The latter two consequences, in fact, have become more prevalent since the virus first surfaced—federal data show that four in 10 U.S. adults have felt anxious or depressed during the pandemic, up from one in 10 adults who experienced those feelings between January and June 2019. Young adults (ages 18-24) have been most affected by the pandemic—statistics indicate that more than half (56.2 percent) have struggled with anxiety or depression in the past year, and a higher proportion (25 percent vs. 13 percent of all grownups) have turned to alcohol or drugs to cope with their radically altered lives.
One of the pandemic’s more disturbing and unspoken mental health offshoots, however, is the collective penchant for excuse-making. Over the last 18 months, COVID-19 has gradually become a catch-all justification for indulging people’s fears, failures, and flaws.
Not ready for office work? Blame COVID-19.
Can’t find staff? Still unemployed? Curse the pandemic.
Real estate unaffordable? Cars, too? SARS-CoV-2 strikes again.
And again.
And again.
“I keep hearing, ‘Due to COVID, we can’t do this’ or ‘Due to COVID, we aren’t able to do that,’” Robert Rahal, Veterans Patient Experience Officer at the VA Central California Healthcare System in Fresno, wrote in a Feb. 25 Beryl Institute blog post. “Has the pandemic brought limitations to our table? Of course! But let’s not blame it for everything. Aren’t we far enough along in this pandemic that we, as leaders, have figured out ways to overcome the challenges? Understandably, there are reasons for not being able to do certain things...As organizations, let’s stop making excuses. Stop blaming COVID.”
Rahal is not asking for the impossible. Many individuals and businesses thrived last year in spite of the pandemic: Amwell (telemedicine), 3M (personal protection equipment), Pfizer (pharmaceuticals), HelloFresh (meal delivery), Peloton (fitness), and Amazon all generated healthy profits in 2020 as lockdowns and social distancing measures accelerated society’s digital transformation.
ANALYST INSIGHTS: S&N is doing its best to try to keep up with Stryker and Zimmer in the robotics, navigation, and enabling technologies game. They are making positive moves in the ASC market. It will be interesting to watch how that translates in the next year to global market share in their core Ortho segments.
Smith+Nephew plc didn’t exactly thrive during the pandemic last year but it didn’t make excuses for its disappointing performance, either. Rather, the company continued to serve its customers and communities worldwide while working to further its mission of Life Unlimited.
No excuses.
“COVID-19 will have a lasting impact on our business and our markets,” Smith+Nephew’s 2020 Annual Report stated. “While it has presented significant challenges, it has also given us a unique opportunity to put in place new approaches to serve our customers better than ever before.”
Those new approaches (thus far) mostly involved online training and education programs. Last March, for example, Smith+Nephew launched a virtual surgeon-centric instructional program focused on surgical techniques and product safety. More than 11,000 healthcare professionals attended in the first month.
The company also set up a 24/7 helpline for U.S. patients and clinicians to educate them about advanced wound management devices and procedures, as well as general wound-related issues.
In addition, Smith+Nephew began evaluating its customer approaches last year in order to establish new, creative ways to meet clients’ needs while driving growth. The initiative aims to improve efficiency throughout the product lifecycle, enhance customer-focused digital technology use, reduce healthcare costs, and boost patient care levels.
“COVID-19 has required companies worldwide to adapt to new ways of working,” the company’s annual report noted. “In July, Smith+Nephew launched its ‘New Normal’ program, with the objective of using the experience of the early months of COVID-19 to identify, align or accelerate existing efforts to prepare us for what comes next in our marketplace.”
No excuses.
Collaboration and community support is likely to figure into the company’s future based on its most recent past. Last year, Smith+Nephew worked with InTech Industries Inc. (Birmingham, Ala.) to ramp up face shield production, and partnered with the University of Oxford and King’s College London to develop a low-cost ventilator (OxVent). The company also used its 3D printers to produce PPE for a non-profit organization in Memphis, Tenn.
No excuses.
Elective procedure cancellations/postponements proved to be a major blow to Smith+Nephew’s finances last year, but the setback failed to prevent the company from innovating or reinforcing its prospects for long-term growth. The United Kingdom-based firm released a slew of new devices in 2020, including a robotics system, a suite of connected sports medicine surgical tools, and a business and management patient management platform to help customers expand outpatient care.
“Faced with a global pandemic we could easily have made excuses. We did not,” Smith+Nephew CEO Roland Diggelmann told shareholders in the annual report. “Throughout this period we prioritized the health and safety of employees, continued to support our customers and communities, and at the same time undertook important work to strengthen the Group. This included increasing investment in R&D, launching multiple new products, and making strategic acquisitions in higher growth segments. I am proud of the approach we took and the progress we made.”
Neither its approach nor progress, however, could prevent Smith+Nephew’s finances from imploding last year. The United Kingdom-based firm reported an 11.1 percent total sales decline (to $4.56 billion), a whopping 41.6 percent drop in trading profit (to $683 million from $1.169 billion), and a 25.2 percent reduction in earnings per share (to 51.3 cents from 68.6 cents). Operating profit fell nearly 100 percent, going from $815 million in 2019 to $295 million in 2020.
The company lost revenue in all geographic regions and in each of its three reporting segments. Orthopaedics suffered the biggest loss, as the worldwide slowdown in elective procedures drove down sales 13.7 percent to $1.92 billion and cut profit 41.6 percent to $389 million.
Hip implants benefited from the REDAPT Revision and OR3O Dual Mobility Hip systems. The former launched in China last fall after its blessing by the National Medical Products Administration, while the latter debuted in November 2019. Smith+Nephew designed REDAPT to address the challenges of revision total hip arthroplasty, including bone fixation, predictable stem positioning, joint stability, and surgical efficiency. It aims to help reduce revision total hip arthroplasties by decreasing the frequency of implant movement.
The REDAPT’s unveiling in China occurred six weeks after Smith+Nephew launched the RI Hip Navigation System for THA, a product intended to maximize accuracy and reproducibility to deliver patient-specific component alignment. RI Hip Navigation helps surgeons control a patient’s pelvic tilt, leg length, and offset measurement, as well as improve cup placement. The system—which does not require a CT scan—uses express workflows and image-free technology.
Despite the new product launches, though, hip implant revenue fell 7.5 percent in 2020 to $567 million. The company’s Trauma business was more resilient, but sales still slipped 5.7 percent to $460 million; strong EVOS Plating System sales in that unit helped minimize losses.
Other Reconstruction revenue posted the second-highest deficit in Orthopaedics despite the release of a next-generation handheld robotics system and digital surgery platform last summer. Designed for both total and unicompartmental knee arthroplasty, the CORI Surgical System is meant to replace Smith+Nephew’s original robotics solution, NAVIO. The CORI system is small and portable, making it ideal for ambulatory surgery centers and outpatient procedures. CORI’s camera technology is more than four times faster than its predecessor and its cutting abilities can handle twice the volume. Moreover, the system’s modular design allows the company to scale CORI to other types of orthopedic procedures.
“The CORI Surgical System is truly next-generation robotics. Its efficient handheld form factor is ideal for surgery centers, which is where the market is moving, and it just erases away bone with the new bone milling technique,” Jimmy Chow, M.D., orthopedic surgeon for Hip and Knee, Orthopedic Institute of the West, said upon the device’s release. “The smart, intuitive software helps place and size the implant as well as balance gaps based on patient-specific anatomy and disease state.”
The data analytics platform that accompanies CORI—called RI.INSIGHTS—enables clinicians to benchmark robotic surgery experiences with other users to optimize surgical planning and improve patient reported outcome measures. Previously, surgeons could not review complex robotic procedure information for individual patients or benchmark against their peers. But RI.INSIGHTS collects intra and post-op data during robotics-assisted procedures and presents the data alongside post-op patient outcomes, allowing surgeons to gain insights into robotics-assisted procedures.
“The RI.INSIGHTS platform maps the future of robotics and digital surgery,” Dinesh Nathwani, M.D., consultant orthopedic surgeon, Imperial College Healthcare, NHS Trust and The London Clinic, stated at RI.INSIGHTS’ release. “Robotics has proven accuracy, and using the wealth of individualized intra and post-op planning data that RI.INSIGHTS delivers, we can analyze surgical parameters like never before to provide the best customized robotic solutions for our patients.”
Since it was released on a limited basis last year, RI.INSIGHTS was powerless to prevent a 13 percent contraction in Other Reconstruction sales ($68 million total). Still, the decrease paled in comparison to the 21.1 percent abatement in Knee implant revenue (to $822 million).
In any other year, a new product would have boosted revenue in this category, but Smith+Nephew released its JOURNEY II Unicompartmental Knee System in North America and Europe as hospitals on both continents postponed or cancelled elective surgeries last spring. Bad timing.
The JOURNEY II system offers a patient-specific approach featuring a slimmer, more cost-effective two-tray configuration. The updated JOURNEY II knee adds a lateral-specific tibia baseplate and a greater range of femoral component and medial tibia baseplate sizes.
Besides the various sizes, the JOURNEY II’s femoral component is made with Oxinium, a zirconium alloy metal containing a ceramic zirconium oxide outer layer. Its hardness, low friction and resistance to scratches and abrasions make it more durable than cobalt-chrome alloys traditionally used in knee replacements. More than two million patients have been treated with Smith+Nephew implants made from OXINIUM technology.
“Smith+Nephew is proud to have an extensive history of innovation, highlighted by one of the flagship bearing materials in all of orthopaedics,” Randy Kilburn, senior vice president of Global and Commercial Marketing, Orthopaedics, told the press last June. “OXINIUM has helped over 2 million patients get back on their feet and we look forward to seeing millions more live their life unlimited in the future.”
Millions more could actually free themselves from orthopedic-related limitations with Smith+Nephew’s $240 million purchase of Integra LifeSciences Holdings Corporation’s Extremity Orthopaedics business. The acquisition is expected to strengthen the company’s extremities business by adding a focused sales channel, complementary shoulder replacement and upper and lower extremities portfolio, and a new product pipeline, including a next-generation shoulder replacement system. Smith+Nephew closed the deal in January (2021).
New product offerings from Smith+Nephew’s two other reporting segments also could help patients live without future limitations.
The Sports Medicine & ENT franchise debuted five new products in 2020, including a meniscal repair system, a suture anchor, and a connected tower platform.
First in line was the Tula System for tympanostomy tube placement. Inherited through Smith+Nephew’s January 2020 purchase of Tusker Medical Inc., the Tula system enables ENT (ear, nose, and throat) surgeons to place ear tubes in a fully conscious pediatric patient during an office visit (no anesthesia is necessary). The product was released in the United States in late May 2020, about four months after the Tusker Medical deal.
Next up was the INTELLIO Connected Tower Solution for connecting and controlling sports medicine systems. INTELLIO uses a centralized app to wirelessly connect and remotely control the major components of an arthroscopy surgical tower from outside a sterile field. The integrated solution features a remote control, on-screen display optimized for surgeon workflow, and a cloud-based image management portal.
Smith+Nephew released INTELLIO several days before European regulators approved its REGENETEN Bioinductive Implant in mid-June. The collagen-based product supports the body’s natural healing process by inducing new tendon-like tissue growth that biologically augments the existing tendon and disrupts the progression of disease.
The postage stamp-sized implant is delivered arthroscopically through a small incision and is completely resorbed within six months. More than 40,000 REGENETEN procedures have been completed since its U.S. introduction in 2014. “The U.S. market has demonstrated over the last five years that REGENETEN is changing surgeons’ traditional approach to rotator cuff repair,” Terry Byca, senior marketing director for EMEA, said upon the product’s CE mark approval. “Biological healing is imperative and our Advanced Healing shoulder repair products together with REGENETEN take us into a new era for joint repair.”
That new era involves the NOVOSTITCH PRO Meniscal Repair System, which was granted the CE mark in early September 2020. The NOVOSTITCH PRO allows surgeons to place stitches arthroscopically in tight joint compartments, using a meniscus-to-meniscus circumferential compression stitch to repair tears that may have previously been unrepairable. The system includes an ergonomic and intuitive handle design and well-defined visual cues for precise stitch placement and control.
Within a week of NOVOSTITCH PRO’s CE mark certification, Smith+Nephew released its HEALICOIL KNOTLESS Suture Anchor for rotator cuff repair. The unique open architecture design of the HEALICOIL Anchor, coupled with REGENESORB Material, aims to facilitate a jump-start in bone healing and formation.
“The real advantage of the [HEALICOIL] open architecture is that the marrow elements from the bone can reach the bone-tendon interface to promote healing where it is most needed,” Ian Lo, M.D. FRCS(C), assistant professor at the University of Calgary, noted in a news release. “We have seen that the anchor leads to more robust healing of the tendon to the bone.”
While it appears to be a promising technology, the HEALICOIL Anchor didn’t have much impact on Sports Medicine Joint Repair (SMJR) or overall franchise sales last year. SMJR revenue fell 10.5 percent to $710 million, while Arthroscopic Enabling Technologies proceeds declined 12.6 percent to $517 million, and ENT sales plummeted 30 percent to $106 million, the latter hampered by lower rates of ENT infections and general caution over restarting elective procedures.
Sports Medicine & ENT franchise revenue was equally as dismal, sinking 13.2 percent to $1.33 billion. Franchise profit tumbled 37.4 percent to $306 million.
The same storyline unfolded in Smith+Nephew’s Advanced Wound Management franchise, though new product introductions were far less frequent. The only fresh face to this division was the PICO 14 Single Use Negative Pressure Wound Therapy System, which builds on the features and advantages of previous PICO sNPWT versions and has an enhanced pump that requires less user intervention. The latest system also has a 14-day pump duration.
While the Advanced Wound Management (AWM) franchise was more resilient to COVID-19’s financial repercussions than the company’s surgical divisions, its performance nevertheless was hindered by restricted access to healthcare facilities and lower elective surgery case totals. AWM franchise revenue dwindled 5.1 percent to $1.30 billion and profits decreased 14.6 percent to $316 million.
Advanced Wound Care sales contracted 7.7 percent to $647 million, while Advanced Wound Bioactives proceeds slipped 1.1 percent to $431 million, and Advanced Wound Devices revenue subsided 4.8 percent to $232 million.
$4.56 Billion
Prior Fiscal: $5.13 Billion
Percentage Change: -11.1%
No. of Employees: 17,914
Global Headquarters: London, United Kingdom
KEY EXECUTIVES:
Roberto Quarta, Board Chairman
Roland Diggelmann, CEO
Anne-Françoise Nesmes, CFO
Mark Gladwell, President, Operations and GBS
Melissa Guerdan, Chief Quality and Regulatory Affairs Officer
Vasant Padmanabhan, President, Research and Development
Catheryn O’Rourke, Chief Legal and Compliance Officer
Phil Cowdy, Chief Business Development and Corporate Affairs Officer
Peter Coenen, President, Europe, Middle East, and Africa
Myra Eskes, President, APAC Region
Brad Cannon, President, Sports Medicine & ENT
Simon Fraser, President, Advanced Wound Management
Skip Kiil, President, Orthopaedics
The worldwide pandemic had a devastating impact on public health over the last 18 months. Unrelenting in its virulence and unwavering in intensity, SARS-CoV-2 has killed nearly 4 million people worldwide, (officially) infected 183.8 million others, and left tens of thousands with debilitating long-term complications.
Its effect on the human psyche has been equally as devastating: stress, insomnia, poor appetite, substance abuse, anxiety, and depression. The latter two consequences, in fact, have become more prevalent since the virus first surfaced—federal data show that four in 10 U.S. adults have felt anxious or depressed during the pandemic, up from one in 10 adults who experienced those feelings between January and June 2019. Young adults (ages 18-24) have been most affected by the pandemic—statistics indicate that more than half (56.2 percent) have struggled with anxiety or depression in the past year, and a higher proportion (25 percent vs. 13 percent of all grownups) have turned to alcohol or drugs to cope with their radically altered lives.
One of the pandemic’s more disturbing and unspoken mental health offshoots, however, is the collective penchant for excuse-making. Over the last 18 months, COVID-19 has gradually become a catch-all justification for indulging people’s fears, failures, and flaws.
Not ready for office work? Blame COVID-19.
Can’t find staff? Still unemployed? Curse the pandemic.
Real estate unaffordable? Cars, too? SARS-CoV-2 strikes again.
And again.
And again.
“I keep hearing, ‘Due to COVID, we can’t do this’ or ‘Due to COVID, we aren’t able to do that,’” Robert Rahal, Veterans Patient Experience Officer at the VA Central California Healthcare System in Fresno, wrote in a Feb. 25 Beryl Institute blog post. “Has the pandemic brought limitations to our table? Of course! But let’s not blame it for everything. Aren’t we far enough along in this pandemic that we, as leaders, have figured out ways to overcome the challenges? Understandably, there are reasons for not being able to do certain things...As organizations, let’s stop making excuses. Stop blaming COVID.”
Rahal is not asking for the impossible. Many individuals and businesses thrived last year in spite of the pandemic: Amwell (telemedicine), 3M (personal protection equipment), Pfizer (pharmaceuticals), HelloFresh (meal delivery), Peloton (fitness), and Amazon all generated healthy profits in 2020 as lockdowns and social distancing measures accelerated society’s digital transformation.
ANALYST INSIGHTS: S&N is doing its best to try to keep up with Stryker and Zimmer in the robotics, navigation, and enabling technologies game. They are making positive moves in the ASC market. It will be interesting to watch how that translates in the next year to global market share in their core Ortho segments.
—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors
Smith+Nephew plc didn’t exactly thrive during the pandemic last year but it didn’t make excuses for its disappointing performance, either. Rather, the company continued to serve its customers and communities worldwide while working to further its mission of Life Unlimited.
No excuses.
“COVID-19 will have a lasting impact on our business and our markets,” Smith+Nephew’s 2020 Annual Report stated. “While it has presented significant challenges, it has also given us a unique opportunity to put in place new approaches to serve our customers better than ever before.”
Those new approaches (thus far) mostly involved online training and education programs. Last March, for example, Smith+Nephew launched a virtual surgeon-centric instructional program focused on surgical techniques and product safety. More than 11,000 healthcare professionals attended in the first month.
The company also set up a 24/7 helpline for U.S. patients and clinicians to educate them about advanced wound management devices and procedures, as well as general wound-related issues.
In addition, Smith+Nephew began evaluating its customer approaches last year in order to establish new, creative ways to meet clients’ needs while driving growth. The initiative aims to improve efficiency throughout the product lifecycle, enhance customer-focused digital technology use, reduce healthcare costs, and boost patient care levels.
“COVID-19 has required companies worldwide to adapt to new ways of working,” the company’s annual report noted. “In July, Smith+Nephew launched its ‘New Normal’ program, with the objective of using the experience of the early months of COVID-19 to identify, align or accelerate existing efforts to prepare us for what comes next in our marketplace.”
No excuses.
Collaboration and community support is likely to figure into the company’s future based on its most recent past. Last year, Smith+Nephew worked with InTech Industries Inc. (Birmingham, Ala.) to ramp up face shield production, and partnered with the University of Oxford and King’s College London to develop a low-cost ventilator (OxVent). The company also used its 3D printers to produce PPE for a non-profit organization in Memphis, Tenn.
No excuses.
Elective procedure cancellations/postponements proved to be a major blow to Smith+Nephew’s finances last year, but the setback failed to prevent the company from innovating or reinforcing its prospects for long-term growth. The United Kingdom-based firm released a slew of new devices in 2020, including a robotics system, a suite of connected sports medicine surgical tools, and a business and management patient management platform to help customers expand outpatient care.
“Faced with a global pandemic we could easily have made excuses. We did not,” Smith+Nephew CEO Roland Diggelmann told shareholders in the annual report. “Throughout this period we prioritized the health and safety of employees, continued to support our customers and communities, and at the same time undertook important work to strengthen the Group. This included increasing investment in R&D, launching multiple new products, and making strategic acquisitions in higher growth segments. I am proud of the approach we took and the progress we made.”
Neither its approach nor progress, however, could prevent Smith+Nephew’s finances from imploding last year. The United Kingdom-based firm reported an 11.1 percent total sales decline (to $4.56 billion), a whopping 41.6 percent drop in trading profit (to $683 million from $1.169 billion), and a 25.2 percent reduction in earnings per share (to 51.3 cents from 68.6 cents). Operating profit fell nearly 100 percent, going from $815 million in 2019 to $295 million in 2020.
The company lost revenue in all geographic regions and in each of its three reporting segments. Orthopaedics suffered the biggest loss, as the worldwide slowdown in elective procedures drove down sales 13.7 percent to $1.92 billion and cut profit 41.6 percent to $389 million.
Hip implants benefited from the REDAPT Revision and OR3O Dual Mobility Hip systems. The former launched in China last fall after its blessing by the National Medical Products Administration, while the latter debuted in November 2019. Smith+Nephew designed REDAPT to address the challenges of revision total hip arthroplasty, including bone fixation, predictable stem positioning, joint stability, and surgical efficiency. It aims to help reduce revision total hip arthroplasties by decreasing the frequency of implant movement.
The REDAPT’s unveiling in China occurred six weeks after Smith+Nephew launched the RI Hip Navigation System for THA, a product intended to maximize accuracy and reproducibility to deliver patient-specific component alignment. RI Hip Navigation helps surgeons control a patient’s pelvic tilt, leg length, and offset measurement, as well as improve cup placement. The system—which does not require a CT scan—uses express workflows and image-free technology.
Despite the new product launches, though, hip implant revenue fell 7.5 percent in 2020 to $567 million. The company’s Trauma business was more resilient, but sales still slipped 5.7 percent to $460 million; strong EVOS Plating System sales in that unit helped minimize losses.
Other Reconstruction revenue posted the second-highest deficit in Orthopaedics despite the release of a next-generation handheld robotics system and digital surgery platform last summer. Designed for both total and unicompartmental knee arthroplasty, the CORI Surgical System is meant to replace Smith+Nephew’s original robotics solution, NAVIO. The CORI system is small and portable, making it ideal for ambulatory surgery centers and outpatient procedures. CORI’s camera technology is more than four times faster than its predecessor and its cutting abilities can handle twice the volume. Moreover, the system’s modular design allows the company to scale CORI to other types of orthopedic procedures.
“The CORI Surgical System is truly next-generation robotics. Its efficient handheld form factor is ideal for surgery centers, which is where the market is moving, and it just erases away bone with the new bone milling technique,” Jimmy Chow, M.D., orthopedic surgeon for Hip and Knee, Orthopedic Institute of the West, said upon the device’s release. “The smart, intuitive software helps place and size the implant as well as balance gaps based on patient-specific anatomy and disease state.”
The data analytics platform that accompanies CORI—called RI.INSIGHTS—enables clinicians to benchmark robotic surgery experiences with other users to optimize surgical planning and improve patient reported outcome measures. Previously, surgeons could not review complex robotic procedure information for individual patients or benchmark against their peers. But RI.INSIGHTS collects intra and post-op data during robotics-assisted procedures and presents the data alongside post-op patient outcomes, allowing surgeons to gain insights into robotics-assisted procedures.
“The RI.INSIGHTS platform maps the future of robotics and digital surgery,” Dinesh Nathwani, M.D., consultant orthopedic surgeon, Imperial College Healthcare, NHS Trust and The London Clinic, stated at RI.INSIGHTS’ release. “Robotics has proven accuracy, and using the wealth of individualized intra and post-op planning data that RI.INSIGHTS delivers, we can analyze surgical parameters like never before to provide the best customized robotic solutions for our patients.”
Since it was released on a limited basis last year, RI.INSIGHTS was powerless to prevent a 13 percent contraction in Other Reconstruction sales ($68 million total). Still, the decrease paled in comparison to the 21.1 percent abatement in Knee implant revenue (to $822 million).
In any other year, a new product would have boosted revenue in this category, but Smith+Nephew released its JOURNEY II Unicompartmental Knee System in North America and Europe as hospitals on both continents postponed or cancelled elective surgeries last spring. Bad timing.
The JOURNEY II system offers a patient-specific approach featuring a slimmer, more cost-effective two-tray configuration. The updated JOURNEY II knee adds a lateral-specific tibia baseplate and a greater range of femoral component and medial tibia baseplate sizes.
Besides the various sizes, the JOURNEY II’s femoral component is made with Oxinium, a zirconium alloy metal containing a ceramic zirconium oxide outer layer. Its hardness, low friction and resistance to scratches and abrasions make it more durable than cobalt-chrome alloys traditionally used in knee replacements. More than two million patients have been treated with Smith+Nephew implants made from OXINIUM technology.
“Smith+Nephew is proud to have an extensive history of innovation, highlighted by one of the flagship bearing materials in all of orthopaedics,” Randy Kilburn, senior vice president of Global and Commercial Marketing, Orthopaedics, told the press last June. “OXINIUM has helped over 2 million patients get back on their feet and we look forward to seeing millions more live their life unlimited in the future.”
Millions more could actually free themselves from orthopedic-related limitations with Smith+Nephew’s $240 million purchase of Integra LifeSciences Holdings Corporation’s Extremity Orthopaedics business. The acquisition is expected to strengthen the company’s extremities business by adding a focused sales channel, complementary shoulder replacement and upper and lower extremities portfolio, and a new product pipeline, including a next-generation shoulder replacement system. Smith+Nephew closed the deal in January (2021).
New product offerings from Smith+Nephew’s two other reporting segments also could help patients live without future limitations.
The Sports Medicine & ENT franchise debuted five new products in 2020, including a meniscal repair system, a suture anchor, and a connected tower platform.
First in line was the Tula System for tympanostomy tube placement. Inherited through Smith+Nephew’s January 2020 purchase of Tusker Medical Inc., the Tula system enables ENT (ear, nose, and throat) surgeons to place ear tubes in a fully conscious pediatric patient during an office visit (no anesthesia is necessary). The product was released in the United States in late May 2020, about four months after the Tusker Medical deal.
Next up was the INTELLIO Connected Tower Solution for connecting and controlling sports medicine systems. INTELLIO uses a centralized app to wirelessly connect and remotely control the major components of an arthroscopy surgical tower from outside a sterile field. The integrated solution features a remote control, on-screen display optimized for surgeon workflow, and a cloud-based image management portal.
Smith+Nephew released INTELLIO several days before European regulators approved its REGENETEN Bioinductive Implant in mid-June. The collagen-based product supports the body’s natural healing process by inducing new tendon-like tissue growth that biologically augments the existing tendon and disrupts the progression of disease.
The postage stamp-sized implant is delivered arthroscopically through a small incision and is completely resorbed within six months. More than 40,000 REGENETEN procedures have been completed since its U.S. introduction in 2014. “The U.S. market has demonstrated over the last five years that REGENETEN is changing surgeons’ traditional approach to rotator cuff repair,” Terry Byca, senior marketing director for EMEA, said upon the product’s CE mark approval. “Biological healing is imperative and our Advanced Healing shoulder repair products together with REGENETEN take us into a new era for joint repair.”
That new era involves the NOVOSTITCH PRO Meniscal Repair System, which was granted the CE mark in early September 2020. The NOVOSTITCH PRO allows surgeons to place stitches arthroscopically in tight joint compartments, using a meniscus-to-meniscus circumferential compression stitch to repair tears that may have previously been unrepairable. The system includes an ergonomic and intuitive handle design and well-defined visual cues for precise stitch placement and control.
Within a week of NOVOSTITCH PRO’s CE mark certification, Smith+Nephew released its HEALICOIL KNOTLESS Suture Anchor for rotator cuff repair. The unique open architecture design of the HEALICOIL Anchor, coupled with REGENESORB Material, aims to facilitate a jump-start in bone healing and formation.
“The real advantage of the [HEALICOIL] open architecture is that the marrow elements from the bone can reach the bone-tendon interface to promote healing where it is most needed,” Ian Lo, M.D. FRCS(C), assistant professor at the University of Calgary, noted in a news release. “We have seen that the anchor leads to more robust healing of the tendon to the bone.”
While it appears to be a promising technology, the HEALICOIL Anchor didn’t have much impact on Sports Medicine Joint Repair (SMJR) or overall franchise sales last year. SMJR revenue fell 10.5 percent to $710 million, while Arthroscopic Enabling Technologies proceeds declined 12.6 percent to $517 million, and ENT sales plummeted 30 percent to $106 million, the latter hampered by lower rates of ENT infections and general caution over restarting elective procedures.
Sports Medicine & ENT franchise revenue was equally as dismal, sinking 13.2 percent to $1.33 billion. Franchise profit tumbled 37.4 percent to $306 million.
The same storyline unfolded in Smith+Nephew’s Advanced Wound Management franchise, though new product introductions were far less frequent. The only fresh face to this division was the PICO 14 Single Use Negative Pressure Wound Therapy System, which builds on the features and advantages of previous PICO sNPWT versions and has an enhanced pump that requires less user intervention. The latest system also has a 14-day pump duration.
While the Advanced Wound Management (AWM) franchise was more resilient to COVID-19’s financial repercussions than the company’s surgical divisions, its performance nevertheless was hindered by restricted access to healthcare facilities and lower elective surgery case totals. AWM franchise revenue dwindled 5.1 percent to $1.30 billion and profits decreased 14.6 percent to $316 million.
Advanced Wound Care sales contracted 7.7 percent to $647 million, while Advanced Wound Bioactives proceeds slipped 1.1 percent to $431 million, and Advanced Wound Devices revenue subsided 4.8 percent to $232 million.