07.22.21
Rank: #9 (Last year: #9)
$14.35 Billion
Prior Fiscal: $14.88 billion
Percentage Change: -3.6%
No. of Employees: 43,000
Global Headquarters: Kalamazoo, Mich.
KEY EXECUTIVES:
Kevin A. Lobo, Chair and CEO
Glenn S. Boehnlein, VP, CFO
Timothy J. Scannell, President and COO
Yin C. Becker, VP, Chief Corporate Affairs Officer
Alan Douville, VP, Chief Information Officer and Chief Information Security Officer
M. Kathryn Fink, VP, Chief Human Resources Officer
Robert S. Fletcher, VP, Chief Legal Officer
Dana S. McMahon, VP, Chief Compliance Officer
Andy Pierce, Group President, MedSurg and Neurotechnology
Spencer S. Stiles, Group President, Orthopaedics and Spine
Orthopedic giant and ODT Top 10 champion Stryker proclaimed one of the largest medtech M&A announcements of 2019 on Nov. 4, announcing it would buy Dutch firm Wright Medical for $5.4 billion to fortify its position in the trauma and extremities markets. Stryker knew it would be a while before the deal was completed, revealing to investors at the time that it expected the transaction to close during the second half of 2020.
But the best laid plans of mice and orthopedic companies oft go awry. The COVID-19 pandemic stifled elective surgeries, and caused complexities in closing the deal for Wright.
Last February, the tender offer for Wright was extended to April 30. On April 27, it was postponed to June 30. On June 29, it was delayed yet another two months. On Aug. 28, it was lengthened a month, and so on and so forth until November.
To get the Federal Trade Commission’s (FTC) blessing, on Nov. 3 Stryker agreed to sell its Star total ankle replacement and Tactys finger joint implant products to fellow orthopedic giant DJO Global. As a result, the FTC approved the transaction that same day; the U.K. Competition and Markets Authority followed suit the next day.
Stryker released to the press the closing was imminent on Nov. 10, the most recent deadline for the tender offer. The following day, after over two years of negotiations and pandemic struggles, Stryker completed the deal for Wright on Nov. 11, 2020.
“This acquisition enhances our global market position in trauma and extremities, providing significant opportunities to advance innovation and reach more patients,” Stryker’s chairman and CEO Kevin A. Lobo proclaimed to the press on the day of the deal’s close. “We welcome the Wright Medical team to Stryker and look forward to growing the combined business by delivering solutions that improve patient outcomes.”
ANALYST INSIGHTS: Stryker has been built on aggressive organic and inorganic growth objectives for the past 20 years. We expect that to continue. Stryker will focus on robotics and enabling technologies to secure its market share position across its key market segments. Stryker is “all-in” on robotics and data. Expect both bolt-on M&A along with that surprise major deal from time to time.
The pandemic was not kind to the orthopedic and surgical products provider. 2020 revenue fell 3.6 percent to $14.35 billion, the first reported loss in recent history for Stryker. The second quarter was particularly damaging: reported net sales plummeted 24.3 percent from the year prior to $2.8 billion. The main driver was unit volume decrease due to postponement of elective procedures—shipments of instruments, endoscopy, neurotechnology, spine, knee, and hip products in particular. The company rebounded somewhat in Q3, growing its bottom line by 33.3 percent with $3.7 billion in proceeds.
Orthopaedics sales dropped 5.6 percent to $5 billion due to postponement of elective procedures from the COVID-19 pandemic. The unit volume decrease was the main driver for loss, due to lower knee (down 13.7 percent to $1.6 billion), hip (down 12.8 percent to $1.2 billion), and trauma and extremities product shipments. The trauma and extremities portfolio rebounded, however, rising 5.1 percent to reach $1.7 billion.
Last September, the company rolled out the T2 intramedullary nailing system for Charcot foot, fracture fixation, osteotomies, non- and mal-unions, and fusions. T2 ICF is designed to prevent nail back-out, with a medial and lateral column that promotes rigid fixation via the ability to apply up to 10 mm of compression through the nail.
“We are always looking for ways to improve fixation strategies in Charcot patients, as they tend to have poor bone quality and often end up needing limb-salvage procedures,” Vinod Panchbhavi, M.D., FACS, FAOA, FABOS, FAAOS, professor and chief of Ankle and Foot Surgery, UTMB Health, told the press. “The T2 ICF nails are lightweight and sturdy, and easy to use.”
Last September the company also released Mako Total Hip 4.0, the latest generation of CT-based 3D modeling and planning software to be used in tandem with Mako robotic-assisted surgery for hip replacement. It touts approach-specific, region-based pelvic registration and visualization of femur-to-pelvis and component relationship to detect potential impingement risk. AccuStop haptic technology and a patient-specific CT scan allows single-stage reaming and guided cup impactions to promote accurate implant placement.
Neurotechnology and Spine proceeds fell 4.7 percent due to operating expense savings action taken in response to the pandemic. Neurotechnology sales sank 1.9 percent to accrue $2 billion, and Spine sales dropped 9.5 percent with $1 billion in revenue last year.
Last August the company launched its Surpass Evolve flow diverter, a 64-wire cobalt chromium device to redirect blood flow and promote aneurysm healing. An increased braid angle boosts flow diversion and enhances contact with the vessel wall. Higher mesh density (versus traditional 48-wire flow diverters) can lead to faster aneurysm occlusion. Physicians have stated that Surpass Evolve offers effortless delivery, predictable deployment and implant opening, and excellent vessel wall apposition.
During last October’s North American Spine Society meeting, the firm made several announcements:
Responding to the pandemic, last April saw the rollout of a low-cost, limited-release emergency response bed that helped serve frontline healthcare workers. Its 30-degree head of bed angle accommodated patients in respiratory distress, including ventilated patients. It also features low height and an attached IV pole.
October saw the release of the ProCuity wireless hospital bed, claimed to be the industry’s first and only. The intelligent bed helps reduce in-hospital patient falls at all acuity levels, improves nurse workflow efficiency and safety, and helps lower hospital costs. It can connect to nurse call systems without cables or wires. Its height is set at 11.5 inches, with intuitive patient positioning, bed alarms, ergonomic side rails, and touchscreens.
In October, Stryker divested its Performance Solutions (SPS) Business to Healthcare Outcomes Performance Company (HOPCo). The business is a value-based care convener franchise with an orthopedic service line analytics subscription. In the transaction, HOPCo gained Episode Performance Manager, software for outcomes management.
“We expect the transition of SPS customers to the HOPCo platform to be virtually seamless and we see nothing but additional value for existing customers,” DeLyle Manwaring, a HOPCo vision leader, told the press. “In the coming months, customers will have the ability to integrate with our custom suite of existing IT tools and analytics in order to help them move to true population health for musculoskeletal care.”
$14.35 Billion
Prior Fiscal: $14.88 billion
Percentage Change: -3.6%
No. of Employees: 43,000
Global Headquarters: Kalamazoo, Mich.
KEY EXECUTIVES:
Kevin A. Lobo, Chair and CEO
Glenn S. Boehnlein, VP, CFO
Timothy J. Scannell, President and COO
Yin C. Becker, VP, Chief Corporate Affairs Officer
Alan Douville, VP, Chief Information Officer and Chief Information Security Officer
M. Kathryn Fink, VP, Chief Human Resources Officer
Robert S. Fletcher, VP, Chief Legal Officer
Dana S. McMahon, VP, Chief Compliance Officer
Andy Pierce, Group President, MedSurg and Neurotechnology
Spencer S. Stiles, Group President, Orthopaedics and Spine
Orthopedic giant and ODT Top 10 champion Stryker proclaimed one of the largest medtech M&A announcements of 2019 on Nov. 4, announcing it would buy Dutch firm Wright Medical for $5.4 billion to fortify its position in the trauma and extremities markets. Stryker knew it would be a while before the deal was completed, revealing to investors at the time that it expected the transaction to close during the second half of 2020.
But the best laid plans of mice and orthopedic companies oft go awry. The COVID-19 pandemic stifled elective surgeries, and caused complexities in closing the deal for Wright.
Last February, the tender offer for Wright was extended to April 30. On April 27, it was postponed to June 30. On June 29, it was delayed yet another two months. On Aug. 28, it was lengthened a month, and so on and so forth until November.
To get the Federal Trade Commission’s (FTC) blessing, on Nov. 3 Stryker agreed to sell its Star total ankle replacement and Tactys finger joint implant products to fellow orthopedic giant DJO Global. As a result, the FTC approved the transaction that same day; the U.K. Competition and Markets Authority followed suit the next day.
Stryker released to the press the closing was imminent on Nov. 10, the most recent deadline for the tender offer. The following day, after over two years of negotiations and pandemic struggles, Stryker completed the deal for Wright on Nov. 11, 2020.
“This acquisition enhances our global market position in trauma and extremities, providing significant opportunities to advance innovation and reach more patients,” Stryker’s chairman and CEO Kevin A. Lobo proclaimed to the press on the day of the deal’s close. “We welcome the Wright Medical team to Stryker and look forward to growing the combined business by delivering solutions that improve patient outcomes.”
ANALYST INSIGHTS: Stryker has been built on aggressive organic and inorganic growth objectives for the past 20 years. We expect that to continue. Stryker will focus on robotics and enabling technologies to secure its market share position across its key market segments. Stryker is “all-in” on robotics and data. Expect both bolt-on M&A along with that surprise major deal from time to time.
—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors
The pandemic was not kind to the orthopedic and surgical products provider. 2020 revenue fell 3.6 percent to $14.35 billion, the first reported loss in recent history for Stryker. The second quarter was particularly damaging: reported net sales plummeted 24.3 percent from the year prior to $2.8 billion. The main driver was unit volume decrease due to postponement of elective procedures—shipments of instruments, endoscopy, neurotechnology, spine, knee, and hip products in particular. The company rebounded somewhat in Q3, growing its bottom line by 33.3 percent with $3.7 billion in proceeds.
Orthopaedics sales dropped 5.6 percent to $5 billion due to postponement of elective procedures from the COVID-19 pandemic. The unit volume decrease was the main driver for loss, due to lower knee (down 13.7 percent to $1.6 billion), hip (down 12.8 percent to $1.2 billion), and trauma and extremities product shipments. The trauma and extremities portfolio rebounded, however, rising 5.1 percent to reach $1.7 billion.
Last September, the company rolled out the T2 intramedullary nailing system for Charcot foot, fracture fixation, osteotomies, non- and mal-unions, and fusions. T2 ICF is designed to prevent nail back-out, with a medial and lateral column that promotes rigid fixation via the ability to apply up to 10 mm of compression through the nail.
“We are always looking for ways to improve fixation strategies in Charcot patients, as they tend to have poor bone quality and often end up needing limb-salvage procedures,” Vinod Panchbhavi, M.D., FACS, FAOA, FABOS, FAAOS, professor and chief of Ankle and Foot Surgery, UTMB Health, told the press. “The T2 ICF nails are lightweight and sturdy, and easy to use.”
Last September the company also released Mako Total Hip 4.0, the latest generation of CT-based 3D modeling and planning software to be used in tandem with Mako robotic-assisted surgery for hip replacement. It touts approach-specific, region-based pelvic registration and visualization of femur-to-pelvis and component relationship to detect potential impingement risk. AccuStop haptic technology and a patient-specific CT scan allows single-stage reaming and guided cup impactions to promote accurate implant placement.
Neurotechnology and Spine proceeds fell 4.7 percent due to operating expense savings action taken in response to the pandemic. Neurotechnology sales sank 1.9 percent to accrue $2 billion, and Spine sales dropped 9.5 percent with $1 billion in revenue last year.
Last August the company launched its Surpass Evolve flow diverter, a 64-wire cobalt chromium device to redirect blood flow and promote aneurysm healing. An increased braid angle boosts flow diversion and enhances contact with the vessel wall. Higher mesh density (versus traditional 48-wire flow diverters) can lead to faster aneurysm occlusion. Physicians have stated that Surpass Evolve offers effortless delivery, predictable deployment and implant opening, and excellent vessel wall apposition.
During last October’s North American Spine Society meeting, the firm made several announcements:
- Showcased the Bone Vac autologous bone dust collector, which collects drilled bone dust to use as autograft material for ortho/spine, cranial, otology, or other procedures where bone generation is desired.
- Unveiled the Niagra lateral access system, a minimally invasive instrument set for spinal deformities. The broad instrument array is designed for all types of lateral lumbar fusion surgery.
- Surpassed 1 million Mesa pedicle screw implantations since the product’s launch in 2006.
Responding to the pandemic, last April saw the rollout of a low-cost, limited-release emergency response bed that helped serve frontline healthcare workers. Its 30-degree head of bed angle accommodated patients in respiratory distress, including ventilated patients. It also features low height and an attached IV pole.
October saw the release of the ProCuity wireless hospital bed, claimed to be the industry’s first and only. The intelligent bed helps reduce in-hospital patient falls at all acuity levels, improves nurse workflow efficiency and safety, and helps lower hospital costs. It can connect to nurse call systems without cables or wires. Its height is set at 11.5 inches, with intuitive patient positioning, bed alarms, ergonomic side rails, and touchscreens.
In October, Stryker divested its Performance Solutions (SPS) Business to Healthcare Outcomes Performance Company (HOPCo). The business is a value-based care convener franchise with an orthopedic service line analytics subscription. In the transaction, HOPCo gained Episode Performance Manager, software for outcomes management.
“We expect the transition of SPS customers to the HOPCo platform to be virtually seamless and we see nothing but additional value for existing customers,” DeLyle Manwaring, a HOPCo vision leader, told the press. “In the coming months, customers will have the ability to integrate with our custom suite of existing IT tools and analytics in order to help them move to true population health for musculoskeletal care.”