07.01.06
$2.1 Billion ($41.3B Total)
Key Executives:
Hansjörg Wyss, Chairman and CEO
Michel Orsinger, President and COO
Ciro Romer, President, Europe and Latin America
Robert Donahue, Chief Financial Officer
No. of Employees: 7,600
World Headquarters: West Chester, PA
As a leading developer of instruments, implants and biomaterials for surgical fixation, correction and regeneration of the musculoskeletal system, Synthes has remained a leader by pushing forward with healthy sales, which jumped 16.8% in 2005. The good news doesn’t end there—net earnings also were up 35%. The company has achieved consistent 10% sales growth every year since Synthes integrated with Stratec in 1999.
In North America, sales remained nearly the same as 2004, capturing nearly two thirds of the total. Europe saw a slight decrease, whereas Asia and the rest of the world offered slight increases.
The company, which ranks among the top three companies for spinal devices and is at the forefront of the cranio-maxillofacial market, strengthened its position in 2005 by concentrating many of its efforts on the Asian market—the end result was a 17.4% growth (pro forma local currency). In particular, Japan already has exceeded market growth projections, and Synthes now has the second largest market share in the trauma market. Hoping to maintain its foothold as a leader in China, Synthes has continued to invest in sales forces and training for previously acquired Mathys (2004).
Furthermore, Europe, the Middle East and Africa contributed 24% to Synthes’ bottom line. Switzerland was a particularly lucrative area, as the US dollar held strong against the Swiss Franc and the Euro. Since the company acquired its ninth European manufacturing plant, in Raron, Switzerland, in October 2005, business should keep booming in this area. In the Middle East and Africa, Synthes signed long-term agreements with government authorities and key customers, and additionally had many distributors invest in dedicated sales consultants.
Finally, the company opened its fifth Latin American subsidiary in Peru during 2005; an exclusive distributor in El Salvador was added to the roster, marking the company’s 12th distributor in Latin America. Synthes saw double-digit increases in this region.
Much of Synthes’ overall success has been a direct result of the company’s three-pronged strategy of focusing on product innovation, sales force expansion and education/training for employees, doctors and operating room personnel. Sales consulting staff were increased by 13% in 2005.
Many of the sales efforts focused on the trauma market, as various new products were rolled out for Synthes’ Locking Compression Plate System, which now contains 28 product lines with more than 800 plates and hundreds of screw types/sizes. The company also introduced the Expert Intramedullary Nail System.
In the cervical plate market, the Vectra and Anterior Cervical Compression System were leveraged to tap into the overall $300 million market. In 2005, the company succeeded in significantly growing its sales with the Axon Screw System, Anterior Tension Band Plate and Thoracolumbar Locking Plate System.
While the cranio-maxillofacial market isn’t as large as other markets Synthes deals with, the company currently exceeds 50% of market share. The introduction of the Low Profile Neuro System bolstered sales in this market globally quite a bit.
As the company released many new products to the market, the Synthes Inventory Management System was being simultaneously installed or upgraded in more than 2,100 hospitals to enable electronic inventory management and on-line ordering.
Perhaps part of the company’s growth can be attributed to its own internal increases in personnel. Synthes grew its work force by nearly 14% in the past year.
In 2006, the company is looking to continue its double-digit growth pattern by expanding market share in all divisions. In the trauma market, the Locking Compression Plate System will introduce 12 new lines, and all three Expert Nailing Systems will roll out to all regions. Meanwhile, the spine sector will see the global launch of several products including the cervical Vectra Plate. In January 2006, the FDA also approved the ProDisc-L Total Disc Replacement for treatment of degenerative disc disease in the lumbar spine.
If the first quarter (January-March) is any indication, the company is off to a good start, with a 17% increase in sales to $576 million. Trauma, spine and cranio-maxillofacial markets each posted double-digit gains.
The company hopes to further strengthen its position by continuing its partnership with the AO Foundation, a non-profit surgeon-driven organization based in Switzerland that specializes in trauma surgery products.
Challenges will remain, however. Synthes received a subpoena from the US Department of Justice to hand over certain documents and information regarding the off-label sale, promotion and reimbursement of Norian XR bone cement. (Synthes announced it would fully cooperate with authorities, and the company has not sold this product or had any revenues related to it since 2004.)
Key Executives:
Hansjörg Wyss, Chairman and CEO
Michel Orsinger, President and COO
Ciro Romer, President, Europe and Latin America
Robert Donahue, Chief Financial Officer
No. of Employees: 7,600
World Headquarters: West Chester, PA
As a leading developer of instruments, implants and biomaterials for surgical fixation, correction and regeneration of the musculoskeletal system, Synthes has remained a leader by pushing forward with healthy sales, which jumped 16.8% in 2005. The good news doesn’t end there—net earnings also were up 35%. The company has achieved consistent 10% sales growth every year since Synthes integrated with Stratec in 1999.
In North America, sales remained nearly the same as 2004, capturing nearly two thirds of the total. Europe saw a slight decrease, whereas Asia and the rest of the world offered slight increases.
The company, which ranks among the top three companies for spinal devices and is at the forefront of the cranio-maxillofacial market, strengthened its position in 2005 by concentrating many of its efforts on the Asian market—the end result was a 17.4% growth (pro forma local currency). In particular, Japan already has exceeded market growth projections, and Synthes now has the second largest market share in the trauma market. Hoping to maintain its foothold as a leader in China, Synthes has continued to invest in sales forces and training for previously acquired Mathys (2004).
Furthermore, Europe, the Middle East and Africa contributed 24% to Synthes’ bottom line. Switzerland was a particularly lucrative area, as the US dollar held strong against the Swiss Franc and the Euro. Since the company acquired its ninth European manufacturing plant, in Raron, Switzerland, in October 2005, business should keep booming in this area. In the Middle East and Africa, Synthes signed long-term agreements with government authorities and key customers, and additionally had many distributors invest in dedicated sales consultants.
Finally, the company opened its fifth Latin American subsidiary in Peru during 2005; an exclusive distributor in El Salvador was added to the roster, marking the company’s 12th distributor in Latin America. Synthes saw double-digit increases in this region.
Much of Synthes’ overall success has been a direct result of the company’s three-pronged strategy of focusing on product innovation, sales force expansion and education/training for employees, doctors and operating room personnel. Sales consulting staff were increased by 13% in 2005.
Many of the sales efforts focused on the trauma market, as various new products were rolled out for Synthes’ Locking Compression Plate System, which now contains 28 product lines with more than 800 plates and hundreds of screw types/sizes. The company also introduced the Expert Intramedullary Nail System.
In the cervical plate market, the Vectra and Anterior Cervical Compression System were leveraged to tap into the overall $300 million market. In 2005, the company succeeded in significantly growing its sales with the Axon Screw System, Anterior Tension Band Plate and Thoracolumbar Locking Plate System.
While the cranio-maxillofacial market isn’t as large as other markets Synthes deals with, the company currently exceeds 50% of market share. The introduction of the Low Profile Neuro System bolstered sales in this market globally quite a bit.
As the company released many new products to the market, the Synthes Inventory Management System was being simultaneously installed or upgraded in more than 2,100 hospitals to enable electronic inventory management and on-line ordering.
Perhaps part of the company’s growth can be attributed to its own internal increases in personnel. Synthes grew its work force by nearly 14% in the past year.
In 2006, the company is looking to continue its double-digit growth pattern by expanding market share in all divisions. In the trauma market, the Locking Compression Plate System will introduce 12 new lines, and all three Expert Nailing Systems will roll out to all regions. Meanwhile, the spine sector will see the global launch of several products including the cervical Vectra Plate. In January 2006, the FDA also approved the ProDisc-L Total Disc Replacement for treatment of degenerative disc disease in the lumbar spine.
If the first quarter (January-March) is any indication, the company is off to a good start, with a 17% increase in sales to $576 million. Trauma, spine and cranio-maxillofacial markets each posted double-digit gains.
The company hopes to further strengthen its position by continuing its partnership with the AO Foundation, a non-profit surgeon-driven organization based in Switzerland that specializes in trauma surgery products.
Challenges will remain, however. Synthes received a subpoena from the US Department of Justice to hand over certain documents and information regarding the off-label sale, promotion and reimbursement of Norian XR bone cement. (Synthes announced it would fully cooperate with authorities, and the company has not sold this product or had any revenues related to it since 2004.)