Finally, a light at the end of the tunnel. 

And it’s V-shaped.

Not a U, not a W, not an L, but a V. A simple V.

Though it may mean nothing to the average patient, that letter represents a watershed moment of sorts in the medtech industry’s brutal recovery from COVID-19. Vexed by months of financial uncertainty and at least one quarter of gargantuan earnings losses, medical device manufacturers are increasingly becoming cautiously optimistic of a return to growth by (calendar) year’s end.

“You’ve heard every type of letter imaginable for prognosticators on what this recovery curve would look like,” Stryker Corp. Chairman/CEO Kevin Lobo said Sept. 15 during Morgan Stanley’s 18th Annual Virtual Global Healthcare Conference. “I think if you look at this curve, it’s pretty clear that it’s a V, a very strong V-shaped recovery...we’re really pleased to see that progression consecutively following the month of April, May, June, [and] July, and August is also an improvement over July. Obviously, the pace of that V will start to moderate as the recovery accentuates, but a really terrific recovery curve and frankly, much faster than we were expecting ourselves a couple of months ago.”

Indeed, the road to recovery seemed a long way off just a few short months ago as the novel coronavirus temporarily suspended elective medical procedures. The hemorrhaging at Stryker and other medical device OEMs was quite severe too, with double-digit losses in every major product category and earnings metric.

Stryker’s second-quarter gross profit, for example, fell 35 percent while its net sales sank 24.3 percent and its EPS plummeted a staggering 117 percent. The company posted deficits in all three of its product reporting segments as well: Orthopaedics, MedSurg, and Neurotechnology & Spine revenue declined 29.9 percent, 17.3 percent, and 29.6 percent respectively.

Despite the abominable results, however, Stryker’s sales improved incrementally during the quarter ended June 30 as elective surgeries gradually resumed. Robust demand for both capital equipment and the company’s Mako Robotic technology also kept the company from tumbling deeper into the pandemic-induced financial abyss. The company’s capital equipment orders, in fact, are stable through the start of 2021, Lobo noted.

“...in the financial meltdown, we saw the [capital] order book completely fall off. The fact that the order book is healthy gives us confidence that this recovery will be sustained, at least through the end of the year,” Lobo told Morgan Stanley Managing Director David Lewis. “Obviously, as the year unfolds, we’ll have greater visibility into 2021. But certainly through the end of this year, we feel very good about [it]. The stimulus funding has been a big source of strength for the hospitals, which have enabled them to continue to acquire capital at a good rate.”

“If things continue as they are, we’re expecting to have a pretty good 2021. But that’s a big improviser, right? This pandemic is new. And let’s see what happens in the future. But we’re feeling pretty good about 2021.”

So are some of Lobo’s rivals. Boston Scientific Corp. Chairman/CEO Michael F. Mahoney and new Medtronic CEO Geoffrey S. Martha also are feeling confident about their companies’ growth prospects in the coming months.

Martha is particularly encouraged by the unexpected improvement in earnings over the summer. During a FY20 fourth-quarter conference call in May, Medtronic executives predicted “modestly worse” losses in FY21’s first quarter (the three months ending July 31). But to Martha’s surprise, the bloodletting slowed considerably, with deficits shrinking in total sales and most major product lines (the losses in both Cardiac and Vascular, and Restorative Therapies contracted by more than half).

Like his adversary, Martha attributes the improved sales figures partly to the resumption of elective procedures. But he also credits the unforeseen upturn to Medtronic’s “healthy product pipeline,” substantial R&D investments, recent product launches, and a focus on developing digital technologies.

“We are continuing to take share in a number of our businesses and overall. We’re continuing to perform much better relative to our competition than we have in the past few years. [And that’s] driven by a healthy pipeline—it really is the best it’s been,” Martha said during the Morgan Stanley conference. “September continues to improve over August, so we continue to see a faster recovery. I would be surprised if we saw a big pullback in elective procedures like we did in the March-April timeframe. I think we’ll see this continued march back to the ‘old normal.’ That’s what’s reflected in our thinking. As [we] said in our earnings call, in our fiscal fourth quarter, we’ll get back to normal profitability levels. But it could come sooner if this continues.”

That’s a big “if,” though. Coronavirus storm clouds are back on the horizon, and the tempest they’re concocting could potentially endanger the medtech industry’s long-term fiscal health. The “apocalyptic fall” American doctors have been forewarning for weeks now appears to be underway, as rising U.S. caseloads, contradictory transmission messaging, and newly reopened schools pave the way for another economically crippling round of lockdowns, business closings, and elective procedure suspensions.

“...the [fiscal] environment is still heavily dependent upon what happens in the fourth quarter with COVID-19,” Mahoney noted.  “If things stay more in check—stay the way they are today—then the odds improve. But if there are more flareups in a significant way, that would be a headwind, and that would make for a tighter industry.”

Stay tuned. It’s still anyone’s game at this point.