In 2011, ORTHOWORLD estimated 2009 annual global orthopaedic supplier market sales to be ~$2 billion. At that time, slowing growth from the 2008 orthopaedic original equipment manufacturer (OEM) sector was reflected in supplier side revenue. In 2010 and 2011, the supplier market commenced signs of a gentle increase in growth.
Today, ORTHOWORLD estimates 2011 annual global orthopaedic supplier market sales to be ~$2.2 billion. Exhibit 1 displays 2011 earnings, estimated and actual, for a range of supplier companies, plus market shares.
Exhibit 1: 2011 Estimated Orthopaedic Supplier Sales ($MM) and Market Share
Sources: Company earnings calls, SEC filings, press releases, ORTHOWORLD estimates for non-publicly-traded companies, company disclosures, etc. Supplier companies include contract manufacturers of implants/instruments, raw materials providers, etc.
For 2011, we estimated that global orthopaedic OEM revenue reached $43.1 billion, an increase of 5% over 2010, similar to 2010 vs. 2009 growth. At mid-2012, overall OEM market growth has held steady at estimated 5% growth 2Q12 vs. 2Q11, and throughout 2012, OEMs have commented upon signs of procedure volume increases:
- Biomet stating U.S. hip/knee markets stable, maybe even slightly improving (May 2012)
- Johnson & Johnson noting that orthopaedic procedures were +3% in 1Q, and 2Q experienced similar trends (August 2012)
- Exactech and Smith & Nephew seeing small signs of stabilization in U.S. market overall; Stryker and Zimmer noting U.S. recon utilization trends stable to modestly improving (August 2012)
- Medtronic estimating U.S. spine market improved over past 3 quarters; U.S. core spinal results reflecting stabilization (September 2012)
In 1Q12, publicly-traded supplier companies seemed upbeat that growth would be coming back in the latter half of the year. Greatbatch Medical touched on initiatives to expand and leverage its infrastructure to better support its orthopaedics business. Symmetry commented that customers’ planned new product launches would start to impact revenue in 2H12, and observed that lead times were at or below historical norms.