Medical Device Market & Industry Briefs, October 2012

Article preview from Medtech Insight - October, 2012 

Brief summaries of recent medtech market and industry developments. This month we cover Medtronic’s acquisition of Kanghui, Greatbatch’s new R&D center in Singapore, the outlook for the ICD/CRT market, and Cook Medical’s newly launched ENT unit.

 

 Medical Device Market & Industry Briefs, October 2012

 Article preview from Medtech Insight - October, 2012 

Since taking the CEO seat at Medtronic Inc. last year, Omar Ishrak has set the multinational on two principal paths. The first path extends Medtronic’s reach into emerging markets, a popular destination for US and European health care companies seeking to tap into those countries’ surging economies to offset stagnant growth in their home markets. The second, less prominent, path is so-called reverse innovation, a philosophy Ishrak brought over from his time as CEO of GE Healthcare, the $12 billion subsidiary of General Electric. (See "Reverse Innovation: Is The US Losing Its Edge In Innovation?" — IN VIVO, January 24 2012 12:00 AM.) Historically, the US medical device industry has been rewarded for innovation that provides better clinical outcomes. But competing in emerging markets – and ultimately in developed markets – also might require device makers to produce tools that provide good-to-adequate outcomes at lower prices.

Medtronic brought both philosophies into play last month when it agreed to pay close to $800 million for Chinese orthopedics implant maker China Kanghui Holdings. To be sure, the purchase of the Changzhou-based Kanghui secures Medtronic’s footing in China, one of the fastest growing health care economies in the world. This likely will help Medtronic close in on its goal of bringing in 20% of its revenue from emerging markets. Ishrak, in phone calls with analysts over the summer, said he isn’t satisfied with the 11% generated from emerging markets in the company’s second quarter. Katherine Lu, analyst at Cowen & Co., calls China a “springboard for emerging markets.” A report by Cowen states that total Chinese orthopedics exports grew 200% in August, moderating from 325% year-over-year in July. Sale of trauma products accounted for much of the growth, up 241% in August and 379% in July. Lu notes an agreement between Chinese and Venezuelan governments contributed to the sales.

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Medtech Insight  newsletter provides insights into the technology and market developments (devices, instrumentation, biomaterials, gene therapy, tissue engineering, etc) impacting a wide range of  surgical and non-surgical clinical practices.