Large Joint Replacement Market: Set For A Rebound?

Article preview from Medtech Insight - February, 2013

Beaten down by the great recession, the large joint arthroplasty market appears to be on the cusp of a turnaround, with several big players reporting encouraging Q4 and full-year 2012 results. A full recovery in this space is likely to take some time, but technology advances could help jumpstart the process, and there may be some interesting dynamics ahead in the patient-specific implant and robotic ortho device arenas.

Large Joint Replacement Market: Set For A Rebound?

Article preview from Medtech Insight - February, 2013

The hip and knee reconstruction market was especially hard-hit by the economic downturn of the past several years, as US patients, many of whom lost their jobs and/or insurance, postponed needed joint replacement surgery, and European markets, hit with bruising austerity measures, also came under pressure. The one bright spot was in emerging market countries (particularly China, India, and Brazil), which posted high single-digit or low double-digit growth in hip and knee implant sales revenues, albeit off a smaller base, as the US and European markets sputtered. Growth prospects going forward are expected to continue to be strongest in the emerging markets; however, slow but steady improvements in the global economy could help set the stage for a rebound in this market in the US and Europe beginning this year and accelerating in 2014, driven by pent-up procedural demand and favorable underlying demographics.

Indeed, there have been encouraging signs already suggesting the US joint reconstruction market may be on the mend, with Depuy Synthes/Johnson & Johnson (J&J), Stryker Corp., and Biomet Inc. (which together account for more than 50% of the hip and knee reconstructive market) all reporting growth acceleration in this space in their most recent quarterly results.

In January, Stryker reported that its US reconstructive implant business, which accounts for 45% of the company’s total sales, posted 13.9% growth in Q4 2012 and 9.2% for the full year, compared with the same periods in 2011. The company’s US knee and hip implant sales grew by 9.2% and 7.4%, respectively, in the quarter (7.5% and 5.7% on an adjusted basis) and 6.0% and 5.2%, respectively, for the full year. However, the firm noted continued pricing pressure and market softness for these products in Europe and Japan. Stryker also posted strong growth in its trauma and extremities business in the US, which grew 26% in Q4, with foot and ankle product sales increasing nearly 40%, driven in large part by the company’s mid-2011 acquisition of extremities implant company Memometal Technologies SA.

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