A recent analysis by Needham, a well-known Wall Street investment agency, shows that the backlog of surgeries associated with the pandemic will drive sales of orthopedic medical devices this year.
The Zhitong Finance App learned that a recent analysis by Needham, a well-known Wall Street investment agency, shows that don't expect the backlog of surgeries related to the pandemic to drive sales of orthopedic medical devices this year. The bank said that the backlog of surgeries seems to have basically returned to zero, and sales of most orthopedic products in 2023 were only slightly higher than sales without the outbreak of the epidemic.
Needham calculated the fixed exchange rate compound annual growth rate of the four major orthopedic devices from 2013 to 2019 and applied this growth rate from 2020 to 2023 to understand the performance of these products.
The analysis shows that from 2013 to 2019, the fixed exchange rate of hip replacement product sales grew at a compound annual rate of 1.9%. If such products grow at the same rate during the pandemic, sales will reach US$6.22 billion in 2023. Needham estimates that sales of such products in 2023 will actually be $6.32 billion, 1.5% higher than the hypothetical value.
From 2013 to 2019, sales of spinal medical devices grew at a fixed annual rate of 1.6%. If such products grow at the same rate during the pandemic, sales will reach US$9.77 billion in 2023. The bank estimates that the actual sales volume of such products in 2023 was US$9.88 billion, 1.1% higher than the hypothetical value.
From 2013 to 2019, the fixed exchange rate of knee medical device sales grew at a compound annual rate of 2.7%. If such products grow at the same rate during the pandemic, sales will reach US$8.55 billion in 2023. The bank estimates that the actual sales volume of such products in 2023 was US$8.61 billion, 0.7% higher than the hypothetical value.
From 2013 to 2019, the fixed exchange rate for revenue generation and sales of limb medical devices was 6.2%. If such products grow at the same rate during the pandemic, sales will reach US$10.31 billion in 2023. The bank estimates that in 2023, sales of such products will actually be US$9.54 billion, which is 7.5% lower than the hypothetical value.
Needham pointed out that after the pandemic, implant prices have improved, which may have led to higher-than-expected sales. However, the bank added: “Even considering price improvements, we believe the orthopedic medical device market growth in 2024 may be significantly slower than in 2023.” The bank expects the orthopedic medical device market to grow by 4.8% in 2024, down from 7.3% in 2023. “Although most orthopedic medical device companies have surpassed market expectations in 2023, we think their upside in 2024 may be more limited,” the bank said.
Needham said the bank is still optimistic about Enovis (ENOV.US) and Alphatec (ATEC.US) because their stock prices are lower, and the rise in stock prices is expected to be driven more by the stock market than the actual growth of the orthopedic medical device market. Other orthopedic medical device companies covered by the bank include CONMED (CNMD.US), Globus Medical (GMED.US), Orthopediatrics (KIDS.US), Paragon 28 (FNA.US), Medtronic (MDT.US), Stryker (SYK.US), and Zimmer Biomet (ZBH.US).