Report: Medical Device Market Expected to Grow Over Next Seven Years
An article from October 2022 states that the global medical device market is projected to jump by seven billion dollars in 2022 and leap to $223 billion over the next seven years, to reach a valuation of around $719 billion by 2029. A report by consulting firm Fortune Business Insights anticipates a 5.5% compound annual growth rate (CAGR) over this period.
The report identifies several factors contributing to the industry’s growth. These factors include a global rise in prevalence of chronic diseases, increased healthcare spending in developed and emerging countries, and a new emphasis on early detection and treatment by healthcare agencies. This is reported to be resulting in more and more patients undergoing diagnostic and surgical procedures.
According to AdvaMed, the U.S. occupies about 40% of the global medical device market. In segmenting the U.S. market share, Fortune Business Insights found that in-vitro diagnostics (IVD), cardiovascular devices and orthopedic devices are the largest segments. The report expects the IVD segment will grow at a higher CAGR due to the increased use of real-time diagnostics tests for the diagnosis of diabetes, cancer, and HIV/AIDS. The report also notes an uptick in the market for portable and wearable devices for treatment of chronic conditions due to a shift in preference among the elderly for home healthcare services following the COVID-19 pandemic.
The report also states the European market is anticipated to grow at an increased CAGR, due to the region’s increased spending on healthcare, well-established infrastructure, and increased adoption of advanced diagnostic devices. As with the U.S., Europe is reported to have seen a shift in focus to at-home medical care that suggests portable equipment will play a large role in their anticipated market growth.
Increased prevalence of cardiovascular disorders, diabetes, infectious disorders and dental diseases are all demand factors contributing to the forecasted growth in Asia Pacific, according to the report, causing more global medical device players to expand their presence in the region.
The three top-earning medical device companies globally in 2021 – Medtronic, Abbott, and Johnson & Johnson – are among those companies set to benefit highly from the industry’s predicted growth. However, the increasing demand for the medical device market as a whole guarantees that the future is looking bright for many companies in the space.
The report by Fortune Business Insights is available here.
IP Litigation Remains Active in the Orthopedic and Spine Industries
The orthopedic industry traditionally sees significant levels of intellectual property litigation activity, and this year has been no different. One source of this activity comes from Conformis who has continued to assert patents directed towards surgical planning and patient specific instruments and implants. In 2021, Conformis filed three new complaints, settled one case, and continued another litigation. These cases have involved various companies, including DePuy Synthes, Exactech, Bodycad, Wright Medical, and Medacta.
Decisions and settlements have also been reached in several additional lawsuits relating to diverse technologies, such as bone plates, knee implants, and pedicle screws. TriMed, Arthrex, Medacta, and Zimmer are some of the companies that have been parties to these lawsuits. Alternative forums, including the use of Inter Partes Review, have also continued to play significant roles for both patent holders and challengers.
Several attorneys from Knobbe Martens – including Andrew Douglas, Jessica Achtsam, Michael Christensen, Kregg Koch, Christy Lea and Sabing Lee – presented a webinar on August 26, 2021, to discuss notable decisions from recent orthopedic and spine intellectual property litigations. The webinar was prepared in anticipation of the 2021 Annual Meeting of the American Academy of Orthopaedic Surgeons and the 36th Annual Meeting of the National Association of Spine Specialists and included topics such as:
- an analysis of claim types asserted by Conformis against patient specific implant and instrument technologies and how these claims have been enforced against and challenged by many prominent orthopedic companies;
- how statements made by a patent holder can limit the scope of their claims in litigation;
- how small companies can leverage their patents to derive licensing revenue;
- trade secret issues that can arise at industry meetings;
- how prolific doctor inventors have built and enforced large patent portfolios;
- remedies for IP disputes outside the United States; and
- strategies for using patents defensively as part of a countersuit strategy.
The full webinar is available for viewing at this web link.
DePuy Synthes Acquires Medical Enterprises Distribution LLC’s Orthopedic Assets
DePuy Synthes, a part of the Johnson & Johnson Medical Devices Companies, announced recently that it has signed a definitive agreement to acquire the assets of Medical Enterprises Distribution, LLC, which includes the automated ME1000™ Surgical Impactor tool used in hip replacement surgery. The two companies had previously formed an exclusive agreement to co-market the hip application of the ME1000™. The financial terms of the acquisition are not being disclosed. The transaction is expected to close in the second quarter of 2018.
According to Medical Enterprises, the ME1000™ delivers constant, stable energy that is designed to automate bone preparation, implant assembly and positioning in total hip arthroplasty (THA). DePuy Synthes said that the company plans to develop and broaden the surgical impactor technology for a range of orthopaedic surgery procedures.
“The acquisition of assets of Medical Enterprises Distribution is a key example of going beyond the implant to provide complete solutions to achieve better outcomes.” – Ciro Roemer, Company Group Chairman of DePuy Synthes
The hip replacement global market was $6.5 billion in 2015 and is predicted to reach $9.1 billion by 2025. The global market for all joint replacements is expected to reach $30 billion by 2025. Other companies in the joint replacement markets include Zimmer Biomet, Smith & Nephew, and Stryker.
In the recent press release, DePuy Synthes also announced an exclusive marketing agreement with JointPoint Inc. to co-market a hip navigation system for analysis of implant selection during THA. Earlier this year, DePuy Synthes announced the acquisition of Orthotaxy, a privately-held developer of software-enabled surgery for total and partial knee replacement. In discussing the Orthotaxy acquisition, Ciro Roemer, Company Group Chairman of DePuy Synthes, said “Our goal is to bring to market a robotic-assisted surgery technology that is an integral part of a comprehensive orthopedics platform, delivering value to patients, physicians and healthcare providers across the episode of care.” Other companies in the joint replacement market are likely seeking to create comprehensive orthopedic platforms as well.
Excelsius GPSTM: Globus Medical Receives 510(k) Clearance for Robotic Surgery Platform
Globus Medical announced early today that the Excelsius GPSTM surgical platform has received 510(k) clearance from the U.S. Food and Drug Administration (FDA), as reported by a press release dated August 17, 2017.
Globus Medical, which describes itself as a musculoskeletal implant manufacturer, acquired the robotics developer Excelsius Surgical and its robotic guidance device Excelsius GPSTM three years ago according to press releases. The Excelsius GPSTM platform is said to function as a robot-assisted surgery guidance system “designed to minimize radiation exposure, streamline workflow, and reproducibly assist in implant placement,” according to the press release. Globus Medical further describes the platform as being compatible for use with pre-operative CT, intra-operative CT, and fluoroscopic imaging modalities.
The FDA’s decision is stated to allow the platform for use within minimally invasive and open orthopedic and neurosurgical procedures, including screw placement applications in spine and orthopedic surgery. This announcement also follows Globus Medical’s earlier news release announcing that the Excelsius GBSTM system received CE mark approval in the European Union.
Norbert Johnson, Vice President of Robotics, Imaging, & Navigation at Globus Medical, views these results as an example of Globus Medical’s developmental capabilities:
We believe the Excelsius GPS™ System will advance patient care and provide tangible benefits for surgeons and hospitals in terms of time, accuracy and reduced radiation exposure through the application of robotic and navigation technology in spine and orthopedic surgery.
The Excelsius GPSTM received FDA 510(k) clearance after Globus Medical re-filed its 510(k) bid following an FDA decision that Globus Medical’s initial bid had not “sufficiently addressed the FDA’s questions,” according to Mass Device.
Isto Holdings Acquires Arteriocyte To Form Isto Biologics
Isto Holdings, the parent company of Isto Technologies, has acquired Massachusetts based Arteriocyte Medical Systems Inc. and the two companies will be combined under the name Isto Biologics under the current CEO of Isto Technologies, George Dunbar.
According to its website, Isto Technologies is a medical device company involved with bone and cartilage repair and regeneration. Public records indicate that there are several pending patent applications listing Isto as the applicant. According to its website, Arteriocyte focuses on improving surgical outcomes and there are several patents and applications listing Isto as the applicant covering a number of technologies, such as centrifuge systems and autologous fibrin sealants, to name a few.
Accordingly, Isto Biologics’s expanded product portfolio will now include Arteriocyte’s MAGELLLAN autologous platelet separator with Isto’s bone-growth and cell therapy products including InQu bone graft extender and substitute, Influx natural bone-grant material, and CellPoint concentrated bone marrow aspirate system.
Thompson Street Capital Partners, which acquired the commercial operations of Isto in June of this year, provided capital for the transaction. According to Anthony Chambers, Director at Thompson:
We’re excited to bring together two great organizations under the Isto umbrella and build upon their leading biologics platforms.
At this time, the terms of the acquisition deal have not been disclosed. While the combined company will be headquartered in St. Louis under CEO George Dunbar, Isto’s base of operations, they will maintain operations in Massachusetts.
Zimmer Biomet Buys LDR Holding for $1 Billion
Warsaw, Indiana-based Zimmer Biomet Holdings Inc. recently announced it will purchase LDR Holding Corp. for approximately $1.0 billion. PR Newswire notes that Zimmer Biomet will commence a tender offer to acquire all outstanding shares of LDR at a price of $37 per share, a 64% premium over LDR’s trading price prior to the announcement (however, as Bloomberg notes, LDR’s shares lost 49% in the last 12 months). The companies expect to complete the transaction in the third quarter of 2016.
According to it’s website, Zimmer Biomet designs, manufactures, and markets orthopedic reconstructive products for musculoskeletal healthcare, including knee, hip, surgical, spine, and dental franchises. LDR describes itself as a global medical device company focused on the development of innovative technology for spinal procedures.
Zimmer Biomet’s 2015 annual report notes that the spine segment is one of the company’s smallest franchises, accounting for only about 7% of total sales. Analysts predict Zimmer Biomet’s acquisition of LDR will increase the company’s share of the global spine market from about 5 to 7%, moving Zimmer Biomet from No. 6 to No. 5 in that sector. Regarding the acquisition, David Dvorak, Zimmer Biomet President and CEO, said:
This highly strategic and complementary transaction will enhance Zimmer Biomet’s innovation leadership in musculoskeletal healthcare by adding a premier spine platform to our portfolio of solutions.
We are confident that the combination of Zimmer Biomet’s Spine division and LDR will create a Spine company with the scale, talent and technology portfolio to become a leader in the $10 billion global Spine market.
The LDR acquisition comes merely one year after Zimmer completed its combination with Biomet in a cash and equity transaction valued at over $14 billion. At least some analysts believe that Zimmer Biomet’s purchase of LDR signals that the recently-combined company has wrapped up the integration and moved on to growing the company via M&A using its sizeable cash reserves.
Cuba an Untapped Market for Medical Device Exports
The United States is the world’s largest medical device exporter, according to reports accounting for $45 billion of over $140 billion in global exports in 2014. This is not surprising since it also produced the largest share of medical devices in the same year, contributing to nearly a fifth of the $340 billion global industry. Yet, the United States and other large markets are largely saturated with annual growth rates of only 3 to 5 percent.
For these reasons, Cuba displays a potential high-growth opportunity for American medical device manufacturers, according to a recent report in the Cuba Journal. According to the report, Cuba’s expenditures on healthcare in 2014 were nearly 10 percent of its GDP. Yet, Cuba’s domestic production of medical devices is limited largely to low margin goods such as surgical dressings, optical lenses, and dental supplies. Thus, Cuba is greatly dependent on medical device imports, including both low-end goods such as syringes and catheters as well as high-end goods like imaging equipment and orthopedic devices.
However, the share of imports to Cuba from the United States is dwarfed by other countries. According to the report, Europe makes up over 40 percent of Cuban imports while China and Japan combine for nearly 30% of the country’s imports, as of 2014. The United States, on the other hand, provides less than 1 percent of Cuba’s medical devices. Even Mexico exports twice the share of Cuban medical devices the United States does.
Meanwhile, similarly sized markets received far greater attention from U.S. manufacturers. For most of the period from 2005-2014, U.S. exports to regional countries with a per capita GDP comparable to Cuba’s, such as the Dominican Republic and Colombia, have been more than 200 times greater than that of Cuba, according to the report
Fortunately, medical device exports to Cuba from the United States are on the rise. In 2015, U.S. exports to Cuba jumped by more than 600 percent compared to 2014 even though exports to Cuba dropped overall by 40 percent in the same period.
Notwithstanding the above, few companies have taken advantage of the Cuban market. This may be due in part to unfamiliarity with the law as well as delays and difficulties in complying with it. However, the U.S. Office of Foreign Assets Control has relaxed some of the barriers, and an exception for medicines and medical devices to the general policy of denial for exports already exists. This, combined with a greater awareness of the trade opportunities in Cuba and the greater openness between the United States and Cuba, have made Cuba a potentially attractive destination for U.S. medical devices. But, at present, the Cuban market remains largely untapped.
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