HealthPoint Capital Report Highlights Opportunities in Sports Medicine

A new report that focuses on the “orthopedic opportunity in sports medicine” estimates that 10% of the 35 million to 40 million annual injury-related visits to U.S. emergency rooms are sports related. These injuries and their subsequent surgical and nonsurgical treatments represent a growing market for medical product manufacturers.

The report, 2005 Orthopedic Market Report: Sports Medicine , was produced by Healthpoint Capital (New York City), an investment banking firm with an exclusive focus on orthopedics.

Figure 1. Number of arthroscopy procedures performed in the United States, 2003 and 2005. Source: Healthpoint Capital.

In the surgical arena, arthroscopy is the procedure most widely used in treating and repairing damage caused by sports-related injuries. According to the report, the United States typically accounts for about 60% of the arthroscopic procedures performed worldwide. Healthpoint estimates that about 2 million arthroscopic procedures will be performed in the United States in 2005 on knees and shoulders alone, a 12.4% increase over the 1.78 million in 2003. Knee arthroscopy represents the largest segment with five times as many procedures compared to those on shoulders. Shoulder arthroscopy is growing at a faster pace, however, with 10% annual growth compared to 5% for all orthopedic arthroscopies, including those involving knees (see Figure 1).

In addition to knees and shoulders, arthroscopic procedures on other joints, such as elbows, wrists, and ankles, will account for about 1 million procedures in 2005, according to Healthpoint Capital.

Healthpoint projects a $1.36 billion market value in 2005 for the products used in orthopedic arthroscopy, including surgical instruments and equipment ($850 million) and implants ($510 million)—a 39% increase over 2001 market value of $0.98 billion.

According to the report, sales of products used in orthopedic arthroscopy are growing at an average annual rate of 8.6%. Visualization products (arthroscopes, video cameras, and equipment) are experiencing the greatest growth at 11%, followed by manual instruments (8%), powered instruments (6%), and fluid management (5.5%).

Figure 2. U.S. population participation in sports activities. Source: American Sports Data Inc., Healthpoint Capital.

Although obesity has garnered a great deal of attention lately as a “national epidemic,” the fact is that many Americans are active participants in a wide range of sports activities, notes the report. It estimates that more than 50 million Americans regularly engage in running, cycling, or treadmill exercise, and 40 million are involved in team sports, including basketball, softball, and tennis (see Figure 2) .

Figure 3. Market revenue for nonsurgical sports medicine treatment devices and products, 2001 and 2005. Source: “U.S. Market for Sports Medicine Devices and Products,” Medtech Insight (July 2003); Frost & Sullivan; Healthpoint Capital.

Because many sports-related injuries are minor and do not require surgery, the report also examines market opportunities in nonsurgical medical product categories, including splints, wraps, and braces used for immobilizing affected joints and limbs; and hot and cold therapy products used to reduce pain and swelling. The 2005 nonsurgical product market is estimated at $622 million, an increase of 26% over the 2001 market valuation of $492 million (see Figure 3) .

The Healthpoint report also looks at the medications and injections, nutraceuticals, and synovial-fluid replacement products used to treat sports-related injuries—a combined market of more than $6.5 billion.

According to Healthpoint, “The arthroscopy market has been gaining momentum over the last few years and is well positioned for additional growth in 2005.” Primary market drivers include the following.

• Increasing participation in sports and recreational activities.

• Easier access to facilities where arthroscopic surgery is performed.

• Increased new product launches.

The report provides profiles of the major industry players in the sports medicine sector of the orthopedics market, and includes their key products, financial performance, and a look at their product development plans.

Canon Communications LLC

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