It may be difficult to recall because of all the market turmoil that has taken place since the beginning of this year, but the world’s leading publicly held medtech manufacturers appear to have had a reasonably good year in 2007.
In 2007, the medtech industry’s top 25 companies reported year-over-year revenue increases of 9.7%, with 15 of the firms posting double-digit gains. Overall, the group generated $173.5 billion in sales, compared with $158.1 billion in 2006 (see Table).
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Table (click to enlarge)
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Johnson & Johnson Inc. (New Brunswick, NJ) and GE Healthcare (Chalfont St. Giles, UK), a division of the General Electric Co., held on to the top two spots again this year. Meanwhile, Siemens Medical Solutions, a division of Siemens AG (Munich), with a 24% increase in revenues, took over the number three position from Medtronic Inc. (Minneapolis). Much of Siemens’ gains during the period can be attributed to the company’s major acquisitions in the diagnostics arena. The company reported the greatest sales increase of any company on the top-25 list.
Medtech's orthopedics sector continued its strong performance, as all four firms on the list reported significant sales increases. Smith & Nephew plc (London) led the group with a 21.2% gain, followed by Stryker Corp. (Kalamazoo, MI) with 16.6%, Synthes Inc. (Solothurn, Switzerland) with 15.4%, and Zimmer Holdings Inc. (Warsaw, IN) reporting an upward tick of 11.6%.
The only top-25 medtech firm to report a downturn in revenues during 2007 was 3M Healthcare, a division of the 3M Co. (St. Paul, MN). In noting its 1.1% decline for the year, the company cited strong sector growth in the fourth quarter. Sales at Philips Medical Systems, a division of Royal Philips Electronics NV (Amsterdam) were essentially flat for the year, a fact that the company attributed to the softening hospital market for imaging systems.
Revenues for Carestream Health Inc., a division of Onex Corp. (Toronto), also showed no growth, but some caution should be exercised in interpreting the estimated financial data. Onex acquired the troubled imaging business unit from the Eastman Kodak Co. (Rochester, NY) in the first quarter of 2007.
In terms of geographical distribution, 16 of the top-25 medtech companies are U.S. firms. Six are based in Europe, two in Japan, and one in Canada. Maintaining their long-held strength in the medtech sector, American firms accounted for 72% of the group’s revenues for 2007.
While the medtech industry is host to many large companies like the firms on this top-25 list, there are an estimated 20,000 firms worldwide. The fact that these 25 companies alone generated $173.5 billion in product revenues for 2007 brings into serious question the often-cited figure of a global medtech industry with a market valuation of just $230 billion. Based on company reports and projections from a variety of sources, MX has previously estimated that the global market for medical devices and diagnostic products will reach approximately $336 billion in 2008.
Compiled by MX magazine from recent company financial reports, this yearly review is exclusively limited to companies' medical product sales—excluding healthcare services and product sales in other categories. For example, Cardinal Health Inc. (Dublin, OH), a leading player in the delivery of clinical technology services and the healthcare supply chain, posted 2007 calendar year revenues of $89.5 billion. But the company estimates that only $5 billion, or 5.6% of its total, is directly attributed to sales of its own manufactured medical products.
© 2008 Canon Communications LLC
