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Numerous medium- and small-sized companies are making bold strategic shifts that include mergers and acquisitions and product portfolio enhancements. We’ve identified 10 orthopedic companies that bear close watching in 2022.
They include:
- Acumed | OsteoMed
- Anika Therapeutics
- ATEC
- Bioventus
- DJO
- Exactech
- Globus Medical
- Medacta
- Paragon 28
- Surgalign
Executing on Orthopedic Trends
ASCs, enabling technology and M&A are three dynamics within the orthopedic market that continue to steadily grow in importance. These trends are not reserved for orthopedics’ largest players. It’s no surprise that the strategies of the companies on our list align closely with those three vital trends.
ASCs
We expect an increase in the volume of procedures that will move to the ASC setting over the next five years. We expect that reimbursement will become more favorable, and more hospitals and independent practices will expand their operations in the outpatient setting. This trend will lead to more opportunities for companies with product portfolios and selling strategies optimized for the ASC setting.
Enabling and Digital Technology
As all of healthcare embraces digital technology, orthopedics continues to demonstrate the demand for novel technologies within capital-constrained environments. Robotic sales hit all-time highs in 2020, even as surgical volumes plummeted, according to our estimates. Likewise, pre-, intra- and post-operative software solutions are quickly gaining traction in the market. Companies solely focused on implants are expected to suffer in the long run.
M&A
Even though companies have grappled with the pandemic in recent years, their appetite for acquisitions hasn’t slowed. Companies across orthopedics are using smaller deals to grab new technologies, improve synergy at sales call points and enter new geographies. We don’t expect a major deal like the size of Stryker’s Wright Medical acquisition any time soon. But we believe tuck-in deals will continue at a brisk cadence.
Looking Deeper at 10 Orthopedic Companies’ Initiatives
Yes, the companies that made our top 10 list are closely executing on key orthopedic strategies. They also each have a different narrative.
Acumed merged with OsteoMed in late 2020 to become Acumed | OsteoMed, a major trauma player with an effective ASC strategy. The combined company is expanding its portfolio through acquisitions and internal business unit changes.
Anika Therapeutics acquired Arthrosurface and Parcus Medical in early 2020. With those integrations close to complete, the company could soon return to the acquisition market to further build scale. Additionally, Anika is leveraging its expertise with hyaluronic acid to launch new regenerative therapies.
ATEC continued taking share from larger spine players during the pandemic and is poised to re-emerge as an international player. The company’s acquisition of EOS imaging adds to ATEC’s compelling suite of information-based enabling technology.
Bioventus successfully completed an IPO and acquired Misonix to expand its addressable market by $2 billion. The company’s aggressive M&A strategy focuses on market expansion while leveraging existing commercial infrastructure.
DJO completed multiple acquisitions to develop a foot and ankle business and gain scale in Europe for its joint replacement business. DJO’s parent company, Colfax, is spinning it off as its own med device business in 2022.
Exactech continues to expand its comprehensive suite of enabling technology and is recently under the helm of new leadership. Exactech’s focus on high-growth markets like extremities and enabling technology should help offset pandemic-related joint replacement slowdowns.
Globus Medical describes entering the platonic ideal of robotics pull-through with their “virtuous cycles.” Additionally, they could be a candidate to make a significant acquisition in 2022. The company’s forays outside of spine, including trauma and joint replacement, have thus far been methodical crawl/walk/run strategies.
Medacta outperforms the market average across its segments and continues to use enabling technology and education to reduce the economic burden of healthcare. The Swiss company weathered the pandemic better than most of its peers in joint replacement and spine.
Paragon 28 completed a successful IPO and an acquisition in 2021. It’s become notable among foot and ankle companies for its size, scale and forward-looking view of enabling technology.
Surgalign is making a high-stakes bet that the future of surgery is about more than metal or plastic with its Holo platform software. However, the company’s separation from RTI Surgical was marred by problems and continues to impact its supply chain.
Reviewing Strategic Activity
The 10 companies on our list remain extremely active. Dating back to 2018, we’ve tracked a combined 88 announced strategic product launches, 28 acquisitions or divestments and 20 partnerships formed. The strategic activity and executive insight are detailed in our latest report, 10 Orthopedic Companies to Watch.
These companies secured about $3.8 billion in global orthopedic sales to make up about 7% of the overall market in 2021, according to our estimates. We expect the companies on our list to continue to outperform their industry peers and, therefore, deserve close watching.
