August 27, 2012 11:13 am by Arundhati Parmar | 0 Comments
Growing at a compounded annual rate of 5.1 percent, the global spine surgery devices market is set to be worth $14.8 billion in five years.
The market can be divided into four segments – fusion, non-fusion, vertebral compression fracture treatment products and spine biologics – according to MarketsandMarkets. An aging population with increasing demand combined with technological innovations is fueling the demand for such tools.
However, a focus on cutting costs, economic slowdown as well as uncertain reimbursement policies will hamper some of the growth.
The key players include DePuy Synthes, (part of Johnson & Johnson) Stryker, Medtronic,NuVasive and Zimmer in the U.S. The market has also seen some consolidation. In April, 2011, Johnson & Johnson acquired Synthes with the transaction closing for $19.7 billion, the largest deal ever done by J&J.
Stryker, which was the top Orthopedics and Spine company in 2011 by revenue, announced that it would buy Memometal Technologies for up to $162 million in June.
Medtronic had its own multibillion-dollar acquisition in its Spine division, when it bought Kyphon for over $4 billion. That acquisition made under former CEO William Hawkins hasn’t borne fruit even after five years.
Even aside from the Kyphon acquisition, Medtronic’s Spine division has been struggling for quite some time. However, in the company’smost recent quarter, its Core Spine businessshowed some signs of life. In the previous quarter, the company’s CEO, Omar Ishrak, had given rise to speculation about a possible divestment when he said that such poor showing in the Spine business was not sustainable over the longer term.
Meanwhile, Medtronic is also waiting to hear back from Yale researchers who are studying the company’s controversial bone morphogenic product called Infuse. The spinal fusion product has been labeled as unsafe by critics who charge that many doctors who published data on it had lucrative financial relations with the company and overstated its efficacy.
Meanwhile, companies like Trans1, which MarketsandMarkets includes as a key market player, are among those who are trying to fill the gap left in the wake of Infuse.
On the Core Spine side, which essentially consists of plates, b0lts and screws, Medtronic has been challenged by startups like NuVasive, with which it has repeatedly wrangled legally.
