Smith & Nephew strengthens presence in global orthopedic market with acquisition of Integra’s Extremity Orthopaedics business, says GlobalData

Following the announcement that Smith & Nephew has acquired the Extremity Orthopaedics business of Integra LifeSciences for $240m;

Kamilla Kan, Medical Devices Analyst at GlobalData, a leading data and analytics company, offers her view on this deal:

“According to GlobalData, over 71% of Integra LifeSciences’ net sales are across business segments from North America. By acquiring Integra’s orthopedics assets, Smith & Nephew will strengthen its presence in the orthopedic market – particularly in the US, which previously accounted for around 50% of its total revenue.

“However, global orthopedic procedures are set to decline by over 20% over the course of 2020 due to the COVID-19 pandemic. Moreover, in the US alone, the hip and knee reconstruction market has decreased by approximately 70% in Q2 2020, as most of the elective surgical procedures were either canceled or delayed.

“As a result, Integra LifeSciences and many other companies in the orthopedic business are experiencing a sharp decline in revenue. Integra LifeSciences derived over 90% of revenue in orthopedic markets in the US and Europe – two regions that are currently COVID-19 hotspots.

“Although acquiring a business that has been badly impacted by the pandemic could be considered a risky move, with hospitals in North America slowly increasing the purchasing of medical device equipment and gradually resuming the elective procedures, Smith & Nephew’s US sales should see an upward movement in the future – providing a positive impact on the company’s revenue by the end of 2020.

“Furthermore, the geographic broadening of its business will also provide some resilience against the effects of the COVID-19 pandemic, since countries in the Asia-Pacific region are successfully controlling the spread of the disease, which provides a chance for companies to improve their sales even further.”

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Chris J. Stewart

Chris currently serves as President and CEO of Surgio Health. Chris has close to 20 years of healthcare management experience, with an infinity to improve healthcare delivery through the development and implementation of innovative solutions that result in improved efficiencies, reduction of unnecessary financial & clinical variation, and help achieve better patient outcomes. Previously, Chris was assistant vice president and business unit leader for HPG/HCA. He has presented at numerous healthcare forums on topics that include disruptive innovation, physician engagement, shifting reimbursement models, cost per clinical episode and the future of supply chain delivery.

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