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.”
For more information
To gain access to our latest press releases: GlobalData Media Centre
Analysts available for comment. Please contact the GlobalData Press Office:
EMEA & Americas: +44 (0)207 936 6400
Asia-Pacific: +91 40 6616 6809
To gain access to our latest press releases and expert analysis on developments in your industry, please connect with us on:
About GlobalData 4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.