In the past year, both Stryker and Medtronic made key spine acquisitions — Stryker acquired K2M for $1.4 billion and Medtronic acquired Mazor for $1.7 billion — to give them a boost, while DePuy Synthes reported a decrease in spine revenue for 2018.
Here are six big companies in spine, based on sales and revenue for the last four quarters reported:
1. Medtronic Spine: $2.6 billion in revenue *past four quarters
2. Stryker Spine: $2.6 billion in revenue (18 percent increase)
3. Johnson & Johnson Spine & Other: $3.2 billion in sales (7.3 percent decrease, includes sales reported beyond just spine)
4. NuVasive: $1.1 billion (7 percent increase, preliminary results)
5. Zimmer Spine: $764 million in revenue (0.8 percent increase, includes craniomaxillofacial)
6. Globus Medical: $712.5 million in revenue (12 percent increase, preliminary results)
DePuy Synthes made "positive progress" in 2018, according to Johnson & Johnson CEO Alex Gorsky, and is poised for additional growth in 2019. "In spine, we continue to focus on areas such as severe deformity, degeneration as well as others. We have a number of new launches that we have coming out including the interbody cage. Biomaterials is an area of interest to us as well," he said, during the company's fourth quarter and full year 2018 earnings report conference call.
Stryker expects to continue gaining ground in 2019 after acquiring K2M during the second half of last year.
"The key here right now is with K2M we get an immediate product refresh, we get a strong foothold in the deformity market that has a big impact with the thought leaders in this market. We have a much more expanded offering across the board and a larger sales force and we also have an expanded 3D-printed offering. And then longer term, I think this positions us well in the out-years and we bring the spine robot to market, but that's years off," said Katherine Owen, Stryker's vice president of strategy and investor relations, during the fourth quarter and full year earnings report conference call.
In the coming year, Medtronic aims to release several products including the Mazor X Stealth Edition, the technology developed in partnership with Mazor, which Medtronic acquired completely for $1.7 billion last year.
"[Mazor X is] at its formative stages. It's just starting," said Mr. Ishrak in a conversation with CNBC's Jim Cramer after his presentation at the 37th Annual J.P. Morgan Healthcare Conference in San Francisco last month. "What Medtronic can do is take a product like that and company like that and scale it at a speed that that company alone cannot reach. It's more restricted to spinal procedures, but spinal procedures are one of the biggest healthcare challenges and in planning those procedures and the implementation of those procedures and the guidance of the implants, this is an invaluable product and that's what we will drive."
NuVasive CEO J. Christopher Barry also sees growth opportunity over the next year.
"In 2018, NuVasive launched more than a dozen new technologies and initiated several strategic partnerships — all designed to support innovation and help deliver better, more predictable patient outcomes," said Mr. Barry. "The company will continue to focus on delivering disruptive technology with a focus on the core hardware portfolio and navigation, imaging and robotics, while enhancing operational excellence and strategically investing in profitable areas in 2019."
Financial Times reported Smith & Nephew may be in talks with NuVasive for a potential acquisition, which sent NuVasive's stock price soaring.