Global Medikal Teknolojinin 2012 Performans analizi (E&Y) – İng
2012 Performance Analysis of the Global Medical Technology Industry: Ernst & Young (“E&Y”) Report
November 28, 2012
Definition of the Global Medical Technology Industry
In this report, medical technology (medtech) companies are defined as companies that primarily design and manufacture medical
technology equipment and supplies and are headquartered within the United States or Europe. For the purposes of this report, we have placed Israel’s data and analysis within the European market, and any grouping of the US and Europe has been referred to as “global.”
This wide ranging definition includes medical device, diagnostic, drug delivery and analytical/life science tool companies, but excludes distributors and service providers such as contract research organizations or contract manufacturing organizations.
By any measure, medical technology is an extraordinarily diverse industry. While developing a consistent and meaningful classification system is important, it is anything but straightforward. Existing taxonomies sometimes segregate companies into scores of thinly populated categories, making it difficult to identify and analyze industry trends.
Furthermore, they tend to combine categories based on products (such as imaging or tools) with those based on diseases targeted by those products (such as cardiovascular or oncology), which makes it harder to analyze trends consistently across either dimension. To address some of these challenges, we have categorized medtech companies across both dimensions —products and diseases targeted.
All publicly traded medtech companies were classified as belonging to one of five broad product groups:
• Imaging:
companies developing products used to diagnose or monitor conditions via imaging technologies, including products such as MRI machines, computed tomography (CT) and X-ray imaging and optical biopsy systems
• Non-imaging diagnostics:
companies developing products used to diagnose or monitor conditions via non-imaging technologies, which can include patient monitoring and in vitro testing equipment
• Research and other equipment:
companies developing equipment used for research or other purposes, including analytical and life science tools, specialized laboratory equipment and furniture
• Therapeutic devices:
companies developing products used to treat patients, including therapeutic medical devices, tools or drug delivery/infusion technologies
• Other:
companies developing products that do not fi t in any of the above categories were classifi ed in this segment
In addition to product groups, this report tracks conglomerate companies that derive a significant part of their revenues from medical technologies. While a conglomerate medtech division’s technology could technically fall into one of the product groups listed above (e.g., General Electric into “imaging” and Allergan into “therapeutic devices”), all conglomerate data is kept separate from that of the nonconglomerates.
This is due to the fact that, while conglomerates report revenues for their medtech divisions, they typically do not report other financial results for their medtech divisions, such as research and development or net income.
Conglomerate companies:
United States
• 3M Health Care
• Abbott: Medical Products
• Agilent Technologies: Life Sciences and Chemical Analysis
• Allergan: Medical Devices
• Baxter International: Medical Products
• Corning: Life Sciences
• Danaher: Life Sciences & Diagnostics
• Endo Health Solutions: AMS and HealthTronics
• GE Healthcare
• Hospira: Devices
• IDEX: Health & Science Technologies
• Johnson & Johnson: Medical Devices & Diagnostics
• Kimberly-Clark: Health Care
• Pall: Life Sciences
Europe
• Agfa HealthCare
• Bayer HealthCare: Medical Care
• Beiersdorf: Hansaplast
• Dräger: Medical
• Eckert & Ziegler: Medizintechnik
• Fresenius Kabi
• Halma: Health and Analysis
• Jenoptik: Medical
• Novartis: Alcon
• Philips Healthcare
• Quantel Medical
• Roche Diagnostics
• Sanofi : Genzyme Biosurgery
• SCA Svenska Cellulosa Aktiebolaget: Personal Care
• Sempermed
• Siemens Healthcare
• Smiths Medical
The big picture
Despite lingering financial and regulatory uncertainties, US and European publicly held medtech companies delivered another strong performance in 2011. For both conglomerates and pure-play companies, revenue growth in 2011 outpaced 2010 growth rates. Net income increased by 14% — the third consecutive year of double digit growth, and certainly impressive in today’s challenging economic climate.
So far, the medical technology industry appears to be weathering a period of slower global economic growth. However, for an industry that was accustomed to double-digit revenue growth, considerable margins and a predictable sales-and regulatory environment, the long-term future may still be turbulent. The industry’s financial performance will likely continue to be challenged by low economic growth in developed markets, the prospect of austerity measures in many countries, a looming Eurozone debt crisis and an imminent 2.3% medical device tax in the US. And while the US Supreme Court’s upholding of the Affordable Care Act has removed some of the uncertainty in the US, the regulatory environment continues to grow ever more complex around the globe.
As payers tackle runaway health care costs, medtech will face rising pricing pressures and expanded use of comparative effectiveness — making organic growth in western markets more challenging. Efforts to heighten disease management and preventive care, and other efforts to drive efficiency within the health care system, may impact both product utilization and profitability. The cost of not adapting the traditional medtech business model to stay ahead of these trends could be disastrous.
Public company data 2011 2010 % change
Revenues $331.7 $313.9 6%
Conglomerates $142.3 $132.8 7%
Pure-play companies $189.4 $181.0 5%
R&D expense $12.6 $12.1 4%
SG&A expense $60.3 $57.4 5%
Net income $19.9 $17.4 14%
Cash and cash equivalents and short-term investments $39.2 $39.4 -1%
Market capitalization $436.1 $465.9 -6%
Number of employees 725,900 702,200 3%
Number of public companies 411 423 -3%
Source: Ernst & Young and company financial statement data.
Numbers may appear to be inconsistent due to rounding.
Data shown for US and European public companies.
Market capitalization data is shown for 30 June 2011 and 30 June 2012.
Medical technology at a glance, 2010–2011
(US$b, data for pure-play companies except where indicated)
Medtech companies — long known for innovation, reinvention and risk-taking in product development — will need to apply the same principles to business model development. These trends and implications are discussed more fully in this year’s point of view article.
US and European publicly held medtech companies delivered another strong performance in 2011
Since we first published Pulse of the industry back in 2008 (using 2007 figures), a number of medtech firms have seen their revenues grow significantly. It is notable that 6 of the 10 fastest-growing companies over the period 2007–11 — led by spinal device company NuVasive and Intuitive Surgical (maker of the da Vinci Surgical System) — expanded their top lines mostly through organic growth and without the assistance of sizeable mergers or acquisitions. Corning Life Sciences was the only conglomerate to make the top 10 list.
Selected fast-growing US medtechs by revenue growth, 2007–2011
(US$m)
Companies 2007 2011 CAGR
NuVasive $154 $541 37%
Alere $767 $2,387 33%
Life Technologies $1,282 $3,776 31%
Intuitive Surgical $601 $1,757 31%
Illumina $367 $1,056 30%
Hologic $738 $1,789 25%
Corning Life Sciences $305 $595 18%
Thoratec $235 $423 16%
Greatbatch $319 $569 16%
ResMed $716 $1,243 15%
Source: Ernst & Young and company financial statement data.
Companies in italics have made significant acquisitions between 2007 and 2011.
CAGR= Compounded Annual Growth Rate. 6 of the 10 fastest-growing companies expanded their top lines mostly through organic growth
Selected fast-growing European medtechs by revenue growth, 2007–2011
(US$m)
Source: Ernst & Young and company financial statement data.
Companies in italics have made significant acquisitions between 2007 and 2011.
CAGR= Compounded Annual Growth Rate.
Companies Location 2007 2011 CAGR
Fresenius Kabi Germany $2,782 $5,515 19%
Sonova Holding Switzerland $926 $1,827 19%
ELEKTA Sweden $674 $1,217 16%
Qiagen Netherlands $650 $1,170 16%
Stratec Biomedical Systems Germany $94 $165 15%
Sempermed Austria $300 $517 15%
Syneron Medical Israel $141 $228 13%
Given Imaging Israel $113 $178 12%
William Demant Holding Denmark $1,010 $1,501 10%
Essilor International France $3,986 $5,829 10%
While the fastest-growing companies in the US were fueled largely by organic growth, the four fastest-growing firms in Europe were aided by significant acquisitions. Germany’s Fresenius Kabi holds the distinction of having the biggest expansion in both real dollar and percentage terms on this list.
The company’s growth was in large part fueled by the addition of APP Pharmaceuticals, which it acquired for US$3.7 billion in 2008. Of the six commercial leaders on this list, five had made sizeable purchases, while the smaller “other” companies grew mostly through organic means.
Future Growth
Fueling future growth Mergers & acquisitions
The big picture
Merger and acquisition (M&A) activity among US and European medical technology companies remained vibrant in the year ended June 30, 2012. While 2011–12’s total of US$35.0 billion was well below the levels seen over the last two years, those two years were driven by megadeals done by Novartis (which paid US$41.2 billion to Nestlé for the remaining 75% of Alcon it didn’t already control) and Johnson & Johnson (which paid US$19.7 billion for Synthes). On a normalized basis (after removing the impact of the aforementioned megadeals), 2011–12’s total deal value was more in line with previous years — 25% below the prior year and 16% above the year before that.
Although no megadeals were consummated in 2011–12, there were eight transactions valued at more than US$1 billion, versus 12 the year before. The year’s largest deal was between private equity firm Apax Partners, two Canadian pension funds and Texas-based wound care company Kinetic Concepts Inc. (KCI). The US$6.3 billion Apax/KCI deal was particularly notable, as the US$6.3 billion represented one of the largest leveraged buyouts — across all industries — since the onset of the financial crisis in 2008. Two other private equity firms were also involved in multibillion-dollar M&As: Cinven sold off Swedish diagnostics company Phadia to Thermo Fisher Scientific for US$3.5 billion, and TPG Capital acquired in vitro diagnostics maker Immucor for nearly US$2 billion.