Things are still looking rosy

It’s always good to start with some good news, and pharma is no different. Based on the latest research, the global medtech industry is still on course to grow at a rate of 5.6% per year from 2017 to 2024. And this will reach a climax in 2024 with global sales at an estimated $595bn.

Top dog is… still top dog

Medtronic is a medtech behemoth and its dominance shows no signs of abating. The data estimates that by 2024 it will still be the biggest company by medical-device revenues – sales will reach close to $39bn. Truth be told, the line-up of the medtech heavy hitters looks somewhat recognisable, with the four largest enterprises crowned back in 2017 on course to stay put in the 2024 rankings. It is worth noting that this list comprises Abbott, which sits in third spot as a result of its acquisition of St. Jude Medical.

And the theme of acquisitions and, in particular, mergers can be held accountable for a vast amount of the recent changes in the medtech realm. Becton Dickinson’s buyout of C.R. Bard will likely enter it into the top five by 2024, its annual growth rate forecasted at 8.3%. Essilor, maker of lenses, similar to Becton Dickinson will leap three places with estimated sales for 2024 set at around $11.6bn. And when you bring them all together, the top 10 medtechs will take up 37% of the market by 2024, which will actually be slightly down on the 39% they enjoyed in 2017.

You must give to receive

The medtech industry is underpinned by research and development (R&D), so it is no surprise that market frontrunner, Medtronic is top of the spending tables. The company’s R&D outgoings are estimated to be around $2.7bn in 2024, which is a growth rate of around 2.8% CAGR from 2017 to 2024.
However, Edwards Lifesciences, a heart-valve expert, and French diagnostics firm bioMerieux, are the biggest spenders when you look at percentage of company sales spent on R&D. Each of these companies spends considerably more of their revenues on research in comparison to the other companies in the Top 20, with an R&D investment rate that will reach almost 16% in 2024.

Pedal to the metal

Every medtech CEO will be praying that the money they invest in R&D will lead to approvals. The FDA has said on numerous occasions that it is prioritising accelerating medical-device time to market. Finally, this now seems to be showing results. The amount of new products given first-time pre-market approval increased in 2017 to 51, a significant increase on 40 in 2016. This matches the record set in 2015. And the good news keeps coming: 2,675 products gained supplementary PMAs while there were 3,248 510(k) clearances.

A new player in the game

While it is no surprise that, with sales at a huge $79.6bn in-vitro diagnostics is set to be the largest medtech segment in 2024, there is one emerging anomaly. When analysing the Top 10 active companies in this domain, Exact Sciences catches the eye: a new entrant that has shot up 14 places. This is a group that cannot compete with many of its competitors when it comes to size, yet is forecast to reach sales of $1.8bn by 2024 – this is an astronomical 31.2% predicted yearly growth rate from 2017.

Let the number do the talking

Here is a snapshot of some other key data for the medtech market:

  • Neurology set to be the fastest-growing device area with a CAGR of 9.1% between 2017 and 2024
  • Diagnostic imaging and orthopaedics will be the slowest, with annual growth of a meagre 3.7% throughout this period
  • Diagnostic imaging sales forecast to surge to $51bn in 2024; Siemens Healthineers, General Electric and Philips maintain their market dominance
  • Medtronic will keep its place as the top company in cardiology in 2024 with sales of $14.2bn, a solid 20% market share

All in all, the medtech market looks set for a sunny future, though the emergence of new industry players highlights that even the most established and domineering medtech companies are still susceptible to industry disruptors. Interesting times lie ahead.

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