Presentation of orthopaedics medical device industry market analysis. The document gives an historical perspective of market size / competitive landscape of the above industry and focuses on business drivers underlying future evolution. At the end of the document, market size figures relative to 2007-2016 time interval are shown.
2. Objective
• Historical perspective of Medical Device Macro
Sector and Orthopaedics Medical Device
Industry in terms of Market Size and
Competitive Landscape
• Focus on Factors driving Orthopaedics Medical
Device Industry Evolution
• Presentation of Orthopaedics Medical Device
Industry Market Size Trend
2
marco.berizzi71@gmail.com
3. Agenda
• Historical perspective of Medical Device
Macro Sector and Orthopaedics Medical
Device Industry
• Business Drivers underlying Orthopaedics
Medical Device Industry Evolution
• Orthopaedics Medical Device Industry Market
Size Trend
3
marco.berizzi71@gmail.com
4. In ’10 Implant Mkt accounts for ca. 25% of Medical
Device Mkt with Orthopaedics having the Highest Share
4
marco.berizzi71@gmail.com Note: Medical devices market data does not include Dental & Aesthetics. Cardiovascular does not include general
cardiac surgery
Source: Researches by health care information providers, investment banks and other analysts
Global Medical Device Market SizeGlobal Medical Device Market Size
(2010;B$)
z
Orthopaedic
Cardiovascular
Opthalmic
Neurological
Pheripheral vascular
ElectrophysiologyElectrophysiology
Wound care
Surgical
instruments
Infection
control
Syringes
Vascular acc.Vascular acc.
Gravity adminGravity admin
Beds and
transport
tools
Surgical fixt.Surgical fixt.
OtherOther
Urology andUrology and
nephrology
Endoscopy
Patient
monitoring
Patient
monitoring
VentilationVentilation
Infusion
Hernia rep.Hernia rep.
AnestesiaAnestesia
Imaging
Energy and
radiotherapy
Radio-pharma
Contrast agent
X-ray filmX-ray film
Tradiotional in
vitro
diagnostics
(IVD)
Point of care
IVD
Molecular IVD
Non electrical
diagnostic
Other
HearingHearing
tools
Home
respir.
MedicalMedical
non
wovens
Blood
donat.
$71B
Procedural
Instruments and
Devices
Imaging and
Radiology
$57B
IVD and Non
electrical
Diagnostics
$54B
Surgical
Instruments
and Medical
Supplies
$49B
Equipment
$44B
Other
$27B
0%
100%
50%
Tot. ca.
$300B
Focus of next
slides
Focus of next
slides
5. In ’10 Orthopaedics Market is moderately Fragmented
with a Few Number of Players covering All Segments
5
marco.berizzi71@gmail.com Note: With exception of top player n° 4 focused only on “Spine and Biologics” therapeutic segment
Source: Researches by health care information providers, investment banks and other analysts
Mkt ShareMkt Share
(2010;%)
Market Share by Therapeutic SegmentMarket Share by Therapeutic Segment
(2010;B$;%)
• First 4 players represents ca. 50% of the market covering major* part of segments
• Small and medium size players are focused on specific segments
100%
Market Leader
Medium Player n°5
Top Player n°2
Top Player n°3
Top Player n°4
Medium Player n°6
Medium Player n°7
$11.9B
T3
ML
T2
M7
M6
OtherOther
$8.5B
T4
ML
M5
T2T2
S8S8
M6M6
S8S8
T3T3
M7M7
Other
$4.0B
M5
ML
T2
M6
M7M7
T3T3
Other
$3.3B
M6
ML
S8
T2
M7M7
Other
S8
$1B
M5M5T2T2MLMLM7M7OthOth
$1B
MLMLS8S8M5M5T3T3M7M7OtherOther
Hips and Knees Spine and Biologics Trauma Sport
Medicine
Extrem
-ities
Cranio
maxilllo-
facial
0%
100%
50%
Tot.
$29.6B
Other
Small Player[s] n°8Small Player[s] n°8
6. “Like-for-like” data treating M&A deals as if occurred 1st Jan 2010
Concentration of Orthopaedics Market through M&A
deals occurs in ’10-’15 time interval
6
marco.berizzi71@gmail.com Source: Researches by health care information providers, investment banks and other analysts
Mkt ShareMkt Share
(2010;%)
Market Share by Therapeutic SegmentMarket Share by Therapeutic Segment
(2010;B$;%)
• M&A deals concentrate almost 50% of the market in the hands of 2 players
• Concentration is particularly relevant in Hips/Knees and Spine/Biologics segments
100%
Top Player n°2
Top Player n°4
Medium Player n°6
$11.9B
ML α
T2
M6
OtherOther
$8.5B
T4
T2T2
S8S8
M6M6
S8S8
Other
$4.0B
T2
M6
Other
$3.3B
M6
ML α
S8
T2
T βT β
Other
S8
$1B
T2T2TβTβOthOth
$1B
S8S8OtherOther
Hips and Knees Spine and Biologics Trauma Sport
Medicine
Extre-
mities
Cranio
maxilllo-
facial
0%
100%
50%
Tot.
$29.6B
Other
Small Players n°8Small Players n°8
Market Leader α
[Market leader +
Medium Player n°5]*
Medium
Top Player β
[Top player 3 + Medium
Player n°7]*
T β
ML α
T βT β
ML α
T β
MLαMLαTβTβ
MLαMLα
Note: * See categorization shown in previous slide
Concentration
impact due to
M&A deals
7. Orthopaedics Demand is driven by Americas and
Spine / Knees / Hips / Trauma Therapeutic Segments
7
marco.berizzi71@gmail.com
Orthopaedics Medical Device Market SizeOrthopaedics Medical Device Market Size
(2010;B$;%)
Macro Business
Driver
Macro Business
Driver
Spine
Knees
Hips
Trauma
Extremite
CMF
Sports med
Biologics
Americas
Europe
Asia-pacific
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Therapeutic Segments Geo Area
$29.6B $29.6B
• Americas and in
particular US
territory have
driven and will
lead evolution of
orthopaedics
medical device
market …
• … Next chapter
articulates
business drivers
defining
orthopaedics
market with
special focus on
US territory
Main focus
of next
chapter
Main focus
of next
chapter
Source: Researches by health care information providers, life science information providers and other analysts
8. Agenda
• Historical perspective of Medical Device Macro
Sector and Orthopaedics Medical Device Industry
• Business Drivers underlying Orthopaedics
Medical Device Industry Evolution
• Orthopaedics Medical Device Industry Market
Size Trend
8
marco.berizzi71@gmail.com
9. Specific Business Drivers determine Orthopaedics
Medical Device Industry Evolution
9
marco.berizzi71@gmail.com
People Aging
Obesity
Activity and Inactivity
Product Innovation
Advertising
1
2
3
4
5
Public Health System
Constraints
6
Hospital and Health
Providers new Role
7
++++++++ --------= Positive Impact on
Market Size
= Negative Impact on
Market Size
++++++++
++++++++
++++++++
++++++++
++++++++
--------
--------
Orthopaedics Medical Device Industry Business Drivers
10. Almost 30% of US Population will be over 60
years old by ’45…
10
marco.berizzi71@gmail.com Source: United Nations – Population Division – Department of Economic and Social Affairs – August 2016
1
US Demographic Trend by Age ClusterUS Demographic Trend by Age Cluster
(2015-2045;%)
Over 60
years
20.7% 23.1% 25.2% 26.1% 26.8% 26.9% 27.4%
25% 25% 25% 24% 24% 24% 24%
60% 58% 57% 55% 54% 54% 55%
15% 17% 19% 21% 21% 22% 22%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 2020 2025 2030 2035 2040 2045
Over 65 years
20 - 64 years
0 - 19 years
100% 100% 100% 100% 100% 100% 100%
11. 12%
8%
38%
29%
29%
38%
22% 24%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1996-1998 2009-2011
Over 65 years
45 - 64 years
18 - 44 years
Under 18 years
…and People Aging will increment the Demand for
Reconstructive Procedures
11
marco.berizzi71@gmail.com Source: The Burden of Musculoskeletal Diseases in the United States – 2014 Report
1
Persons with Musculoskeletal Diseases by Age Cluster in USPersons with Musculoskeletal Diseases by Age Cluster in US
(1996-1998 and 2009-2011;%)
100% 100%
12. Obesity is a rising Phenomenon which will affect
more than 40% of US Population by ’30
12
marco.berizzi71@gmail.com
Source: 2012 Elesevier – Am J Prev Med – “Obesity and Severe Obesity Forecasts Through 2030”
2
12.7%
22.1%
28.6%
30.9%
34.5%
37.4%
39.9%
42.2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1990 2000 2008 2010 2015 2020 2025 2030
0.9%
2.6%
4.1%
4.9%
6.4%
7.9%
9.5%
11.1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1990 2000 2008 2010 2015 2020 2025 2030
Obesity incidence on US Pop.
≥
Obesity incidence on US Pop.
(1990-2030;%;BMI ≥30)
Severe Obesity incid. on US Pop.
≥ 4
Severe Obesity incid. on US Pop.
(1990-2030;%;BMI ≥ 40)
Note: Study conducted in 2009 and 2010 with data from 1990 to 2008, sampling non pregnant adults aged ≥ 18
years and using non linear regression model
13. Major Part of Hip and Knee Surgeries is put in
place for Obese and Overweight People
13
marco.berizzi71@gmail.com
2
Joint Replacement Surgeries by Weight Cluster – US exampleJoint Replacement Surgeries by Weight Cluster – US example
(2002-2004;%)
11%
5%
30%
12%
59%
83%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Hip replacement Knee replacement
Obese
Overweight
Normal
Source: 2006 Springer Verlag – International Orthopaedics – “Obesity increases the likelihood of
total joint replacement surgery among younger adults”
Note: Study conducted in 2006 on non elderly total joint replacement surgeries on 305 patients at MeritCare
Medical Center in Fargo, ND or in the outreach facilities of Bemidji and Detroit Lakes, MN
100% 100%
14. Almost 50% of US Population get less Basic
Exercises than Recommended…
14
marco.berizzi71@gmail.com
Source: Early Release of Selected Estimates Based on Data From the National Health Interview Survey, 2014
3
Persons respecting US Aerobic
Activity (AA) Guidelines (GL)
Persons respecting US Aerobic
Activity (AA) Guidelines (GL)
Persons respecting US AA GL and
Muscle-strengthening Guidelines
Persons respecting US AA GL and
Muscle-strengthening Guidelines
48% 50% 49% 49%
52% 51% 51% 51%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014
Not respect of
guide lines
Respect of
guide lines
21% 20% 20% 21%
80% 80% 80% 79%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014
Not respect of
guide lines
Respect of
guide lines
Note: Data are based on household interviews of a sample of the civilian noninstitutionalized population elder than
18. Estimates in this figure are limited to leisure-time physical activity only.
100% 100% 100% 100% 100% 100% 100% 100%
15. … while more Active Lifestyles are leading to an
Increase in Injuries
15
3
marco.berizzi71@gmail.com
“For America's baby boomers […] too much of a good thing has consequences.
Encouraged by doctors to continue to exercise three to five times a week for their
health, a legion of running, swimming and biking boomers are flouting the conventional
limits of the middle-aged body's abilities and filling the nation's operating rooms
and orthopedists' offices in the process. They need knee and hip replacements,
surgery for cartilage and ligament damage, and treatment for tendinitis, arthritis,
bursitis and stress fractures. The phenomenon even has a name in medical circles:
boomeritis.”
The New York Times
“In the U.S. about 30 million children and teens participate in some form of organized
sports and more than 3.5 million injuries each year which cause some loss of time of
participation, are experienced by the participants. Almost one-third of all injuries
incurred in childhood are sports-related injuries. By far the most common injuries
are sprains and strains”
Standford Children’s Health
“Ever since the advent of the "X Games" in the mid-1990s, Americans have embraced
so-called extreme sports such as mountain biking, skateboarding and
snowboarding. But experts are warning that the fun can quickly turn to tragedy when
amateurs try to mimic stunts they've seen on television. A new analysis finds that
extreme sports have been linked to more than 4 million injuries since 2000, and now
cause more than 40,000 head and neck injuries annually” Health Day News
16. Long-lasting Products and Less Invasive Surgery
drive Use earlier in Life
16
marco.berizzi71@gmail.com Source: *Arthritis Care Res (Hoboken) - 2014 June – “Time trends in the Characteristics of Patients Undergoing
Primary Total Knee Arthroplasty”;^NCHS Data Brief n.° 186 – February 2015 - Hospitalization for Total Hip
Replacement Among Inpatients Aged 45 and Over: United States, 2000–2010
4
Total Knee Replacement by Age
Cluster in US*
Total Knee Replacement by Age
Cluster in US*
Total Hip Replacement by Age
Cluster in US^
Total Hip Replacement by Age
Cluster in US^
2.9% 5.2%
19.5%
26.7%
67.2%
58.1%
10.4% 10.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1993-1995 2002-2005
Over 80 years
65 - 79 years
50 - 64 years
Under 50 years
12.0%
17.0%
24.0%
29.0%
34.0%
28.0%
30.0%
26.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2010
Over 75 years
65 - 74 years
55 - 64 years
45 - 54 years
100% 100% 100% 100%
17. Consumer-Focused Advertising drives Patient-Led
Demand
marco.berizzi71@gmail.com
5
“Some manufacturers of orthopedic medical
devices have launched new websites which
first ask if you are a patient, surgeon or
investor and then take the visitor to a
separate site geared for the answer
provided. A producer has launched several
websites for patients describing specific
products including mobile bearing knees
and the agility ankle”
Health care investor industry news
“An implant manufacturer has begun to air its television spot for its mobile bearing
knee and another one has run TV advertisements in selected regions / cities on the US
territory” Orthopaedic industry news
“Given changing patient
demographics and the information
revolution, the effects of Direct-to-
consumer Advertising (DTCM) likely
will continue to grow”
Orthopaedic scientific news
“Now medical device companies are
directly contacting consumers but
not necessarily through the traditional
television airways. The above
companies have patient education
websites advertised on social
media to deliver information about
their products”
Spine and Orthopaedic industry news
“A medical device company website
features patient stories about back pain and
managing chronic pain issues. The website
has a "doctor discussion guide" to
optimize appointments and a tool to
connect with back pain specialists”
Spine and Orthopaedic industry news
17
18. Public Health System Constraints affect
Orthopaedics Expenditure
18
marco.berizzi71@gmail.com
6
• Public health systems - in US and
all around the world - are
increasingly required to contain
and rationalize expenditure
• Increased pricing pressure may
be the norm in orthopaedics
implant segment going forward
Public Health
System
Impact
• New reimbursement schemes are
supposed to reward quality and
efficiency
• Health care providers are strongly
pushed to be accountable for
resource use and for efficiency
achievement
• Relevant impact on orthopaedics
implant pricing and volumes is
supposed to occur
19. Increased Grip on Sourcing by Hospitals and HC
Providers affects Orthopaedics Expenditure
19
marco.berizzi71@gmail.com
7
• Hospitals are progressively
regulating interactions of
physicians with med tech
suppliers
• Physicians
disintermediation allows
sourcing centralization
and standardization with
relevant impact on
orthopaedics implant
pricing and volumes
• Improvement of sourcing
practice in terms of new
processes, resource
quality and sound
competences inside health
care provider hospital
procurement
departments allows
significant expenditure
saving with relevant impact
on orthopaedics implant
pricing and volumes
Hospitals and Health
Care Providers Role
Physician
Affiliation
• Physician affiliation
as hospital
employees allows
sourcing
centralization and
standardization
with relevant impact
on orthopaedics
implant pricing and
volumes
20. Agenda
• Historical perspective of Medical Device Macro
Sector and Orthopaedics Medical Device Industry
• Business Drivers underlying Orthopaedics
Medical Device Industry Evolution
• Orthopaedics Medical Device Industry
Market Size Trend
20
marco.berizzi71@gmail.com
21. z
Orthopaedics Mkt in ’07-’20 is dominated by Americas
with Asia Pacific registering Highest Growth Rate
21
marco.berizzi71@gmail.com
Orthopaedics Medical Device Mkt Size Trend by Geo AreaOrthopaedics Medical Device Mkt Size Trend by Geo Area
(2007-2020;B$;%)
18.0
21.3 22.8 23.7 24.5 25.4
29.0
4.2
5.3
5.8
6.1
6.4
6.8
8.5
2.1
3.1
3.8
4.1
4.5
4.9
6.5
24.3
29.6
32.4
33.8
35.4
37.0
44.0
0
5
10
15
20
25
30
35
40
45
2007 2010 2013 2014 2015 2016 2020
Asia-pacific
Europe
Americas
Total
Source: Researches by health care information providers, life science information providers and other analysts
coupled with forecasting simulations
CAGR
07-13
CAGR
13-16
CAGR
16-20
10.1% 9.3% 7.2%
5.3% 5.4% 5.8%
4.1% 3.6% 3.4%
4.9% 4.6% 4.4%
22. z
Orthopaedics Mkt Trend in ’16-’20 period is driven by
Knees, Hips and Trauma Therapeutic Segments
22
marco.berizzi71@gmail.com
Orthopaedics Medical Device Mkt Size Trend by Therapeutic SegmentOrthopaedics Medical Device Mkt Size Trend by Therapeutic Segment
(2007-2020;B$;%)
5.8 6.7 7.1 7.3 7.6 7.8 8.8
5.7
6.7 7.1 7.5 7.9 8.4
10.44.3
5.2
5.5 5.8
6.2
6.5
8.1
3.3
4.0
4.6
4.8
5.0
5.3
6.3
1.0
1.3
1.6
1.7
1.8
1.9
2.3
0.6
0.7
0.8
0.8
0.9
0.9
1.0
2.4
3.3
3.8
3.9
4.1
4.2
4.8
1.3
1.8
1.8
1.9
1.9
2.0
2.2
24.3
29.6
32.4
33.8
35.4
37.0
44.0
0
5
10
15
20
25
30
35
40
45
2007 2010 2013 2014 2015 2016 2020
Biologics
Sports med
CMF
Extremite
Trauma
Hips
Knees
Spine
Total ex dental
CAGR
07-13
CAGR
13-16
CAGR
16-20
5.5% 3.4% 3.0%
7.9% 3.6% 3.4%
6.3% 3.8% 3.6%
9.3% 4.7% 4.5%
5.7% 4.6% 4.4%
4.0% 5.9% 5.6%
3.9% 5.7% 5.5%
3.4% 3.3% 3.0%
4.9% 4.6% 4.4%
Source: Researches by health care information providers, life science information providers and other analysts
coupled with forecasting simulations
23. DisclaimerDisclaimerDisclaimerDisclaimer
23
marco.berizzi71@gmail.com
• This document (“Document”) has been prepared by the author (“Author”) solely for
informational purposes
• The Author shall not have liability for the contents of, for any representation (expressed or
implied) contained in, or for omissions from, this Document or any other written or oral
communication
• The information contained herein is being made as of the date of this Document, unless
another time is specified, and the Author has no obligation to update such information
• Reference to other authors (“Other Authors”) publications, analysis, economic model or
formula is made solely for communication or informational purposes and it does not imply
any linkage between Other Authors and content presented within this Document in terms
of accuracy and completeness of information conveyed
• This Document does not contain any data or confidential information concerning the
business, contractual arrangements, deals, transactions or particular affairs of the
Company or his affiliates for which the Author had or currently has an employment
agreement
24. AuthorAuthorAuthorAuthor
24
marco.berizzi71@gmail.com
Marco Berizzi
Chief Financial Officer
e-mail marco.berizzi71@gmail.com
mobile +39 342 9204033
linkedin https://ch.linkedin.com/in/marco-berizzi-6957bb12
MSc in Probability and Application (spec. Probability and Finance)
UPMC - Pierre et Marie Curie University (Paris VI University), Paris
MSc and BSc in Economics
L. Bocconi University, Milan