Mike Matson, a medtech analyst at Needham & Co., kicked off earnings season with a recent report on three sectors he thinks grew last quarter, compared to the previous quarter, based on early earnings announcements from several companies.
Matson noted that 12 of the firm's 21 covered companies preannounced fourth-quarter 2017 results, and all but one (NuVasive) beat consensus revenue estimates. Needham builds its market models with a bottom-up approach by using its estimates for companies the firm covers and consensus estimates for companies it does not cover.
Cardiovascular Growth Trends
Matson said he expects cardiovascular market growth improved to 5.5% on a constant currency basis in 4Q17 compared to 5.5% in the previous quarter. Broken down further, the analyst modeled cardiac rhythm management (CRM) market growth of 1%, drug-eluting stent (DES) market growth of 2%, peripheral vascular market growth of 5%, transcatheter aortic valve replacement (TAVR) market growth of 20%, electrophysiology market growth of 13%, and neuromodulation growth of 9%.
Growth trends for the full year followed a similar pattern, with 5.9% growth in 2017 across the cardiovascular market, according to Matson's report. That includes CRM market growth of 3%, DES market growth of 1%, peripheral vascular market growth of 5%, TAVR market growth of 25%, electrophysiology market growth of 13%, and 10% growth in the neuromodulation market.
Orthopedic Growth Trends
Overall, Matson estimates that the orthopedic market grew 2.3% in the fourth quarter compared to 1% growth in the third quarter last year. Other subsectors that likely grew in the quarter are the recon market (1% growth), the trauma market (5% growth), and the extremities market (8% growth), according to the analyst's estimates.
For the full year, Matson said the overall orthopedic market grew about 2%, with 1% growth in the recon segment, 4% growth in trauma, and 8% growth in the extremities market.
Diagnostics Growth Trends
Matson expects that the overall diagnostic market grew 5.4% during the fourth quarter (versus 4.3% the previous quarter), and he estimated that the molecular diagnostic market grew 6%.
For the full year, the analyst estimates 4.7% growth across diagnostics, with 7% molecular diagnostic market growth.