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Medtech's Top-25 Firms Post Strong Revenue Gains in 2007

May 1, 2008

12 Min Read
Medtech's Top-25 Firms Post Strong Revenue Gains in 2007

BUSINESS NEWS

It may be difficult to recall because of all the market turmoil that has taken place since the beginning of this year, but the world's leading publicly held medtech manufacturers appear to have had a reasonably good year in 2007.

In 2007, the medtech industry's top-25 companies reported year-over-year revenue increases of 9.7%, with 15 of the firms posting double-digit gains. Overall, the group generated $173.5 billion in sales, compared with $158.1 billion in 2006 (see table).

Company
(parent)

2007 Revenues
($ billions)

2006 Revenues
($ billions)

Variance
%

Stock Exchange;
Symbol

Johnson & Johnson Inc.

21.346

20.283

7.2

NYSE: JNJ

General Healthcare
    (General Electric Co.)

16.997

16.560

2.6

NYSE: GE

Siemens Medical
    Solutions (Siemens
    AG)a

14.350

11.584

23.9

NYSE: SI

Medtronic Inc. b

12.936

12.107

6.9

NYSE: MDT

Baxter International Inc.

11.263

10.378

8.5

NYSE: BAX

Covidien Ltd.c

10.033

9.482

5.8

NYSE: COV

Philips Medical
    Systems (Royal
    Philips Electronics)a

8.929

8.898

0.0

NYSE: PHG

Boston Scientific Corp.

8.357

7.821

6.9

NYSE: BSX

Roche—F. Hoffmann-La
    Roche Ltd.d

7.990

7.177

11.3

VTX: ROG.VX

Becton Dickinson & Co.

6.543

5.846

11.9

NYSE: BDX

Abbott

6.300

5.200

21.2

NYSE: ABT

Stryker Corp.

6.001

5.147

16.6

NYSE: SYK

Cardinal Health Inc.

5.042

4.240

18.9

NYSE: CAH

Olympus Corp.e,f

4.191

3.786

10.7

TSE: 7733

3M Healthcare (3M Co.)

3.968

4.011

-1.1

NYSE: MMM

Zimmer Holdings Inc.

3.898

3.495

11.5

NYSE: ZMH

St. Jude Medical Inc.

3.779

3.302

14.4

NYSE: STJ

Smith & Nephew plc

3.369

2.779

21.2

NYSE: SNN

Beckman Coulter Inc.

2.761

2.529

9.2

NYSE: BEC

Synthes Inc.

2.760

2.392

15.4

VTX: SYSF.VX

Terumo Medical Corp.e,g

2.598

2.322

11.9

TSE: 4543

Fresenius Medical Care
    AG

2.506

2.122

18.1

NYSE: FMS

Alcon Inc.

2.500

2.204

13.6

NYSE: ACL

Carestream Health Inc.
    (Onex Corp.)g,h

2.497

2.497

0.0

TSX: OCX

C.R. Bard Inc.

2.202

1.980

11.2

NYSE: BCR

Totals

173.506

158.142

9.7

aFinancial data originally reported in euros; average conversion rate for 2007: € = $1.38
bRevenues for the 12-month period endnig January 25, 2008
cSpun off from Tyco Healthcare; began trading on NYSE as Covidien Ltd. on July 2, 2007.
dFinancial data originally reported in Swiss francs; average conversion rate for 2007: CHF =
    $0.845
eFinancial data originally reported in Japanese yen; average conversion rate for 2007: ¥ =
    $0.00084.
fFinancial forecast for year ending March 31, 2008; includes meidcal and life science segments.
gEstimated; some financial data unavailable.
hFormerly Kodak Health Group; renamed Carestream Health Inc. upon sale to Onex Corp. in April
    2007.

Johnson & Johnson Inc. (New Brunswick, NJ) and GE Healthcare (Chalfont St. Giles, UK), a division of the General Electric Co., held on to the top two spots again this year. Meanwhile, Siemens Medical Solutions, a division of Siemens AG (Munich), with a 24% increase in revenues, took over the number three position from Medtronic Inc. (Minneapolis). Much of Siemens' gains during the period can be attributed to the company's major acquisitions in the diagnostics arena. The company reported the greatest sales increase of any company on the top-25 list.

Medtech's orthopedics sector continued its strong performance, as all four firms on the list reported significant sales increases. Smith & Nephew plc (London) led the group with a 21.2% gain, followed by Stryker Corp. (Kalamazoo, MI) with 16.6%, Synthes Inc. (Solothurn, Switzerland) with 15.4%, and Zimmer Holdings Inc. (Warsaw, IN) reporting an upward tick of 11.6%.

The only top-25 medtech firm to report a downturn in revenues during 2007 was 3M Healthcare, a division of the 3M Co. (St. Paul, MN). In noting its 1.1% decline for the year, the company cited strong sector growth in the fourth quarter. Sales at Philips Medical Systems, a division of Royal Philips Electronics NV (Amsterdam), were essentially flat for the year, a fact that the company attributed to the softening hospital market for imaging systems.

Revenues for Carestream Health Inc., a division of Onex Corp. (Toronto), also showed no growth, but some caution should be exercised in interpreting the estimated financial data. Onex acquired the troubled imaging business unit from the Eastman Kodak Co. (Rochester, NY) in the first quarter of 2007.

In terms of geographical distribution, 16 of the top-25 medtech companies are U.S. firms. Six are based in Europe, two in Japan, and one in Canada. Maintaining their long-held strength in the medtech sector, American firms accounted for 72% of the group's revenues for 2007.

While the medtech industry is host to many large companies like the firms on this top 25 list, there are an estimated 20,000 firms worldwide. The fact that these 25 companies alone generated $173.5 billion in product revenues for 2007 brings into serious question the often-cited figure of a global medtech industry with a market valuation of just $230 billion. Based on company reports and projections from a variety of sources, MX has previously estimated that the global market for medical devices and diagnostic products will reach approximately $336 billion in 2008.

Compiled by MX magazine from recent company financial reports, this yearly review is exclusively limited to companies' medical product sales—excluding healthcare services and product sales in other related categories.

Copyright ©2008 MX

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