COVID-19 Could Hurt Orthopedic Companies in More Ways than One

April 2, 2020 COVID-19, Medical Devices, Orthopedics, Robotics

A medical device analyst warns of a significant drop in capital purchases like robotics and navigation systems as orthopedic practices grapple with major revenue loss this year.

Any medical procedure that can be deffered until after the coronavirus pandemic is over will be. That means lower procedure volumes for hospitals and medical practices, which translates into lower revenue for medical device companies. One sector of the industry that stands to be heavily impacted by this is orthopedics.

Canaccord Genuity analyst Kyle Rose surveyed orthopedic/spine surgeons to assess the impact on treatment patterns and practice viability. As expected, most of the 50 respondents (60%) said their organizations were defering or postponing all procedures, and about a third of respondents indicated that 90% of their entire practice is deferrable. On average, the survey suggests a 58% decline in patient volumes in March and an anticipated 77% average decline in April, Rose noted in his report.

As we’ve seen recently with Conformis, that kind of procedure volume can have a drastic impact on companies and the people who work for those companies. Conformis recently furloughed one-third of its workforce (about 80 employees) and withdrew its 2020 guidance. Previously the Billerica, MA-based company was expecting to see a product revenue growth this year between 3% and 6%.

Despite these near-term impacts, Rose expects to see a sharp acceleration in volumes in the back half of the year after the COVID-19 uncertainty moderates. Many of his survey respondents (41%) said they plan to “catch up” on procedure volumes within three months and another 35% within six months.

But in the meantime, many practices have had to temporarily furlough or lay off staff as they already lost a major amount of revenue, Rose said, and the analyst said that trend will become increasingly common the longer this pandemic lasts. So what does that mean for medical device companies, particularly those companies that serve the orthopedics sector?

By Amanda Pedersen | MD+DI

Image Credit: Gerd Altmann / Pixabay

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About Peter Coffaro 504 Articles

Peter Coffaro is a growth-driven and strategic executive with over 25 years of progressive management success in the medical device industry. With a proven track record and recognized expertise, Peter has established himself as one of the top influencers in medical sales, as acknowledged by prestigious publications such as the World Journal of Orthopedics, Exponential Healthtech, and MedReps.com. Throughout his career, Peter has accumulated 10 years of combined sales management experience, excelling in various roles including Director, General Manager, Distributor, and Vice President. He has worked for industry-leading orthopedic companies such as Zimmer, DePuy, and Stryker, solidifying his deep knowledge and network within the field. Peter’s passion for innovation and emerging technologies led him to found OrthoFeed, an award-winning blog covering digital orthopedic news and emerging medical technologies. Through this platform, he stays at the forefront of the industry and contributes to the dissemination of valuable insights. Peter is a three-time Hall of Fame award winner at Johnson and Johnson, demonstrating his exceptional contributions and impact on the organization. His expertise extends to areas such as organizational development, business development, sales management, digital marketing, and professional education. Peter earned a B.S. degree in Biology and Chemistry from Northern Illinois University, further complementing his comprehensive understanding of the medical field. With his wealth of experience, strategic mindset, and dedication to advancing healthcare, Peter Coffaro is a valuable asset and leader in the medical device industry.