Medtechs adapt to new sales reality amid halt on elective surgeries, hospitals’ financial stress

One by one, medtech companies have warned investors that a temporary pause on elective procedures — the bread and butter for many device maker and hospital balance sheets alike — render best-laid 2020 forecasts obsolete.

Earnings reports kick off next week — J&J, Abbott and Intuitive are all on deck — and based on pre-announced results, analysts at Needham & Co. estimated Thursday that medtechs saw an average sales decline of 40% to 50% late last month, ​potentially indicative of the steep drops likely to persist during the second quarter.

The American College of Surgeons, Surgeon General and Center for Medicare and Medicaid Services are among the authorities that in mid-March implored hospitals to postpone a range of high-margin surgeries. The impetus was to keep uninfected people out of high-risk centers and allow diversion of critical supplies and staff to an anticipated surge in COVID-19 patients.

Intuitive Surgical was earlier than many to report impact to its business from initial hotspot regions like China and Italy, and acknowledge a trend about to balloon in its key U.S. and European markets.​ Boston Scientific, Smith & Nephew and Stryker followed suit and formally rescinded previous financial guidance for the year.

While social distancing policies only came into play during the latter part of the first quarter, some particularly elective surgery-dependent companies report already sizable hits from the shock to the healthcare system. Orthopaedics-focused Zimmer Biomet preliminarily said this week its revenue during the quarter was down roughly 10%.

Some potential good news for these device makers: Many analysts project that revenues lost during the down period, however long it may last, will be waiting on the other side.

By Maria Rachal | MEDTECH DIVE

Image Credit: Dollar Photo Club


About Peter Coffaro 506 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 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.

Be the first to comment

Leave a Reply

Your email address will not be published.


This site uses Akismet to reduce spam. Learn how your comment data is processed.