COVID-19 Business Updates Provide Some Clarity

April 15, 2020 COVID-19, Medical Devices, Orthopedics

As more medical device companies update 2020 guidance, the business impact of COVID-19 becomes somewhat clearer.

The unknowns still outnumber the knowns, but recent business updates provide some clarity around how the medical device industry is fairing during the COVID-19 pandemic. First and foremost, it is clear that companies are hurting in the areas of elective procedures, which are being deferred. But there may be some silver linings hidden amongst the bad news.

Needham & Co. medtech analyst Mike Matson estimates that medical device sales across the industry will continue to drop by an average of 40% to 50% until the economy begins to reopen and hospitals start to resume elective procedures.

Matson’s estimate excludes companies like Carlsbad, CA-based GenMark, which was quick to deliver much-needed testing tools for the new virus. Earlier this month GenMark preannounced first-quarter revenue of about $38.7 million, representing an increase of about 80% over the company’s first quarter of 2019.

The analyst also noted that it is extremely difficult to forecast revenue trends in the industry right now as many pure-play medical device companies are pulling 2020 guidance due to the unprecedented lack of visibility. But Matson said that management commentary during first-quarter earnings calls may offer some insight. Hopefully.

‘The underlying fundamentals of the market remain intact’

Johnson & Johnson executives did, in fact, provide some of those hoped-for insights during its first-quarter earnings call on Tuesday. While J&J’s consumer and pharmaceuticals businesses are going strong, the medical device segment is feeling the pinch from COVID-19. The New Brunswick, NJ-based company saw its first-quarter medical device sales drop 4.8% (on a constant currency basis) compared to the first quarter of 2019.

By Amanda Pedersen | MD+DI

Image Credit: Gerd Altmann / Pixabay

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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 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.