COVID-19 Business Updates Provide Some Clarity

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 807 Articles
A growth-driven and strategic executive, Peter Coffaro commands more than 20 years of progressive management success within the orthopedic industry. Recognized by MedReps.com as one of the top medical sales influencers in the industry; he has 10 years of combined sales management experience and has held positions as a Director, General Manager and Distributor. Peter has worked for some of the top orthopedic companies in the world - Zimmer, DePuy and Stryker. He is also the founder of OrthoFeed: a popular blog that covers orthopedic news and emerging medical technologies. Peter is a three-time Hall of Fame award winner at Johnson and Johnson and has an extensive background in organizational development, business development, sales management, digital marketing and professional education. Peter holds a B.S. degree in Biology from Northern Illinois University.

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