The mood was upbeat – yet tentative – at this year’s Annual Meeting of the American Academy of Orthopaedic Surgeons (AAOS 2015) held in Las Vegas in March as the industry braces for transformational change. Upbeat because the orthopedic market has returned to historical growth rates with stable procedural volumes across all segments in spite of significant pricing pressure; tentative owing to the inevitable disruption that will result from mega deals taking place in this space. Two large transactions will soon close that are of such scale, it will no doubt alter the orthopedic landscape while creating uncertainty among stakeholders at all levels: Zimmer Biomet Holdings Inc.’s $13.35 billion merger with the number four player, Biomet Inc., will create a formidable number two player in the global orthopedic market with $7.8 billion in combined revenues that will surpass Stryker Corp.; and Wright Medical Group NV’s $3.3 billion merger with Tornier NV in an all-stock transaction will create a pure-play extremities/biologics company with a combined ownership by 52% of Wright’s and 48% of Tornier’s shareholders. (See [A#2014700061].) [See Deal][See Deal]
Orthopedics: Bracing For Change
Despite ongoing economic pressures, the worldwide orthopedic market grew 3% in 2014, reaching $34.7 billion. Although consolidation continues to cause uncertainty and disruption in this space, manufacturers at this year’s AAOS meeting were upbeat about the future as they brace for changes in the competitive landscape, health care delivery, and reimbursement.