The Top 30 Global Medical Device Companies

Still Going Strong

Five years. Does it seem like an eternity or quicker than a flash? In the medical technology business—much like life—clearly it depends on your point of view. Perhaps, if you’re on the research and product development side, it could seem like an excruciatingly long series of trials and errors as you drive a new device to market. If you’re dealing with a product recall, regulatory and compliance hurdles, customer relations issues and reengineering challenges, days can seem like years. On the flip side, financial successes can seem fleeting. When Medical Product Outsourcing launched its inaugural issue in June 2003—our first Top Companies Report—the drug-eluting stent was the new, industry-changing “blockbuster” device. Until that point, the pharmaceutical industry had been the land of bottom line-altering blockbuster products. The drug-coated stent changed all that. Change, however, is the operative word and we’ve seen what’s happened to the stent market in five (arguably short) years. It tumbled following mixed-message studies that longer-term effects of the devices weren’t as safe as originally thought. But the market for the tiny mesh devices has begun a recent rebound (two new players, Medtronic and Abbott, have joined early leaders Johnson & Johnson and Boston Scientific—which should alter the playing field even more). Things change quickly. What hasn’t changed is the device market’s strength. Though the industry has had to deal with challenges as it matures, solid fundamentals, a growing international marketplace and a consistent focus on new product development have fueled expansion. According to research by Chicago, IL-based Navigant Consulting, the worldwide medical device market in 2007 was $220 billion, up from $203 billion in fiscal 2006. Some more liberal estimates have even put the total as high as $270 million. The US device market generated $75.6 billion in revenue for 2007, and a compound annual growth rate of 9% is expected from now until 2013, according to research firm Frost & Sullivan. Factors such as an aging population in North America and Western European countries and an increase in chronic diseases such as diabetes bode well for continued near-term success. But, as a review of the companies on this year’s Top 30 list will clearly indicate, international markets—both as manufacturing and sales centers—increasingly are helping buoy sales and are expected to do so even more in years to come. Developing economies in Asia (more than just China), Latin America and Eastern Europe all provide opportunities. As you examine the list, you’ll also notice that consolidation continues, and it’s not just the big guys gobbling up the startups. Buyouts and private equity shaped the industry in 2007 with big bucks. Dade-Behring, a member of past Top Companies lists, was acquired by imaging and diagnostic powerhouse Siemens. Billion-dollar players such as Kodak Healthcare (now Carestream), Bausch & Lomb and Biomet became privately held firms in 2007. Biomet stays on this year’s list as it continues to publish its financial data (though not obligated to do so). Carestream did not respond to MPO’s requests for information, and Bausch & Lomb declined to participate. And as we go to press, drug-maker Novartis is making a move to purchase eye-care giant Alcon for a whopping $39 billion.  So, once again, the list is ever changing. As you read our report, please take note that while the device and diagnostic companies are ranked according to sales reported for FY 2007 (though we do provide some 2008 figures to date, where possible), some may include non-device sales within a division, such as combination products, drug delivery, software or device-related services. Not all companies publicly break out just the device portion of total revenues. We consulted numerous public documents and contacted company officials as needed to arrive at the best estimates. Also note that foreign currency conversions were done based on the conversion rate at the end of the fiscal reporting period being discussed.