Intuitive Surgical Posts Strong Financial and Operational Results for the 4th Quarter Intuitive Surgical (NYSE:ISRG) announced fourth quarter results on January 23 of this year. Revenues rose 25% over the fourth quarter of 2023 to $2.4 billion. Earnings were up 13% on a GAAP basis. Perhaps of greater interest are the operational statistics Intuitive provides with the financial data. The Company placed 493 systems in the quarter vs. 415 in the same quarter in 2023. Of these placements, 174 were of the da Vinci 5 system. Analysis Little analysis is needed. Intuitive continues to dominate the soft-tissue RAS market. Of greater interest is how its challengers, most notably Medtronic and J&J, intend to challenge this moat. For more information please see Intuitive’s press release here. Questions of comments? Please contact Tony Freeman at tfreeman@asfreeman.com.
News/Reports
Sales up but only in certain segments, J&J Surgery off slightly Johnson & Johnson J&J reported on Wednesday a 4.3% increase in 2024 over 2023 revenues. Looking deeper, the Medtech segment reported a 4.8% increase to $31.9 billion. Breaking out the Medtech businesses, Cardiovascular represented almost of all of the gain, rising 21.4% in the year. Orthopedics rose 2.4%, Vision rose 1.5%. Surgery declined 1.9%. Most of the surgical decline appears to be around endocutters and energy devices but we are still working to verify this information. Abbott Abbott, also reporting on Wednesday, announced their Medical Device unit saw a 13.7% increase in revenues with Diabetes Care and Structural Heart showing particularly strong growth. All product groups grew during the year. Electrophysiology, Rhythm, Heart Failure, Vascular, and Neuromod all grew over 5%. Diagnostics dropped 6.5% due to lower demand for Covid 19 test kits. Summary These two medtech Top 5 companies showed strength in CV and Diabetes. J&J’s decline in its Surgery franchise (second largest globally after Medtronic) is a topic worth following as we move through 2025. Please contact Tony Freeman attfreeman@asfreeman.com with questions and comments.
I’m pleased to announce A. S. Freeman Advisors’ annual Global Trends in Medtech 2024 is available here for download and distribution. Key points in this year’s presentation include: The medtech industry will exceed $600 billion this year. The rise in elderly populations around the world will strain the financial resources of governments and insurance organizations Medical staffs will increasingly be driven to capacity as patient loads and dated workflow procedures strain care centers Medtech companies have discovered digitization as the most effective approach to improving physical and fiscal outcomes for all constituencies in healthcare Major OEMs are studying how to improve workflow in care settings and building that logic into devices Supply chains are shifting to better match OEMs preferred three tier structure, similar to the aerospace supply chain Opportunities still exist for smaller contract manufacturers to differentiate themselves from larger CMs who are starting to fill the prime contractor role on the most desirable programs As always, I am happy to present Global Trends to you or your firm. Please reach me at tfreeman@asfreeman.com with questions, comments, or requests. Best regards, Tony Freeman
DuPont de Nemours, Inc. (NYSE:DD) announced on June 25 that it will acquire Donatelle Plastics, a well-established medtech contract manufacturer based in New Brighton, MN. No terms were announced. The transaction is expected to close later this year. Though Dupont has long supplied branded materials such as Tyvek™ to the medtech industry, the purchase of Donatelle reinforces their expansion into medtech contract manufacturing. Last year DuPont acquired Spectrum Plastics Group, supplementing their contract manufacturing work with Liveo™ silicone products, originally a Dow Corning product line. DuPont’s strategy of building out contract manufacturing to complement its global position in specialty materials bears watching. For more information please visit: https://www.dupont.com/news/dupont-to-acquire-donatelle-plastics-incorporated.html Please contact tfreeman@asfreeman.com with questions and comments. A. S. Freeman Advisors was not involved in this transaction. We are reporting the deal as a point of interest to our clients and colleagues.
In my latest column for MPO, I discuss the risks new weight-loss drugs (GLP1s) may pose to OEMs and contract manufacturers. Heavy Harm or Slim Chance? The Impact of GLP1s on Medtech The highest existential risk is not to OEMs but to contract manufacturers specializing in the areas where GLP1s will delay surgeries. Read the column here.
A.S. Freeman will be in Anaheim, California for MD&M West 2024, which takes place from February 6-8, as well as for the annual mdmX Networking event Monday February 5. If you would like to meet up in Anaheim, please drop me a line, or give me a call at 917-868-0772.