Originally Published MX March/April 2004
BUSINESS NEWS
Top Medtech Firms Increase Sales in 2003With few exceptions, top-earning medical technology companies announced positive sales growth during 2003. In annual reports and company releases issued earlier this year, the top-20 publicly traded medtech firms showed robust gains over 2002. All but two companies posted increased revenue, with many companies reporting year-to-year sales growth in the double digits (see Table). The average yearly gain for the group was 10.3%.
| Company | 2003 revenues (calendar year) |
2002 revenues (calendar year) |
Variance (%) |
4Q03 revemies |
4Q02 revenues |
Variance (%) |
| Johnson & Johnson | 14,914 | 12,583 | 18.5 | 4,141 | 3,318 | 24.8 |
| GE Medical Systems | 10,198 | 8,955 | 13.8 | 3,320 | 2,750 | 20.7 |
| Siemens Medical Solutions | 9,279 | 9,531 | -2.7 | 2,050 | 2,278 | -11.1 |
| Baxter International Inc. | 8,916 | 8,110 | 9.9 | 2,537 | 2,261 | 12.2 |
| Tyco Healthcare | 8,707 | 7,588a | 14.7 | 2,180 | 1,969a | 10.7 |
| Medtronic Inc.b | 8,571 | 7,310 | 17.3 | 2,195 | 1,913 | 14.7 |
| Philips Medical Systems | 7,463 | 8,526 | -14.2 | 2,253 | 2,354 | -4.4 |
| Abbott Laboratories | 6,998 | 6,652 | 5.2 | 1,870 | 1,766 | 5.8 |
| Cardinal Health | 6,900 | 6,426 | 7.3 | 1,839 | 1,639 | 12.2 |
| Becton Dickinson & Co. | 4,675 | 4,140 | 12.9 | 1,200 | 1,052 | 14.1 |
| 3M Healthcare | 3,995 | 3,560 | 12.2 | 1,020 | 918 | 11.1 |
| Guidant Corp. | 3,699 | 3,161c | 17.0 | 951 | 878c | 8.0 |
| Stryker Corp. | 3,625 | 3,012 | 20.0 | 1,001 | 829 | 21.0 |
| Boston Scientific Corp. | 3,476 | 2,919 | 19.0 | 939 | 814 | 15.3 |
| Amersham plc | 3,085 | 3,022 | 2.0 | N/A | N/A | N/A |
| Kodak Health Imaging | 2,431 | 2,274 | 6.9 | 704 | 619 | 13.7 |
| Smith & Nephew | 2,202 | 2,024 | 8.8 | N/A | N/A | N/A |
| Beckman Coulter Inc. | 2,193 | 2,059 | 6.5 | 639 | 596 | 7.2 |
| St. Jude Medical | 1,933 | 1,590 | 21.6 | 519 | 410 | 26.6 |
| Alcon Inc. | 1,586 | 1,439 | 10.2 | 427 | 385 | 10.9 |
| aRestated bFourth quarter ending January 23, 2004 cAdjusted |
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| Reported revenues of the top-20 publicly traded medical technology companies for calendar 2003 versus calendar 2002, and for October through December 2003 (4Q03) versus October through December 2002 (4Q02). Only divisions reporting medical product revenues are included; pharmaceutical, consumer-product, and healthcare services divisions are excluded. All figures in $ millions at February 2004 rate. | ||||||
Cardiology companies reported some of the strongest year-over-year sales increases. St. Jude Medical (St. Paul, MN) led all firms with a 21.6% sales increase over 2002. The company attributed the increase to strong performance from its implantable cardioverter-defibrillator, pacemaker, and vascular closure products. Other solid cardiology companies included Medtronic Inc. (Minneapolis) and Guidant Corp. (Indianapolis), which each posted yearly gains of approximately 17%.
In a prepared statement, Guidant CEO Ronald W. Dollens noted that the company grew its overall sales while reducing its dependence on coronary stent sales in the United States. For the year, Guidant reported a 30% decline in its U.S. stent sales. The company's worldwide stent sales declined by 8%.
However, in late February, Guidant announced that it had formed a strategic alliance with Cordis Corp. (Miami Lakes, FL), a Johnson & Johnson company, to copromote Cordis's Cypher drug-eluting stent. The move aims to prevent leadership in the lucrative drug-eluting stent market from falling to Boston Scientific Corp. (Natick, MA), which predicted in February that its Taxus drug-eluting stent would win 70% of the market by the end of 2004 and double the company's earnings over the next two years.
Boston Scientific posted a 2003 sales increase of 19% with $3.4 billion. Johnson & Johnson (New Brunswick, NJ) posted the top-20 group's highest 2003 sales with nearly $15 billion—an 18.5% increase over its sales in 2002.
Despite the group's strong overall increases, the ranking changed among the top five companies. While J&J remained first on the list, GE Medical Systems (Waukesha, WI) jumped from third place to second. The company is poised to catch up with J&J following its announcement last fall that it agreed to acquire Amersham plc (Buckinghamshire, UK).
Another top-20 company that reported a strong increase was Stryker Corp. (Kalamazoo, MI) at 20%.
The figures for two medical imaging companies—Siemens Medical Solutions (Munich) and Philips Medical Systems (Andover, MA)—were not so positive. Both companies reported decreased revenues for the year and fourth quarter. Philips posted the largest 2003 sales decline with 14.2%. Siemens reported a fourth-quarter loss of 11.1%.
Similar to the top-20 group's yearly growth, quarter-over-quarter gains were also strong. For the 18 companies that reported 4Q03 results, the average sales increase was 11.9%. Again, St. Jude was first among the group, with an increase of 26.6%. Johnson & Johnson ranked second with an increase of 24.8%. Other companies reporting significant fourth-quarter growth included Stryker (21%), GE Medical Systems (20.7%), Boston Scientific (15.3%), Medtronic (14.7%), Becton Dickinson & Co. (Franklin Lakes, NJ; 14.1%), and Kodak Health Imaging (Rochester, NY; 13.7%). Fourth-quarter figures for Amersham and Smith & Nephew (London) were not available.
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