The medical device industry has rebounded this year from one of its worst periods ever as the Covid-19 pandemic triggered major sales losses in 2020.
Though the emergence of the Omicron variant could threaten growth of medical device sales, a new report by GlobalData and company sales disclosures shows “by early 2021, nearly all segments of the market that had been initially impacted by the decline in sales had recovered to pre-pandemic levels.”
This is good news as the 2021 fourth quarter ends and companies like Abbott Laboratories, Johnson & Johnson, Medtronic, Stryker and Becton Dickinson begin to report their next wave of earnings. Device makers were hit hard in 2020 as physcians and hospitals cancelled elective surgeries and other procedures amid government stay-at-home orders and worries about the spread of Covid-19 before vaccinations emerged at the end of that year.
“The financial statements throughout 2021 by some of the largest medical device companies indicate strong recovery for most of their business units, although the duration and sustainability of their recent growth remains volatile,” GlobalData Senior medical devices analyst Brian Hicks said. “This is primarily due to the ongoing race of global vaccinations and administration of booster shots against the emergence of potentially even more fatal variants of concern, such as the Omicron variant, which may induce additional cancellations of elective procedures.”
Companies like Abbott and Becton Dickinson have performed well through the pandemic because they sell diagnostic tests used to detect the Coronavirus and its various mutations.
But other companies including Medtronic have shown slower growth that began to rebound in their cardiovascular business and other lines in 2021. As one example, Medtronic said in November that its “surgical innovations” portfolio revenues were up 7% to nearly $1.5 billion in the company’s second quarter ended Oct. 29, 2021.
“Excluding the sizeable ‘in vitro diagnostics’ and ‘hospital supplies’ markets, which had both grown significantly from the onset of the pandemic. . . the remaining overall medical devices market to exceed $335 billion in 2021, which reflects an over 20% year over year growth and even a 2.4% growth in comparison to 2019 levels,” GlobalData said.