Mounting Storm — The Financial Reports of the Top Five Orthopedic Giants on the Eve of High-Value Consumables' '4+7' Policy

MedTrend Commentary Recently, the State Council and the Central Commission for Deepening Reform have rolled out major policy deployments targeting high-value medical consumables—heralding the imminent launch of the '4+7' initiative for such products. As early as the beginning of this year, various regions across China had already initiated price reductions for high-value consumables. Orthopedics—one of the most critical domains for high-value consumables—is inevitably affected. How did the orthopedic businesses of the world’s top five medtech giants perform in Q1 2019? Let’s take a look! Q1 2019: Global orthopedic market rankings remained unchanged from 2018, with the top five companies ranked as follows: Johnson & Johnson’s DePuy Synthes, Zimmer Biomet, Stryker, Medtronic, and Smith & Nephew. DePuy Synthes (Johnson & Johnson): Its orthopedic business was the only one among the top five to post a continued decline—primarily due to the divestiture of the Codman Neurosurgery division, which dragged down its spine business. Zimmer Biomet: Orthopedics accounts for the highest share—91%—of its total group revenue; it firmly holds second place. Stryker: Its orthopedic business achieved the strongest growth among the Top 5—up 7%—with all orthopedic segments posting gains. Medtronic: Its spine business—representing 9% of total group revenue—was flat year-on-year in Q1. Yet under pressure from Smith & Nephew’s acquisition and its own divestitures, how will Medtronic safeguard its industry position? Smith & Nephew: The revenue gap between Smith & Nephew and Medtronic’s orthopedic businesses remained stable (approximately $100 million difference in Q1 2018 vs. Q1 2019). The U.S. market served as its largest growth driver, delivering 4.5% growth. DePuy Synthes Overall Revenue Johnson & Johnson’s Medical Devices segment reported total Q1 2019 revenue of USD 6.459 billion—a 4.6% decline year-on-year. Interventional Solutions (formerly cardiovascular) and Vision Care emerged as the two growth pillars. The company’s orthopedic business continued its downward trend in Q1, generating USD 2.204 billion—down 2.2% year-on-year—mainly driven by weakness in the U.S. market. Orthopedics and Surgery contributed nearly equally—each ~36%—to total Medical Devices revenue. Within the Medical Devices segment, orthopedics’ share of total revenue rose slightly—to 36% in Q1 2019 (35% in 2017; 33% in 2018). *Diabetes Care is one of J&J Medical Devices’ business units, comprising three components: Animas Corporation, Calibra Medical Inc., and LifeScan. ・ In 2017, J&J sold Animas to Medtronic; ・ In June 2018, J&J sold LifeScan to private equity firm Platinum Equity for USD 2.1 billion. No public announcement regarding the sale of Calibra Medical Inc. has been made to date; however, Diabetes Care revenue is reported as zero in J&J’s Medical Devices financial statements. Orthopedic Revenue Breakdown Hip: USD 361 million (–0.4% YoY), representing the smallest share—just 16%—within J&J’s orthopedic portfolio. Growth was driven solely by the U.S. market (+2.1%), while international markets declined –3.8%. Knee: USD 369 million (–4.7% YoY)—the only orthopedic segment at J&J to decline in the U.S. market (–2.2%); international markets fell sharply (–8.2%) amid intensifying competitive pressure.

Breakthrough | A Century-Old Giant’s 'Spatial Surgery System' Redefines Sports Medicine

▍Redefining Boundaries: Creating 'Spatial Intelligence' for Surgery The TESSA system comprises three core components: 1. Real-time Tracking Device: A high-performance computing platform powered by NVIDIA GPUs, enabling millimeter-level dynamic tracking of surgical instruments and patient anatomy. 2. Augmented Reality (AR) Navigation: Overlays preoperative 3D models onto the surgeon’s real-time intraoperative field of view—via AR headsets or OR displays—to assist precise anatomical localization. 3. AI-Powered Algorithms: Machine learning optimizes surgical pathways—particularly in ACL reconstruction (ACLR), helping surgeons determine the optimal femoral tunnel placement and avoiding anatomical deviations common in conventional techniques. Currently, the TESSA Spatial Surgery System is undergoing FDA review. Upon receiving 510(k) clearance, TESSA will officially enter the market for anterior cruciate ligament (ACL) knee surgery—especially in scenarios suitable for stereotactic procedures. This clearance not only validates TESSA’s technological maturity but also affirms Smith & Nephew’s leadership in innovative surgical technologies. Smith & Nephew defines 'spatial surgery' as an integrated surgical paradigm combining personalized planning, augmented reality, and real-time data processing. This approach enables real-time interpretation of the surgical field, delivering more precise intraoperative guidance to surgeons. With TESSA’s emergence, spatial surgery is transitioning from concept to clinical reality—and poised to become a pivotal subfield within sports medicine. Scott Schaffner, Global President of Sports Medicine at Smith & Nephew, emphasized that challenging the status quo is central to the company’s DNA—and that Smith & Nephew aims to establish spatial surgery as a core discipline within sports medicine. ▍Challenging the Status Quo: Smith & Nephew’s Innovation 'DNA' Founded in 1856, Smith & Nephew has long specialized in orthopedics, sports medicine, and advanced wound management. Its recently released 2024 financial report reveals robust performance: Group-wide annual revenue reached USD 5.81 billion—up 4.7% from USD 5.549 billion in 2023—with underlying revenue growth at 5.3%. Operating profit surged from USD 425 million in 2023 to USD 657 million in 2024. In 2024, the company launched 16 new products—and over 60% of its revenue growth stemmed from products introduced within the past five years. This underscores Smith & Nephew’s sustained R&D investment to fuel innovation and commercial expansion. In 2023, R&D expenditure accounted for 6.5% of total revenue—significantly above the industry average. Recent strategic acquisitions—including Brainlab’s orthopedic business and Osiris Regenerative Medicine—as well as internally developed projects like the NAVIO handheld robotic system—all reflect a clear strategic pivot toward intelligent, precision-driven solutions. According to 2024 data from the American Academy of Orthopaedic Surgeons (AAOS), 40% of global knee replacement procedures now employ robotic assistance—and that proportion continues rising. As the global leader in sports medicine—with over 20% market share—Smith & Nephew is further consolidating its dominance in soft-tissue repair through TESSA, differentiating itself from competitors like Stryker’s Mako robotic system, which focuses primarily on joint replacement.

Smith+Nephew Cuts Annual Revenue Expectations Amid US Orthopaedic Unit Weakness

Aug 3, 2026

Smith+Nephew reduced its full-year revenue growth forecast to approximately 4% due to persistent weakness in US knee and hip implant demand. The company expects new product launches to cushion the impact on the orthopaedics division.

reuters

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Smith+Nephew Cuts Annual Revenue Expectations Amid US Orthopaedic Unit Weakness

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