M&A, Strategic Partnerships Shaped the Orthopedic Industry in 2024
To view our article on the Orthopedic Design & Technology Magazine website, click here.
Mergers and acquisitions as well as strategic partnership amongst orthopedic and spine OEMs have had an interesting impact on market segments this year.
Led by Stryker, which has once again demonstrated its inorganic market aggressiveness, these moves are reshaping the competitive landscape, driving innovation and expanding the major players’ product portfolios. Fueled by an aging population and increasing prevalence of musculoskeletal disorders, the ambulatory surgery center (ASC) battleground continues to foster advanced orthopedic solutions.
This column explores the year’s most significant orthopedic-related M&A activities and strategic partnerships, focusing on such OEMs as Stryker, Zimmer Biomet Holdings Inc., Smith+Nephew, Arthrex Inc., DePuy Synthes, Medtronic plc, ZimVie, Orthofix-SeaSpine, and Globus Medical-NuVasive Inc.
Stryker: The most profitable orthopedic implant manufacturer perhaps has been the most aggressive player this year in the M&A landscape, thereby further strengthening its position as a global industry leader. Stryker invested in its future through a half-dozen “tuck-in” acquisitions—a number matching its spending sprees 2016 and 2019. The company’s tuck-in purchases this year include: (1) NICO Corporation, a developer of minimally invasive solutions for brain tumor removal and stroke care. The deal expands Stryker’s neurotechnology footprint; (2) Vertos Medical Inc., a privately held firm specializing in minimally invasive solutions for chronic lower back pain due to lumbar spinal stenosis. This purchase augments Stryker’s pain management prowess; (3) care.ai, a developer of smart hospital systems, virtual care workflows, and room management solutions; (4) MOLLI Surgical Inc., a Canadian firm specializing in wire-free soft tissue localization technology for breast-conserving surgery. Like the NICO deal, this purchase expands Stryker’s capabilities beyond orthopedics; (5) Artelon, a soft tissue fixation firm offering foot/ankle and sports medicine solutions. This add-on will help Stryker expand its sports medicine portfolio; and (6) two products from 4WEB Medical—the Osteotomy Truss System and Ankle Truss System, which complements Stryker’s foot and ankle lineup.
Thanks to these purchases, Stryker not only is continuing to expand in orthopedic and spine offerings, but also continuing to branch out into other market segments, which bodes well for its financial future.
ZimmerBiomet (ZB): One of the most interesting aspects of ZB’s growth strategy is its partnership with commercial real estate services company CBRE Group Inc. to develop and outfit ASCs in the United States. According to its late May announcement, the partnership offers a comprehensive, turnkey solution to surgeons and institutions looking to expand their orthopedic ASC footprint.
Three months after disclosing the CBRE Group alliance, ZB acquired OrthoGrid Systems Inc. to enhance its artificial intelligence-powered planning and navigation capabilities for hip surgery with fluoroscopy. Considering that fluoroscopic procedures expose patients to a greater amount of radiation than other medical imaging methods, it is surprising that fluoroscopy is still used. However, the imaging technique is popular in hip surgeries (used in more than half the total procedures), so it stands to reason why Zimmer Biomet brokered the OrthoGrid deal.
ZB’s best strategic move this year was its limited distribution agreement with THINK Surgical Inc. The union gives ZB to integrate its technology into Think Surgical’s wireless, handheld, TMINI Miniature Robotic System for total knee arthroplasty. The partnership makes ZB the first company to offer surgeons two choices for a robotic knee replacement surgical solution.
Smith+Nephew (S+N): The United Kingdom-based soft tissue repair firm diversified its solutions this year through two partnerships. In July, it teamed up with Healthcare Outcomes Performance Company (HOPCo) in July to collaborate on AI analytics and solutions for use in the ASC. HOPCo’s Vitals platform provides digital tools, analytics, and dashboards deliver better, more efficient coordinated care while also meeting value-based healthcare requirements that help reduce costs. The partnership provides a comprehensive technology platform that encompasses all musculoskeletal procedures performed in the ASC segment.
Three months after announcing the HOPCo alliance, S+N forged a co-marketing agreement for JointVue’s OrthoSonic 3D surgery planning technology, which is touted as the industry’s only ultrasound 3D surgery planning system for knee procedures. The union gives S+N an added weapon in the ASC battlefield for total knee replacements.
S&N started 2024 by closing its $330 million deal for CartiHeal, developer of Agili-C, a porous, resorbable scaffold designed to help regenerate damaged knee cartilage. Agili-C is indicated to treat a wide patient population, including those with lesions in knees with mild to moderate osteoarthritis, a previously unaddressed condition, as well as the approximately 700,000 U.S. patients who undergo cartilage repair procedures every year.
DePuy Synthes (DPS): DePuy Synthes, part of Johnson & Johnson MedTech, continues to maintain its market position through key acquisitions and partnerships. In June, for example, DPS received U.S. Food and Drug Administration clearance for its VELYS Robotic-Assisted solution for unicompartmental knee arthroplasty. DPS gained the VELYS technology through its 2018 purchase of French surgical robotics firm Orthotaxy.
One of DPS’s most important (and key) partnerships is with Swedish medtech firm Ortoma AB. The pairing integrates DePuy Synthes’ technology into the customized Ortoma Treatment Solution for hip replacement surgery. With the efficacy of hip-focused surgical robotics in question, Ortoma’s technology could become a viable solution for both physicians and patients, as it minimizes the ASC footprint while maintaining robotic precision desired by surgeons.
The spine sector has seen its fair share of consolidation and partnerships in 2024 as well, with companies like Zimvie, Orthofix-SeaSpine, and Globus-NuVasive leading the charge. A detailed examination of these moves follows.
The Orthofix-SeaSpine merger closed in 2023 but the union has created an interesting new spine market dynamic this year. Part of the rationale for this merger was to combine SeaSpine’s spinal implants with Orthofix’s expertise in bone growth stimulation and biologics, creating a more comprehensive spine surgery portfolio. However, significant leadership “musical chairs” since the merger indicates the integrated firm needs a few more quarters of stable leadership to really gain market traction.
Similarly, Globus Medical Inc.’s $3.1 billion buyout of NuVasive Inc. was finalized last year but its impacts are still reverberating within the industry, most notably with the layoffs of 150 people at the company’s San Diego headquarters in early 2024. While the combined entity now offers a broad portfolio of spinal implants, robotics, and surgical navigation systems, it remains to be seen whether it can transition into a leading spine market player.
Medtronic has not made any significant acquisitions or formed any partnerships in spine this year, but it continues to innovate and expand its enabling technologies and robotic solutions for this space. Consequently, the aforementioned companies will have to work hard to pluck spine market share from Medtronic.
One of the more interesting divestitures in the spine sector this year was H.I.G. Capital’s purchase of ZimVie’s spine business for $375 million in April. It is still unclear how H.I.G. plans to facilitate growth for this legacy business; our guess is they’ll make some investments to bolster its appeal and then eventually sell it back to a larger strategic.
The orthopedic and spine industries this year underwent rapid consolidation through strategic M&A and partnerships. Companies like Stryker, Zimmer Biomet, Smith+Nephew, Arthrex, DePuy Synthes, Medtronic, Zimvie, Orthofix, and Globus Medical leveraged these moves to drive innovation, expand their respective product portfolios, and improve patient outcomes. As the ASC battlefield continues to unfold in the U.S. market, we expect the industries will continue to evolve in 2025 through strategic acquisitions and collaborations as companies seek to augment their offerings and explore yet unconquered territory.
Florence Joffroy-Black, CM&AA, is a longtime marketing and M&A expert with significant experience in the medical technology industry, including working for multi-national corporations based in the United States, Germany, and Israel. She currently is CEO at MedWorld Advisors and can be reached at florencejblack@medworldadvisors.com.
Dave Sheppard, CM&AA, is a former medical technology Fortune 500 executive and is now focused on M&A as a managing director at MedWorld Advisors. He can be reached at davesheppard@medworldadvisors.com.
To view our article on the Orthopedic Design & Technology Magazine website, click here.
