ARTICLE SUMMARY:
NASS 2023 opens October 18 in Los Angeles, amid an ebbing of the pandemic and significant, industry-shifting M&A. This year’s meeting is likely to bring updates on the Globus-NuVasive, merger, which makes it the 2nd largest spine company after Medtronic, and possibly Orthofix, which bought SeaSpine last year and is now the 7th largest spine company. Medtronic and Alphatec, companies showing a strong 2023, are holding investor meetings. Innovations showcased this year will be incremental.
BTIG’s Managing Director Equity Research, MedTech Analyst Ryan Zimmerman discusses with his expectations for investor updates at this year’s North American Spine Society meeting, which begins October 18 in Los Angeles.
The year has been heavy on significant M&A, following completion of the Orthofix buyout of SeaSpine, and, in September, of the Globus and NuVasive merger. (See “The Pros and Cons of a Globus-NuVasive Merger,” MedTech Strategist, March 22, 2023.) These deals put Globus in the number 2 position, behind Medtronic, and rank Orthofix as the seventh largest spine company. Medtronic, which has had a surprisingly strong year to date, along with Alphatec, which is benefiting from the M&A disruptions of competitors, and Globus, which is at the forefront of pushing out enabling technologies in spine, are planning investor meetings at NASS. Innovation showcased will be ‘evolutionary,’ not revolutionary, with some areas of focus likely to be biologics, cervical spine disc replacement (CDR), as well as innovations by smaller companies in niche fields.
The pandemic aftermath, as well as industry consolidation, has caused disruption but also created opportunities for other players, says Zimmerman, who points out that the $11 billion to $12 billion industry enjoyed mid-single-digit growth, above its recent averages, in 2022, which has been accelerating in 2023. The first quarter 2023 saw 7.1% growth year on year, while the second quarter growth was 5.9%, due to pent-up demand, easier comparisons to last year, and, to a lesser extent, pricing upgrades as more companies wrap robotics into their implant sales, rather than charge them separately as capital expenses. For more on how these trends affect specific companies, and what he expects to learn at NASS, please watch the discussion between Ryan and MedTech Strategist’s Wendy Diller. Due to consolidation, the largest spine companies now are, in order of rank, from largest to smallest: Medtronic, Globus, Johnson & Johnson/ DePuy, Stryker, Zimvie, Alphatec, Orthofix and Xtant Medical.
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