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Orthopedics Device Space Gaining Prominence: 3 Stocks in Focus
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With the rising incidence of orthopedic disorders, such as degenerative bone disease and the expanding geriatric population, the prospects of the orthopedic device space are anticipated to be bright over the next five years.
Orthopedic devices are used for managing and preventing injuries and deformities of the musculoskeletal system. These assist in replacement of bones or missing joints and provide support to a fractured bone.
The COVID-19 pandemic has had a deterring impact on the orthopedic devices market. According to the Global Market Insights study, around 49.5% of the participants reported that the orthopedic outpatient practice was reduced by 75% in early 2020. However, the situation is seemingly promising in 2022 with potential upside.
Here we have discussed three companies, Orthofix Medical Inc. (OFIX - Free Report) , Stryker Corporation (SYK - Free Report) and NuVasive, Inc. , which we think will gain enormously from the development in this space.
Orthopedics Device Gaining Prominence
Per a new market intelligence report by Fortune Business Insights, the global orthopedic devices market size was $53.44 billion in 2019 and is projected to reach $68.51 billion by 2027, at a CAGR of 6.6%, with joint reconstruction and spinal devices segment being the highest revenue generator.
Geographically, North America dominated the orthopedic devices market in 2020 by capturing 94% of the revenue share and is expected to maintain the trend owing to the well-developed healthcare infrastructure and rise in number of orthopedic surgeries. Europe is the second-largest market owing to growing awareness toward technologically advanced orthopedic devices. However, encouragingly, Asia-Pacific is projected to register comparatively higher CAGR in the coming years.
Demographic Trend in Favor Too
Rising incidence of orthopedic disorders along with the growing geriatric population will fuel market growth. According to the United Nations World Population Ageing report, the estimated number of people aged 65 years or above is 727 million globally. The number is anticipated to double and reach 1.5 billion by the end of 2050. This will open up huge opportunities for companies involved in orthopedics devices.
Thus, for investors who are keen on placing a bet on the healthcare space for long-term gains, the orthopedics market undoubtedly holds immense potential.
2 Prominent Trends in Orthopedic Device Space
Let’s look at a couple of key trends emerging in the orthopedic space in recent years.
Robotic Surgery Boosting Orthopedics: Orthopedic surgical robots not only assist healthcare service providers in devising effective surgical blueprints but also enable seamless optimization of implant placements and mechanical alignments.
As the deployment of orthopedic surgical robots is set to take off in the coming years, it will enable successful orthopedic surgeries with minimum post-operative complications. Persistence Market Research expects the orthopedic surgical robots market revenue to exceed $4,100 million by the end of 2029. In line with this, in April 2021, Globus Medical (GMED - Free Report) launched CREO ONE designed for spine surgery with ExcelsiusGPS. Notably, GMED’s CREO ONE screw is the first of its kind to provide advanced robotic integration, streamlined workflow and pullout strength.
3D Printing in Action: Another technology orthopedic device companies are trying to leverage is 3D printing. Per a report by Research and Markets, the orthopedic 3D printed devices market is poised to rise by $1.94 billion during 2021-2025, registering a CAGR of 25.18%. In this regard, Stryker has been one of the early adopters of the 3D printing technology. The company’s FDA-approved Tritanium TL Curved Posterior Lumbar Cage is a 3D-printed interbody fusion cage intended for use as an aid in lumbar fixation.
3 Stocks in Focus
We have selected three companies that we believe are well poised given the encouraging prospects of the orthopedics market.
Year-to-Date Performance
Image Source: Zacks Investment Research
Our first pick is the global medical device company with a spine and orthopedics focus, Orthofix, is our first pick. In March 2022, the company announced the receipt of the FDA 510 (k) clearance and the first patient cases with the TrueLok EVO Ring Fixation System. This advanced system design enables physicians to better assess bone anatomy, during surgery and post-operative care. In February 2022, OFIX announced the full market launch of Opus BA, a synthetic bioactive bone graft solution for cervical and lumbar spine fusion procedures.
For 2023, Orthofix has an expected earnings growth rate of 13.6%. Year to date, shares of OFIX have gained 6.4% against the industry's 10.9% fall. It currently carries a Zacks Rank #3 (Hold).
Our next pick is the largest medical device company operating in the global orthopedic market, Stryker. In recent times, Stryker launched the robotic-arm assisted total knee arthroplasty application for use with its Mako System. The system also allows for intra-operative planning and assists in bone resectioning procedures. According to the fourth-quarter earnings update, SYK continues to witness strong demand for Mako on its unique features and healthy order book despite financial constraints stemming from the COVID-19 pandemic. This, in turn, positions the company well to sustain momentum in robot sales and recon share market gains.
For 2023, Stryker has an expected earnings growth rate of 12%. Year to date, shares of SYK have gained 0.6% against the industry's 6% fall. It currently carries a Zacks Rank #3.
Our final pick is the leader in spine technology innovation focused on developing minimally-disruptive surgical products and procedurally-integrated solutions for the spine, NuVasive. In January 2022, NUVA received the FDA 510(k) clearance for expanded indications of use for Attrax Putty with its comprehensive thoracolumbar interbody portfolio for spine surgery. Attrax Putty is the first synthetic biologic to receive indications for use in interbody fusions of the thoracolumbar spine. Further, the company expects to see continued growth from its international core spine business in 2022, led by the teams in Europe, Japan and Asia-Pacific as well as from its NuVasive Specialized Orthopedics portfolio.
Image: Bigstock
Orthopedics Device Space Gaining Prominence: 3 Stocks in Focus
With the rising incidence of orthopedic disorders, such as degenerative bone disease and the expanding geriatric population, the prospects of the orthopedic device space are anticipated to be bright over the next five years.
Orthopedic devices are used for managing and preventing injuries and deformities of the musculoskeletal system. These assist in replacement of bones or missing joints and provide support to a fractured bone.
The COVID-19 pandemic has had a deterring impact on the orthopedic devices market. According to the Global Market Insights study, around 49.5% of the participants reported that the orthopedic outpatient practice was reduced by 75% in early 2020. However, the situation is seemingly promising in 2022 with potential upside.
Here we have discussed three companies, Orthofix Medical Inc. (OFIX - Free Report) , Stryker Corporation (SYK - Free Report) and NuVasive, Inc. , which we think will gain enormously from the development in this space.
Orthopedics Device Gaining Prominence
Per a new market intelligence report by Fortune Business Insights, the global orthopedic devices market size was $53.44 billion in 2019 and is projected to reach $68.51 billion by 2027, at a CAGR of 6.6%, with joint reconstruction and spinal devices segment being the highest revenue generator.
Geographically, North America dominated the orthopedic devices market in 2020 by capturing 94% of the revenue share and is expected to maintain the trend owing to the well-developed healthcare infrastructure and rise in number of orthopedic surgeries. Europe is the second-largest market owing to growing awareness toward technologically advanced orthopedic devices. However, encouragingly, Asia-Pacific is projected to register comparatively higher CAGR in the coming years.
Demographic Trend in Favor Too
Rising incidence of orthopedic disorders along with the growing geriatric population will fuel market growth. According to the United Nations World Population Ageing report, the estimated number of people aged 65 years or above is 727 million globally. The number is anticipated to double and reach 1.5 billion by the end of 2050. This will open up huge opportunities for companies involved in orthopedics devices.
Thus, for investors who are keen on placing a bet on the healthcare space for long-term gains, the orthopedics market undoubtedly holds immense potential.
2 Prominent Trends in Orthopedic Device Space
Let’s look at a couple of key trends emerging in the orthopedic space in recent years.
Robotic Surgery Boosting Orthopedics: Orthopedic surgical robots not only assist healthcare service providers in devising effective surgical blueprints but also enable seamless optimization of implant placements and mechanical alignments.
As the deployment of orthopedic surgical robots is set to take off in the coming years, it will enable successful orthopedic surgeries with minimum post-operative complications. Persistence Market Research expects the orthopedic surgical robots market revenue to exceed $4,100 million by the end of 2029. In line with this, in April 2021, Globus Medical (GMED - Free Report) launched CREO ONE designed for spine surgery with ExcelsiusGPS. Notably, GMED’s CREO ONE screw is the first of its kind to provide advanced robotic integration, streamlined workflow and pullout strength.
3D Printing in Action: Another technology orthopedic device companies are trying to leverage is 3D printing. Per a report by Research and Markets, the orthopedic 3D printed devices market is poised to rise by $1.94 billion during 2021-2025, registering a CAGR of 25.18%. In this regard, Stryker has been one of the early adopters of the 3D printing technology. The company’s FDA-approved Tritanium TL Curved Posterior Lumbar Cage is a 3D-printed interbody fusion cage intended for use as an aid in lumbar fixation.
3 Stocks in Focus
We have selected three companies that we believe are well poised given the encouraging prospects of the orthopedics market.
Year-to-Date Performance
Image Source: Zacks Investment Research
Our first pick is the global medical device company with a spine and orthopedics focus, Orthofix, is our first pick. In March 2022, the company announced the receipt of the FDA 510 (k) clearance and the first patient cases with the TrueLok EVO Ring Fixation System. This advanced system design enables physicians to better assess bone anatomy, during surgery and post-operative care. In February 2022, OFIX announced the full market launch of Opus BA, a synthetic bioactive bone graft solution for cervical and lumbar spine fusion procedures.
For 2023, Orthofix has an expected earnings growth rate of 13.6%. Year to date, shares of OFIX have gained 6.4% against the industry's 10.9% fall. It currently carries a Zacks Rank #3 (Hold).
Our next pick is the largest medical device company operating in the global orthopedic market, Stryker. In recent times, Stryker launched the robotic-arm assisted total knee arthroplasty application for use with its Mako System. The system also allows for intra-operative planning and assists in bone resectioning procedures. According to the fourth-quarter earnings update, SYK continues to witness strong demand for Mako on its unique features and healthy order book despite financial constraints stemming from the COVID-19 pandemic. This, in turn, positions the company well to sustain momentum in robot sales and recon share market gains.
For 2023, Stryker has an expected earnings growth rate of 12%. Year to date, shares of SYK have gained 0.6% against the industry's 6% fall. It currently carries a Zacks Rank #3.
Our final pick is the leader in spine technology innovation focused on developing minimally-disruptive surgical products and procedurally-integrated solutions for the spine, NuVasive. In January 2022, NUVA received the FDA 510(k) clearance for expanded indications of use for Attrax Putty with its comprehensive thoracolumbar interbody portfolio for spine surgery. Attrax Putty is the first synthetic biologic to receive indications for use in interbody fusions of the thoracolumbar spine. Further, the company expects to see continued growth from its international core spine business in 2022, led by the teams in Europe, Japan and Asia-Pacific as well as from its NuVasive Specialized Orthopedics portfolio.
For 2023, NuVasive has an expected earnings growth rate of 18.9%. Year to date, shares of NUVA have gained 8.8% against the industry's 6% fall. It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.