Wednesday, June 14, 2017 2:35:54 AM
Global Spine Market Trends
Global Spine Market
Zimmer-Biomets current operating Manifesto
Strategic Acquisition
Zimmer's Signature Solutions
Zimmer-Biomets objective is to improve patient care, which means offering the best products on market that are reasonably priced. This is precisely the need Si3N4 fills due to its reduced healing time (exceptional osteoconductive properties), its anti-bacterial properties that could save healthcare billions annually, & its soluble nature that allows any wear debris that does get into the body to be excreted via our normal bodily functions.
Zimmer Biomet Rides on Spine Business, Knee Challenges Stay
Q4 2016 ER Transcript
Q1 2017 ER Transcript
Zimmer’s Spine & Dental Markets
From some examination of Zimmer’s 2016 10k one can see two major areas where Zimmer is not highly competitive. Dental and especially Spinal markets are lucrative market segments Zimmer very much wants to tap into. At the close of 2016 Zimmer had about 6% (662m) market share in spine. Their 2016 dental revenue was 427.9 or 10% market share.
Zimmer spine is divided into two basic divisions Americas Spine (oversee spines sales in North, Central, South America) & LDR which has more global presence. LDR revenue is expected to bring in 1-2% of Zimmer’s annual revenue, which does not represent huge growth. Dvorak’s plan is not overnight success but incremental gains; he’s playing the long game. Still, Zimmer will not change its position in the global spine market with its 2-4% CAGR growth with only 1-2% growth. Zimmer desperately needs products that can differentiate it from the competition. This also applies to dental where Dvorak is looking to establish a larger footprint.
2016 10k (pg: 3, 4, 21, 23, 25)
Emerging Markets
Zimmer’s 2nd major objective is capturing emerging markets. No area is expected to grow faster than Asia Pacific region with is estimated CAGR of 8.6% through 2024. The largest market is Japan, which currently comprises 44% of the Asian market. Zimmer does not currently have a spinal sales presence in Japan nor does LDR. The second largest market is China, which is growing at a faster rate than Japan. This is largely due to China’s large population gaining access to better healthcare. By 2021 the spine market in Japan, China, & India is expected to eclipse 2 billion annually and China is expected to be the leading market in Asia. You can bet that Zimmer’s strategy would be to align itself to capture the growth in these markets, who are very ceramic friendly.
China, India, Japan spine markets 2011-2021
Other key emerging markets are Russia, Mexico, & Brazil. Brazil’s spine market was estimated to be 490m in 2014 and is expected to reach 624m by the end of 2019 growing at a rate of 4.97%. Mexico market size was 278m in 2014 and is expected to be 354m by end of 2019. That’s a cagr rate of 4.91% . I bring up these 2 markets because Zimmer-Biomet has some legal difficulty stemming from bribes paid to local officials. Zimmer-Biomet is current under scrutiny in both these markets for what appears to be 3 more years. Acquiring Amedica and thus Sintex distribution deal may provide an opportunity for Zimmer to operate behind the scenes. This could help restore their image.
Zimmer Biomet Holdings Inc. Agrees to Pay $17.4 Million to Resolve Foreign Corrupt Practices Act Charges
How to Capturing Emerging Markets
One last thing I wanted to touch on was Weigao. Zimmer has a decent sized presence in China and does have some amount of sales structure in place to sell spine devices in China via LDR. However, it does not have a strong spine sales presence in China. Leveraging partnerships with local companies is key for expansion in China. Acquisitions are not necessarily the best way to go. I have attached the following research paper on how best to capture emerging markets. Very informative.
Medical Growth In Emerging Markets
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