Editor’s note: This article has been updated to include Medtronic’s earnings results.
Macroeconomic pressures continued to weigh on medical device companies for another quarter, but there were also signs of hope for global supply chains and inflation.
Stryker and Boston Scientific were among the companies that said easing supply chain constraints have helped their finances. Stryker CFO Glenn Boehnlein told investors that being able to use ocean freight more and getting back to a regular manufacturing cadence have helped the company’s gross margins, while Boston Scientific CFO Dan Brennan said supply consistency is not “fully back to normal again, but it has improved.”
China’s recent anti-corruption campaign has been another area of focus for the industry. As hospitals faced more scrutiny, medical equipment purchases slowed, with Philips CEO Roy Jakobs attributing a short-term slowdown in orders to the anti-corruption measures. GE HealthCare CEO Peter Arduini described a more limited impact, saying that the company is starting to see signs of the campaign stabilizing.
As with last quarter, investors continued to ask medtech companies how weight loss drugs could affect their businesses. Device companies seemed largely unconcerned, even in the diabetes sector, where Abbott and Dexcom pointed to internal analyses showing people using GLP-1s and continuous glucose monitors together resulted in better adherence. Intuitive Surgical also rebuffed concerns about the GLP-1s, noting that while the drugs may have dampened patients’ interest in bariatric surgery, the company was still gaining market share in that segment.
Another trend that continued across the industry was layoffs and cost-cutting in a tight market. Siemens Healthineers recently announced plans to cut 300 jobs as it restructures its diagnostics business, amid rumors of a potential sale. ResMed recently cut 5% of its workforce and overhauled its C-suite in a restructuring, and Johnson & Johnson announced plans to restructure its orthopedic business, although it shared few details about what product lines would be affected.
Here’s a recap of MedTech Dive’s recent earnings coverage: