M&A drives Medtech Big 100 sales, R&D and employment growth

The world’s largest medical device companies are getting bigger with multibillion-dollar deals that helped increase Medtech Big 100 sales, R&D spending and employment despite widespread layoffs.

By Managing Editor Jim Hammerand and Senior Editor Danielle Kirsh

Medical Design & Outsourcing’s Medtech Big 100 ranks the world’s largest medical device companies by revenue. [Illustration by Matthew Claney/WTWH Media]

A wave of mergers and acquisitions made the world’s biggest medical device companies even bigger, with Medtech Big 100 sales, research and development (R&D) spending and headcounts all growing year over year.

Aggregate sales for the 2024 Medtech Big 100 — our annual ranking of the world’s largest device companies by revenue — grew nearly 5% to a record high of $474.8 billion.

That was a faster rate of growth than last year’s 3% and the third consecutive year of growth since the COVID-19 pandemic began, when total Medtech Big 100 sales dropped from 2019 to 2020. More than three-quarters of the companies on our list increased sales, and more than one-third reported double-digit growth.

The M&A activity — and some spinoffs — resulted in new names on our latest list. And the bar keeps getting higher. This year, Artivion is the last company on our list at No. 100 with $354 million in revenue. The aortic device developer took the same spot last year with just under $314 million in sales, which wouldn’t have been enough to make the cut this year.

Revenue gains driven by M&A

About three-fourths of the companies reported sales growth, with 33 companies experiencing double-digit growth. Companies leading in growth increased sales through M&A — like Globus Medical, which reported a 53% increase in revenue after merging with NuVasive — or struck deals to be acquired.

Intravascular lithotripsy tech company Shockwave Medical and sacral neuromodulation tech company Axonics reported sales increases of 49% and 34%, respectively. The fast growth made them attractive acquisition targets. J&J MedTech bought Shockwave Medical for $13.1 billion in May 2024, opening up a spot for someone else on next year’s list. Meanwhile, Boston Scientific has a deal pending to buy Axonics for $3.7 billion.

At the other end of the spectrum, ZimVie became a pure-play dental company by selling off its spine business, decreasing its revenue from continuing operations by half. The spinoff became Highridge Medical, making its Medtech Big 100 debut as an independent company.

The second-largest revenue drop after ZimVie was due to another spinoff. Avanos Medical, which makes devices for pain management and chronic care that help reduce the use of opioids, reported an 18% sales drop after selling its respiratory health business to SunMed Group Holdings.

Other spinoffs include 3M Health Care (now called Solventum) and Mozarc Medical, the kidney care company launched by Medtronic and DaVita. Baxter plans to sell its kidney care business — to be called Vantive — to Carlyle for $3.8 billion.

As companies get larger and more complex, they might realize they lack desired synergies while they look to invest in future growth programs, said Frank Jaskulke, the former Medical Alley Association VP of innovation who just joined Avio Medtech Consulting.

A portrait of Frank Jaskulke, Medical Alley's VP of intelligence and the head of Medical Alley Starts.

Frank Jaskulke [Photo courtesy of Medical Alley]

“The big companies haven’t been spinning off their fastest-growing businesses. They tend to be spinning off ones that are more mature, and as a result often aren’t getting the investment in R&D and other services to advance the technologies,” he said. “By making them independent, those companies can go get their own capital, be very focused, and likely deliver better returns and better innovation.”

Outside of M&A-driven growth, Inspire Medical Systems grew sales by 53% to $624.8 million in sales in 2023. Inspire’s neurostimulator implant treats obstructive sleep apnea, offering patients an alternative to continuous positive airway pressure (CPAP) therapy as Royal Philips exited the CPAP market following waves of recalls. Inspire spent 19% of its revenue on R&D while increasing its workforce by 34%.

A new top research spender

Most Medtech Big 100 companies disclose R&D spending. Medtech Big 100 companies spent $28.9 billion on R&D in fiscal 2023, a $2.5 billion increase (10%) from our analysis last year. But that rate of growth is about half of what we found the year before.

Another metric we analyze is R&D spending as a percentage of a company’s revenue. Among the Medtech Big 100 companies that disclose research spending, each company spent an average of 10% of revenue on R&D. The company spending the largest portion of its revenue on R&D was Novocure (44%), which is developing tumor treatment fields. Two dozen companies spent more than 10% of revenue on R&D.

Of the 74 companies that disclosed their R&D spending, Johnson & Johnson MedTech took the top spot with $3.1 billion. That figure — which does not include Shockwave R&D — equals 10% of J&J MedTech’s revenue, up from 9% the prior year.

Last year’s No. 1, Medtronic, only increased total R&D spending by 1%, while its R&D as a share of revenue remained relatively unchanged.

M&A offsets layoffs for Big 100 employment growth

Most of our Medtech Big 100 companies also disclose employee counts. These 83 companies reported a total of 1.25 million employees, up 6% from last year but still slightly lower than our 2022 count.

M&A again drove the largest employment gains, offsetting layoffs across the industry. For example, Globus Medical nearly doubled its headcount through its merger with NuVasive.

Shockwave Medical grew its workforce by 47% before its acquisition by Johnson & Johnson. Overall, 23 companies had double-digit headcount growth.

MicroPort had the greatest headcount loss in fiscal 2023, employing 1,205 (13%) fewer people. Citing supply chain disruptions and the negative impact of hospital surgeries from intensified compliance controls, MicroPort “actively adjusted our business strategies and implemented various cost control measures” to focus on core products while reducing R&D and administrative spending, CEO and Chair Zhaohua Chang wrote in the annual report.

Other companies with double-digit workforce reductions included Royal Philips, GN Hearing and Cochlear, which all reported 11% drops.

Medtronic’s organization-wide layoffs made headlines in recent years, and while the company declined to quantify the cuts, its February 2024 employment count was down 1% from 2022, which was the last time it offered a precise count.

A portrait of The Mullings Group VP and Senior Partner Holly Scott.

The Mullings Group VP and Senior Partner Holly Scott [Photo courtesy of The Mullings Group]

“We’re seeing investment and hiring trends that are very similar to 2019, which is actually good because we’re now in a resumed cycle of healthy growth and expansion,” said Holly Scott, VP and partner at medtech search firm The Mullings Group. “The bigger organizations are doing what bigger organizations do after a fatty year. They see the bottom fall out and realize they have to revert back to their core competency. … It is smart and it’s necessary if [the strategics] want to continue to grow.”

Scott believes we’re past the worst of the layoffs from major device OEMs, “but we will continue to see the smaller, more subtle, nuanced layoffs.

“The big strategics are going to constantly have to adjust to what the new market looks like,” she said. “Commercialization in medtech, in hospitals, in ambulatory surgical centers, in home health is changing so dramatically that it’s impossible to do projections that are entirely accurate. … But I do see a passionate push toward continuing, healthy growth in medical and healthcare, so with that, there’s ample opportunity on both sides: on the innovative side as well as on the large, strategic side.”