CEO Kevin Lobo has a lot to be excited about at Stryker — the world’s largest orthopedic device company.
Kevin Lobo has seen many successful acquisitions at Stryker’s helm in the last 10 years. The Kalamazoo, Michigan medtech giant’s recent acquisition of Wright Medical has positioned the company to expand its orthopedics range – adding upper extremities to its vast portfolio of orthopedic devices and robotics.
Stryker announced the $4.7 billion acquisition of Wright Medical in November 2019 but didn’t fully acquire the company until November 2020 because of concerns raised by U.S. and U.K. regulators.
The company added Wright’s upper extremities (shoulder, elbow, wrist and hand), lower extremities (foot and ankle) and biologics devices to its portfolio. It then separated and re-organized its businesses into three separate business units within Stryker: upper extremities, core trauma and lower extremities.
“I’ve been extremely pleased with this integration. It’s been one of the best we’ve done in the time I’ve been at Stryker,” Lobo told DeviceTalks host Tom Salemi in a DeviceTalks Weekly Podcast that aired December 3, 2021. “It’s very exciting that this integration [with Wright Medical] has not disrupted the new product engine and has not disrupted anything in the field. We continue to enjoy very good growth rates. Foot and ankle are affected by the pandemic.”
Lobo explained that people and culture are the most significant part of any integration. Before any acquisition, it’s important to consider culture. The bigger the company, the more two different cultures will have to change.
Through the melding of the two companies, Stryker appointed a Wright Medical person to lead upper extremities and lower extremities and a Stryker person leading core trauma and the overall business.
Said Lobo: “We knew their culture would be a good match for ours, and it’s proven to be the case.”
Growing orthopedic robotics
Another big part of Stryker’s orthopedic portfolio is its Mako robotic-assisted surgery platform that it acquired in 2013. Mako’s SmartRobotics technology combines 3D CT-based planning, haptic technology and data analytics for better outcomes in total knee, total hip and partial knee procedures.
The company has grown its net sales exponentially since buying Mako Surgical for $1.6 billion in 2013. Stryker made $9 billion in sales that year and has risen quickly to $14.4 billion in 2020. Its orthopedics business grew from $3.9 billion in 2013 to just under $5 billion in 2020. It made $14.9 billion in sales and $5.3 billion in orthopedic sales in 2019 — the year before the COVID-19 pandemic hit.
One out of two Stryker knee implants in the U.S. are implanted using the Mako system. Lobo said that Stryker also sells Mako into a competitive implant market 60% of the time. The company has sold more than 1,300 units globally and over 1,000 units in the U.S.
“It’s a spectacular growth that we’ve had. Far faster than I expected,” Lobo said. “I really believed this would be compelling and we would have a strong adoption, but it’s been faster than I expected. We only launched the total knee application about four years ago, and we’re up to one of two knees going in in the U.S. is going in with Mako.”
The surgical robot market is seemingly having its moment with Intuitive Surgical’s da Vinci surgical robot dominating and Medtronic’s Hugo RAS being in trials (not to mention Johnson & Johnson’s much-anticipated Ottava). In the ortho surgical robotics space, Mako now has competition from Zimmer Biomet’s Rosa, Smith+Nephew’s Cori and J&J’s Velys systems. Lobo welcomes the competition and wants to see interest in robotics to keep rising.
“More players that come into the market creates more interest,” he said. “We love our chance to side-by-side compete with any of the systems on the market.”