The Top 10 Cardiovascular Device Companies: Market trends, growth strategies, and SWOT analyses

• Publication date: August 2010

The cardiovascular (CV) device industry is highly competitive and has reached maturity resulting in single digit growth rates of prominent devices such as pacemakers, defibrillators, and drug eluting stents (DES). Innovations in niche sectors such as atrial fibrillation (AF) and ventricular assist devices (VADs) are poised for double digit growth in the near to mid-term future. From 2007–09, the top three companies in the CV segment acquired ...

The cardiovascular (CV) device industry is highly competitive and has reached maturity resulting in single digit growth rates of prominent devices such as pacemakers, defibrillators, and drug eluting stents (DES). Innovations in niche sectors such as atrial fibrillation (AF) and ventricular assist devices (VADs) are poised for double digit growth in the near to mid-term future. From 2007–09, the top three companies in the CV segment acquired other smaller firms to expand their product portfolios and to gain market share in new geographies. Some major companies also established manufacturing facilities outside the US to enhance cost containment and product distribution. The CV device market remained relatively resilient during the economic downturn compared with other healthcare segments. The 2007–09 period also witnessed a considerable rise in consolidation activities among major companies.
This report provides detailed profiles of the top 10 cardiovascular (CV) device companies and brief profiles of other major players. It also elucidates trends within the cardiovascular device market. The detailed profiles contain descriptions of business, financial performance, growth strategies and SWOT analyses. The analysis is based on:
• Each company’s consolidated and segmental financial performance;
• Each company’s growth strategies and major acquisitions and divestments relating to the CV devices market;
• Key partnerships and alliances formed by these companies;
• Business-related strengths and weaknesses of these companies and insights into the opportunities and threats facing them.

Key features of this report
Drivers

• Innovations in CRM and DES segments such as MRI compatible pacemakers from Medtronic and Abbott’s Xience drug eluting stent with their positive clinical outcomes support stronger evidence for long-term benefits.
• Emerging markets for DES in Canada, China and parts of Asia furnish opportunities to expand businesses for CV companies.
• Ageing population in industrialized markets such as the US, Europe and Japan are increasing. Moreover, the ICDs and pacemakers in these geographies are expected to have a second-phase of CRM implants.
Resistors

• The safety and efficacy of DES are under scrutiny following numerous clinical studies and more studies are being executed to justify the long-term efficacy of DES intervention.
• Markets for ICDs and pacemakers have reached maturation. ICD sales are growing between 4-5% and pacemakers between 2-3% annually.
• Reduction in reimbursement affects sales and profitability for CV device manufacturers.
Scope of this report

• Learn from the business operation strategies of the premier CV device companies to target future growth markets effectively, avoid their mistakes, and replicate their successes.
• Benchmark your performance against the leading CV device companies.
• Analyze the growth strategies of major players in the CV industry and how their business models are planned for the next 3 to 5 years.
• Compare performances of the top 10 companies in the CV market with respect to acquisitions, new product innovation, geographic expansion, and industry challenges.
• Save time, money and resources on analyzing the performance of leading CV device companies using this report.

Key Market Issues

Pricing pressures due to industry regulations
The CV device industry is highly regulated around the world with stringent guidelines defined by regulatory bodies. The medical device approvals by governing bodies such as the FDA in the US have become very meticulous that CV device manufacturers are launching products outside the US such as Europe and Canada. Since the prices are strictly regulated outside the US, manufacturers will be forced to launch their products in the US for a similar price. In the long run, the pricing pressures would continue to prevail and limit the profitability margins for CV device manufacturers.
Significance of CV device innovation
Markets reaching saturation for major revenue generators in the CV device segment such as ICD, pacemaker and DES. New device innovation will be the only parameter that will assure a company of its competitive edge. Novel technologies that are uncontested would help a company by allowing it to charge premium pricing. Research & development (R&D) initiatives and interdisciplinary knowledge will remain the benchmark for assuring a company’s success and commanding prevalence in the market.
Decline in capital expenditure of hospitals
In the US, hospitals spend a considerable amount of their revenues on capital expenditure to improve their facilities and purchase new medical technology. However, the impact of economic recession since 2008 had forced hospitals to decrease their capital expenditure by almost 6%. This decline will impact the medical devices industry across all sectors in the CV device division. Some segments of the CV device industry such as ICD, pacemakers, heart valves and stents will remain insulated from the economic impact given their non-elective nature of associated procedures. other low budget, high-frequency CV accessories that hospitals purchases on a regular basis will be affected due to decline of capital expenditures.

Key findings from this report

• The top 10 companies had cumulative revenues of $27bn in 2009 and over 95% share of the global CV device market. The top 3 CV device companies dominate more than 60% of this segment’s market share.
• Medtronic was the No. 1 company with CV device revenues of $8.6bn in 2009. The company strategically acquired other franchises to expand its heart valve and catheter product portfolios.
• The growth rates of the implantable cardioverter defibrillator (ICD) and pacemaker sectors in 2009 were 4–5% and 2–3% respectively. The ventricular assist device (VAD) and atrial fibrillation (AF) sectors are poised for double-digit growth rates over the next 2–3 years.
• Business Insights’ analysis revealed that, even during economic recession, the CV device market has remained buoyant, achieving single-digit growth. However, the growth rate in this segment – with the exception of AF solutions and VAD sales – will remain in the mid single digits over the next decade.

Key questions answered

• What was the market value of the global CV device industry in 2009?
• What are the global market values for the major CV device segments?
• What are the key trends in the CV device industry and what are the leading companies’ strategic responses?
• Who are the major players in the global CV device market?
• What are the growth strategies of the leading CV device companies?

Cardiovascular Devices Industry

Table of Contents
About Business Insights 2
Disclaimer 2
Executive summary 11
Industry overview 11
Medtronic 11
Boston Scientific 12
St. Jude Medical 12
Abbott Laboratories 13
Cordis 13
Terumo 13
Edwards Lifesciences 14
Sorin 14
Zoll Medical 15
Thoratec 15
Chapter 1 Introduction 16
What is this report about? 16
Methodology 16
Chapter 2 Industry overview 18
Summary 18
Introduction 18
Market size and growth 19
Key drivers and resistors 20
Drivers of growth 20
Resistors of growth 21
Competitive landscape 21
The top 10 companies 21
Market characteristics 23
CV industry trends 26
Pricing pressures due to industry regulations 26
Significance of CV device innovation 27
Decline in capital expenditure of hospitals 27
Cost containment challenges 27
Chapter 3 Medtronic 28
Summary 28
Company overview 28
Financial performance 28
Financial performance by segments 29
Cardiac rhythm management 29
Cardiovascular 30
Physio-control 30
Marketed products 30
Cardiac rhythm management 30
Cardiovascular 30
Physio-control 31
Recent product approvals 31
Challenges 32
Litigations 32
Growth strategies 32
Research and development 32
Acquisitions 33
Analysis of growth strategies 33
Marketing and sales strategies 36
SWOT analysis - Medtronic 37
Chapter 4 Boston Scientific 38
Summary 38
Company overview 38
Financial performance 38
Marketed products 39
Recently launched products and approvals 40
Challenges 41
Litigations 41
Growth strategies 42
Research and development 42
Analysis of growth strategies 42
SWOT analysis - Boston Scientific 43
Chapter 5 St. Jude Medical 44
Summary 44
Company overview 44
Financial performance 44
Financial performance by segments 45
Marketed products 46
Recent approvals and product launches 46
Growth strategies 47
Research and development 47
Analysis of growth strategies 48
SWOT analysis - St. Jude Medical 50
Chapter 6 Abbott Laboratories 51
Summary 51
Company overview 51
Financial performance 51
Marketed products 52
Recent approvals and product launches 53
Growth strategies 54
Acquisitions and divestments 54
Analysis of growth strategies 54
SWOT analysis - Abbott Laboratories 56
Chapter 7 Cordis 57
Summary 57
Company overview 57
Financial performance 58
Marketed products 59
Recent approvals and product launches 59
Challenges 59
Litigations 59
Growth strategies 60
Research and development 60
Analysis of growth strategies 61
SWOT analysis - Cordis 62
Chapter 8 Terumo 63
Summary 63
Company overview 63
Financial performance 64
Marketed products 65
Recent approvals and product launches 65
Growth strategies 65
Research and development 65
Analysis of growth strategies 66
SWOT analysis - Terumo 68
Chapter 9 Edwards Lifesciences 69
Summary 69
Company overview 69
Financial performance 69
Financial performance by segments 70
Heart valve therapy 70
Cardiac surgery systems 71
Vascular 71
Marketed products 71
Recent approvals and product launches 72
Challenges 73
Litigations 73
Growth strategies 73
Research and development 73
Analysis of growth strategies 74
SWOT analysis - Edwards Lifesciences 75
Chapter 10 Sorin 76
Summary 76
Company overview 76
Financial performance 76
Financial performance by segments 77
Marketed products 78
Recent approvals and product launches 78
Growth strategies 78
Analysis of growth strategies 78
SWOT analysis - Sorin 80
Chapter 11 Zoll Medical 81
Summary 81
Company overview 81
Financial performance 81
Marketed products 82
Recent approvals and product launches 83
Growth strategies 83
Research and development 83
Analysis of growth strategies 84
SWOT analysis - Zoll Medical 85
Chapter 12 Thoratec 86
Summary 86
Company overview 86
Financial performance 86
Marketed products 87
Recent approvals and product launches 88
Growth strategies 88
Research and development 88
Analysis of growth strategies 89
SWOT analysis - Thoratec 90
Chapter 13 Other major players 91
Merit Medical Systems 91
ATS Medical 92
Biotronik 93
Appendix 94
Abbreviations 94
Definitions 96
Table of figures
Figure 1: CV device global market performance, 2007–2009 20
Figure 2: Revenues of top 10 CV companies ($m), 2007-2009 23
Figure 3: Medtronic CV device revenue performance, 2007–09 29
Figure 4: SWOT analysis – Medtronic 37
Figure 5: Boston Scientific CV device revenue performance, 2007–09 39
Figure 6: SWOT analysis – Boston Scientific 43
Figure 7: St. Jude Medical CV device revenue performance, 2007–09 45
Figure 8: SWOT analysis – St. Jude Medical 50
Figure 9: Abbott Laboratories CV device revenue performance, 2007–09 52
Figure 10: SWOT analysis – Abbott Laboratories 56
Figure 11: Cordis CV device revenue performance, 2007–09 58
Figure 12: SWOT analysis – Cordis 62
Figure 13: Terumo CV device revenue performance, 2007–09 64
Figure 14: SWOT analysis – Terumo 68
Figure 15: Edwards Lifesciences CV device revenue performance, 2007–09 70
Figure 16: SWOT analysis – Edwards Lifesciences 75
Figure 17: Sorin CV device revenue performance, 2007–09 77
Figure 18: SWOT analysis – Sorin 80
Figure 19: Zoll Medical CV device revenue performance, 2007–09 82
Figure 20: SWOT analysis – Zoll 85
Figure 21: Thoratec CV device revenue performance, 2007–09 87
Figure 22: SWOT analysis – Thoratec 90
Figure 23: Merit Medical Systems CV device revenue performance, 2007–09 92
Figure 24: ATS Medical CV device revenue performance, 2007–09 93
Table of tables
Table 1: CV device global market performance, 2007–2009 19
Table 2: Revenues of top 10 cardiovascular companies ($m), 2007-2000 22
Table 3: Global market shares of the top 10 CV device companies, 2009 24
Table 4: R&D expenditure of top 3 CV device companies, 2009 24
Table 5: Global market size of prominent CV device segments, 2009 25
Table 6: Medtronic CV device revenue performance, 2007–09 29
Table 7: Medtronic product portfolio 31
Table 8: Boston Scientific CV device revenue performance, 2007–09 39
Table 9: Boston Scientific product portfolio 41
Table 10: St. Jude Medical CV device revenue performance, 2007–09 45
Table 11: St. Jude Medical product portfolio 47
Table 12: Abbott Laboratories CV device revenue performance, 2007–09 52
Table 13: Abbott Laboratories product portfolio 53
Table 14: Cordis CV device revenue performance, 2007–09 58
Table 15: Cordis product portfolio 60
Table 16: Terumo CV device revenue performance, 2007–09 64
Table 17: Terumo product portfolio 65
Table 18: Edwards Lifesciences CV device revenue performance, 2007–09 70
Table 19: Edwards Lifesciences product portfolio 72
Table 20: Sorin CV device revenue performance, 2007–09 77
Table 21: Sorin product portfolio 79
Table 22: Zoll Medical CV device revenue performance, 2007–09 82
Table 23: Zoll Medical product portfolio 83
Table 24: Thoratec CV device revenue performance, 2007–09 87
Table 25: Thoratec product portfolio 88
Table 26: Merit Medical Systems CV device revenue performance, 2007–09 91
Table 27: ATS Medical CV device revenue performance, 2007–09 92