On the heels of a pandemic that redefined society and disrupted the healthcare industry as a whole, advancements in medical technology continue to bring us into the fold of a futuristic world. Among those advancements is robotic assisted joint replacement surgery.
Because they're considered elective surgeries, many patient candidates delayed their scheduled joint replacement procedures as a result of COVID-19. Healthcare company Zimmer Biomet (ZBH 0.78%) intends to be there for them when they return, bringing with it a new -- recently U.S. Food and Drug Administration (FDA)-cleared -- component to its Rosa Robotics platform, specifically designed for partial knee replacement surgeries.
Image Source: Getty Images.
By offering a new partial knee system, Zimmer Biomet provides not only an alternative to total knee replacement, but a system that requires less recovery time for patients and less damage during surgery, because it only impacts a section of the knee that requires repair. It also offers detailed clinical data that can be managed through an Apple Watch, allowing for more informed decisions and optimized care.
What the market holds
Zimmer Biomet currently has a 50% market share in global partial knee replacements. The Rosa Partial Knee system could help add to that market share. Data from the U.K. National Joint Registry shows that nearly 50% of all total knee replacements could be addressed with partial knee replacement surgery.
The global knee replacement market is estimated to grow at a compound annual growth rate of 4.3% for the next six years. If this holds true, the market size, valued at $9.4 billion in 2019, will grow to $12.5 billion by 2027. In the U.S. alone, there are close to 600,000 total knee replacements per year, and that number is expected to increase significantly -- to over 3.5 million annual procedures by 2030.
Looking forward
Unfortunately for Zimmer Biomet, in the first quarter of 2021 the company experienced a sales decline of 5.1% for its knee segment in the Americas, and a 14% decline in the Europe, Middle East, and Africa market. Together, these numbers place the entire knee segment at a 2.3% decline quarter over quarter, down 5.2% year over year. This could have been much worse if not for a substantial 26.9% increase in the Asia Pacific market during the first quarter.
All told, the company doesn't seem phased by the decline in the two geographic market segments. In fact, on the recent quarterly earnings call, President and CEO Bryan Hanson said, "The Q4 performance was fantastic, and that continued right into Q1, both in the U.S. and internationally..." He also said that the product line is very robust, and given Zimmer Biomet's current market share, it should bolster the partial knee segment going forward. The company is expecting full-year 2021 revenue growth in the range of 14% to 17% over 2020, once the number of elective surgeries returns to pre-pandemic levels.
The fact that more patients around the world are suited to a partial knee replacement than a full one gives Zimmer Biomet the potential to cash in on a growing market. With a 50% market share already secured, a new, highly advanced partial knee system just cleared by the FDA is just another reason to love this leading healthcare company for the long term.
