Medical device companies saw procedures bounce back at the end of the first quarter after a surge of COVID-19 cases at the start of the 2022.
Multiple companies, including GE Healthcare, Intuitive Surgical and Zimmer Biomet, reported a pattern of declining procedure volumes in January — curbed by rising COVID-19 cases — before seeing a recovery in February and March.
Still, medical device firms also flagged several challenges ahead, including shortages of semiconductors and other equipment, rising transportation costs and continued hospital staffing woes
Starting off the earnings season, Johnson & Johnson’s CFO Joseph Wolk said the medtech business experienced a “faster recovery than we anticipated,” with the company noting that diagnostic volumes and surgical volumes were trending up. That set the tone for other procedure-heavy companies to follow, including Edwards Lifesciences, which posted an 11% gain in sales of its transcatheter aortic valve replacement devices.
Medtech companies noted challenges stemming from continued hospital staffing shortages, which aren’t expected to abate any time soon. For instance, installations of large equipment such as surgical robots slowed in the first quarter, a trend that was called out by Intuitive, Stryker and Globus Medical.
The companies attributed this to hospital staffing shortages, as well as a lack of electronic components. Globus CFO Keith Pfeil said the slowdown at the beginning of the year was dye to “many hospitals limiting access and shifting their focus to managing through the uptick in COVID cases while also managing staffing shortages.” He did note that deal activity and discussions ramped up later in March.
Diagnostics firms also posted higher sales of COVID-19 tests after the omicron-driven surge at the beginning of the year. Both Roche and Abbott Laboratories reported double-digit growth over the prior year in diagnostic sales in the quarter, with the latter raising its sales forecast for the end of the year.
However, the two companies expect a decline in test sales later this year.
