Mid-sized medtechs hit hardest by pandemic, though sector seen resilient: poll

Dive Brief:

A 2021 survey of medtech professionals has found manufacturers are performing at similar levels to before the pandemic. Emergo by UL, which polled more than 1,600 people, also found 56% of respondents said sales fell as a result of the pandemic.
Bigger firms with more than 1,000 workers fared best during the pandemic and mid-sized firms with 250 to 1,000 workers were more likely to see significant losses, the poll found.
Despite the disruption, the challenges faced by respondents echo the concerns raised in previous years, with the changing regulatory environment once again the top issue.

Dive Insight:

Emergo primarily polled people working in regulatory, quality and clinical roles at manufacturers of medical devices. Seventeen percent of responses came from companies that manufacture in vitro diagnostics.

Across that population, Emergo said the responses "indicate stable growth rates compared to 2020." The latest survey found 30% of respondents expect sales to increase by 1% to 5% this year and 28% foresee a 6% to 10% rise. In the 2020 survey, 32% of respondents foresaw a 1% to 5% rise and 34% predicted a 6% to 10% increase.

The timing of the 2020 and 2021 surveys complicates the interpretation of the data. When Emergo polled the industry in January 2020, respondents were comparing their outlook to the pre-pandemic 2019 and unlikely to have foreseen the magnitude of the disruption awaiting them over the next 12 months.

Emergo's next survey took place in January and February 2021. Respondents then were comparing their outlook for growth to the pandemic-hit 2020. As such, the fact that 32% of people expect their sales to increase by at least 11%, compared to 26% of respondents to the 2020 survey, may say more about the difficulties they faced during the pandemic than their underlying business.

Equally, the slight rise in the proportion of companies that expect sales to fall in 2021 may reflect the fact that some companies, particularly diagnostics businesses, experienced strong tailwinds related to the pandemic that will make it hard to top the revenues generated in 2020.

The survey suggests the subset of smaller companies with 10 to 49 employees will be the most volatile, with 26% forecasting a 15% increase in sales but 13% expecting revenues to fall. In contrast, 11% of respondents at companies with more than 1,000 employees expect sales to rise 15% and 7% predict revenues will fall. Small companies typically lack the diversified portfolios that can soften the blow from disruptions such as the pandemic.

Respondents remain most bullish on the prospects of growth in Asia and are broadly more optimistic about the industry than they were at the start of 2020. In the latest poll, 26% of respondents said they are very positive about the industry, up from 20% a year ago.

The overarching challenges companies face are broadly unchanged. The changing regulatory environment is still the top concern, although the proportion of people identifying it as a challenge fell from 74% last year to 65% in the latest survey. The proportion of respondents naming funding as a challenge rose from to 29% to 32%.