Much of medtech is considered relatively recession-proof, but it's not social distancing-proof.
Sales in the last weeks of March, revealed in recent weeks' first-quarter earnings reports, previewed the dramatic trajectory of drops in routine diagnostic testing and a mounting backlog of elective procedures across medical specialties. Many companies also shared stats from early April to give investors a slightly clearer picture of how the crisis is playing out across business, amidst the most uncertain circumstances.
| Select companies heavily reliant on elective procedures or testing | Commentary on late March or early April impact |
|---|---|
| BD | A negative $240 million impact during the month of April, with surgery revenues falling between 50% and 70% |
| Boston Scientific | April revenues declined an estimated 50% |
| Intuitive Surgical | U.S. procedures using da Vinci robots declined 65% in the second half of March compared to earlier in the quarter |
| LabCorp | Testing demand was down 50% to 55% at the end of the first quarter |
| Medtronic | Revenues were down roughly 60% during the middle weeks of April in the U.S. market |
| Quest Diagnostics | As of the third week of April, testing volume declines had "stabilized in the 50% to 60% range" |
| Smith & Nephew | April sales fell 47% |
| Stryker | April sales fell between 35% and 40% |
With the U.S. the biggest single market for many major device makers, a refrain emerged that second quarter financial results will likely reflect the brunt of shutdowns, with recovery expected to improve in the third and fourth quarters.
Still, the rate at which procedures are allowed to return will vary by state and county. And even as delayed care can resume, whether consumers still have employer-provided health insurance, let alone feel safe returning to healthcare settings, are out of companies' control. Those variables are among the reasons major medtechs have nearly universally pulled prior financial guidance for 2020.
It's not all bad; some companies find themselves advantageously positioned to meet patients' and healthcare systems' unique pandemic-era needs.
ResMed and Philips, for example, are riding a wave of demand for respiratory technologies and remote patient monitoring tools, while Qiagen, Roche and Thermo Fisher are enjoying a revenue boost from coronavirus diagnostic and antibody testing. Exact Sciences has seen a decline in prescriptions for at-home colorectal cancer screening product Cologuard, yet is still taking share as colonoscopies have been at a standstill.
Earnings season is not quite over (Zimmer Biomet and Medtronic are among the major medtechs left to report) but below is a collection of MedTech Dive's coverage of first quarter results to date.
