Stryker (NYSE:SYK) CEO Kevin Lobo said today that the company is preparing to restart “a number” of idled production lines next month as it climbs out the crater created by COVID-19.
In an interview on the DeviceTalks Weekly Podcast, Lobo said the company is rebounding from its low point in April, when its sales fell almost 40%.
“May was better than April. And June is tracking to be better than May,” Lobo said. “As the economies open up, business is starting to return, which is very exciting.”
Just over 40% of Stryker’s $14.9 billion in revenue comes from sales of hip, knee, spine and other related procedures, according to its 2019 annual report. In the deepest days of the pandemic, these elective procedures were cancelled so hospitals could commit resources to treating coronavirus patients while also limiting the risk of exposing non-Covid-19 patients to the virus.
“We have quite a bit of exposure to elective procedures or what I like to say, deferrable procedures, because people will still need their hip or knee replacement or their spinal procedure, but it’s been delayed,” Lobo said.
Hospitals are reopening to patients in need of procedures that aren’t deemed life-threatening. Many are learning how to reduce the risk of patients spreading the virus while also building up their own critical reserves of personal protective equipment. Leaders from the Mayo Clinic spoke to this push in a recent DeviceTalks Tuesday webinar.
Medtech companies also will learn to adapt. Lobo said Stryker employees will return to work with a better understanding of tools that will help them work more efficiently.
“We’ve learned new skills,” Lobo said. “We didn’t previously do physician training or even company meetings in a virtual format (before the lockdown). I think this will be part of our future offense. We’re feeling very optimistic about the future.”
Lobo acknowledged that Stryker has some ground to regain, but he believes the Kalamazoo, Mich.-based company entered this spring from a position of strength.
“We had grown organically for seven consecutive years,” he said. “We had a great start of the year. Obviously, this has derailed our growth momentum for a little while. But we think we’ll be able to bounce back and have a future of growth ahead of us.”