These are tense times for the more than 13,000 employees of American medical device and diagnostic companies in Japan and their employers back stateside, as the country tries to recover from a devastating 8.9 magnitude earthquake and accompanying tsunami.
The impact of the quake will be felt far beyond the shores of the Pacific Ocean and into the heart of the medical device industry.
Japan, the world’s third largest economy, is also a critical player in the global medical device market, ranking just behind the United States and European Union markets in terms of market size at just under $25 billion, about half of the total Asia Pacific (APAC) medical devices market, which is pinned at $55 billion, according to Pacific Bridge Medical, a Bethesda, Md.-based Asian regulatory firm.
In addition, several major medical device firms have established beachheads in the Land of the Rising Sun.
Natick, Mass.-based medical device maker Boston Scientific Corp. (NYSE:BSX) derives about 13 percent of its total global revenues from its business in Japan and has its Asian Pacific headquarters in Tokyo, according to regulatory filings. In 2010, the company reported just shy of $1 billion in sales for its Japanese unit.
Boston Scientific spokesman Erik Kopp told MassDevice in an email that “all its employees have been accounted for in affected areas, and no employees were killed or injured by the earthquake or its aftermath effects.”
“The Company is currently conducting an assessment to determine if the earthquake will have an impact on its service and supply operations. The Company is committed to providing services to customers during this difficult time,” he added in a written statement.
Other companies with big presences in Japan include Abbott Laboratories (NYSE:ABT), which reported more than $2 billion in sales in Japan during 2010, and has grown its there business by 60 percent in the past three years, according to regulatory filings.
St. Jude Medical Inc. (NYSE:STJ), Medtronic Inc. (NYSE:MDT) , Covidien plc (NYSE:COV) and Stryker Corp. (NYSE: SYK ) also have significant interests in the country along with many other major medical device companies.
On Wall Street, the quake’s effects haven’t hurt investor confidence in the medical device space, shares of iShares Dow Jones US Medical Device index have remained relatively close to yesterday’s closing price of $63.47. The index holds deep positions in Medtronic, Covidien, Stryker and St. Jude.
The devastating earthquake, the largest in Japan’s recorded history, struck the nation’s eastern coast on Friday afternoon, causing a 23-foot tsunami. Officials fear the death toll could be in the thousands.
No American’s have been reported among the missing or dead, according to news reports.
