
Welcome to MassDevice’s annual audit of the ups, downs and in-betweens of the year that was. For the medical device industry, 2011 was more or less defined by a nagging sense of uncertainty that hung over the world’s med-tech companies like a grey cloud above a summer picnic.
But what did we learn from all the conjecture? In truth, not much. The year ends much as it began, full of questions with no cut and dry answers as we turn the calendar over into the new year.
From sweeping regulatory changes promised, but never delivered, by the FDA, to the industry and regulatory backlash against the impending 2.3% excise tax, the industry didn’t move the chains too far in the past twelve months.
Sure, we worried about the slowing pace of innovation and the growing cost of business, but in the end most of the anxiety produced very few results. That is, unless you were one of the thousands of unfortunate souls who found themselves on the wrong end of a pink slip from all the layoffs the industry faced.
Here’s the close of the top 10 stories of the year for the medical device world. Stay tuned in 2012 for the trends that continue to shape the industry!
Stay tuned for MassDevice’s Top 10 Part II and Part III for more on the biggest news of the year.
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10. Med-tech expands in BRIC markets

Medical device makers spread their tendrils all around the world in 2011, but the markets didn’t grow as fast as hoped and Goldman Sachs analysts predicted static growth in years to come.
Indices created by the bank predicted flat 7.9 percent growth for Brazil, Russia, India and China through 2012. That means companies who have dramatically increased their holdings in BRIC countries may see a smaller upside on their investments.
That could be bad news for the clutch of med-tech titans who have just committed big bucks on the growth of emerging markets to compensate for slowing growth in stalwart markets in the U.S. and western Europe. Growth rates overseas are still more robust than in developed markets, and these are not industry-specific figures, but the surge that drew so many companies into big bets in BRIC countries may be a thing of the past.
That means companies who have dramatically increased their holdings in BRIC countries may see a smaller upside on their investments.
Newly minted Medtronic CEO Omar Ishrak recently put his stamp on the world’s largest medical device maker in August by announcing a big push toward global markets.
British orthopedic giant Smith & Nephew announced an ambitious plan in July to realign the entire company to focus growth and invest $300 million in R&D with the intention of growing the company’s sales in the BRIC countries from $120 million to $500 million within the next five years.
In August Boston Scientific Corp. (NYSE:BSX) announced that a $150 million five-year plan to expand Chinese commercial operations.
9. The SNN rumor mill runs hot

Smith & Nephew (NYSE:SNN) just can’t shake market speculation that it’s on the auction block, with rumors beginning last year and continuing through 2011.
Buyout chatter has been a staple of discussion for Smith & Nephew all year, beginning with a rumored $11 billion takeover by Johnson & Johnson (NYSE:JNJ) in January – the zombie deal that wouldn’t die.
Next came speculation in August that rivals Stryker or Biomet could be in the hunt, prompting a spokesman to tell MassDevice that such talk is "a perennial thing" the firm doesn’t stoop to address.
8. Johnson & Johnson ponies up $21.3B for Synthes

The $21.3 billion union of Synthes and Johnson & Johnson closed in April to little fanfare on Wall Street and in Switzerland. The international med-tech superpower’s stocks ticked down 1% on the news of the buyout, likely due to worries that J&J would have trouble digesting its biggest-ever buyout.
The deal called for Synthes to ditch its Norian subsidiary. Exton, Pa.-based Kensey Nash Corp. (NSDQ:KNSY) later stepped up to the plate and agreed to take a swing at the entire Norian product line for $22 million in cash.
The European Union’s antitrust unit extended a probe into the $21.3 billion bid for Switzerland-based Synthes. The antitrust commission has until March 19, 2012 to sniff out anything fishy in the Synthes bid.
Since then, three former Synthes executives have received prison sentences for their roles in the unauthorized human trials of an experimental bone cement that left three patients dead.
Synthes CEO Michael Orsinger, who will head J&J’s new global orthopedics group after the integration of Synthes into the DePuy division, was not implicated in the case and oversaw the guilty plea that ended a U.S. Dept. of Justice lawsuit.
7. Edwards lands FDA approval for Sapien heart valve

Edwards Lifesciences Corp. (NYSE:EW) became the first company to bring a catheter-based aortic valve to the U.S. market when the Irvine, Calif.-based med-tech maker won FDA pre-market approval for its Sapien transcatheter device in early November.
Edwards filed its PMA application in October 2010, sinking about $40 million into a launch that chairman & CEO Michael Mussallem has said would allow the company to compete in 200 to 400 medical centers in the U.S.
The med-tech maker waited with bated breath from July when an FDA advisory panel recommended approval for the ground-breaking device until the federal watchdog agency granted approval in November.
A rumor that FDA approval could be delayed until April 2012 sent Edwards shares down nearly 5% in October, despite the company’s vehement denial of the rumor.
The clearance marked the first time the FDA has given the green light to a device enabling coronary valve replacement without open-heart surgery.
The device hit some rough water in 2011 when a clinical trial examining the insertion of Sapien heart valve through the ribcage was cut short after several patients experience stroke, kidney failure and death.
Stay tuned for MassDevice’s Top 10 Part II and Part III for more on the biggest news of the year.
Keep reading MassDevice.com in 2012 to make sure you’re up to date on the headlines that continue to shape the medical device industry