The spinal implant business, dominated by five giants that command nearly 80 percent of the global market, is seeing increased competition from smaller companies driving the development of innovative new products, according to a market analysis report from Millennium Research Group.
The report, “Global Competitor Insights for Spinal Implants 2009,” predicts that the expected market growth for spinal implants, valued at $5 billion last year, will hit $7.5 billion in 2013. And while five companies — Johnson & Johnson’s (NYSE:JNJ) DePuy Spinal, Medtronic’s (NYSE:MDT) Spinal and Biologics, Stryker Spine (NYSE:SYK), Synthes Spine (OTH:SYST), and Zimmer Spine (NYSE:ZMH) — account for nearly 78 percent of the total market worldwide, they face challenges from smaller upstarts, according to the report.
Companies including SpinalMotion and NuVasive are mounting challenges to the Big Five with alternatives to the non-fusion devices changing the competitive dynamic, according to Kevin Flewwelling, MRG’s orthopedics division manager.
“Some of the soon-to-be-released artificial discs, such as SpinalMotion’s Kineflex and Kineflex-C as well as Cervitech/NuVasive’s PCM [Eds. note: NuVasive acquired Cervitech earlier this year for $47 million in cash up front and $33 million once the PCM wins clearance from the Food & Drug Administration], possess innovative features that improve upon devices currently on the market,” Flewwelling said. “If a new device from a smaller competitor enters the market and is well-received by surgeons, it could result in very interesting competitive dynamics, possibly leading to a flurry of merger and acquisition activity.”
Flewelling told MassDevice that the SpinalMotion and NuVasive devices could cut into the Big Five’s market share because their unique features offer attractive alternatives to orthopedic surgeons.
“For the PCM, it has a broader radius of curvature than some of the other devices currently on the market, and that’s going to help with its method of fixation. When the surgeons implant the device, they can spare more of the bone and tissue. That’s been highly regarded by surgeons,” he told us. “With the Kineflex it’s a little bit different. The materials it’s made of are a little different, it’s a metal-on-metal design, which is expected to lead to less wear. And the Kineflex-C has a unique advantage. It’s also metal-on-metal, but it also holds a sliding ball in its core to more accurately mimic the natural motion of the disc it’s designed to replace, for a more physiologically natural implant.”