Brittle, broken, battered bones cease to be a problem with Synthes around. The company makes devices, instruments, and implants used for the surgical treatment of bone disease or trauma. It operates through five product groups: Trauma, Spine, Cranio-Maxillofacial, Biomaterials, and (shudder)Power Tools. From the skull to the foot, the company develops, produces, and markets products for the surgical fixation, correction, and regeneration of the skeleton and related soft tissues. It works closely with the AO Foundation, a not-for-profit research organization specializing in osteosynthesis. Synthes was acquired by Johnson & Johnson in 2012 and became part of J&J's DePuy Synthes division.
The $20 billion deal provides Synthes access to the resources of one of the largest health care companies in the world, while J&J further expands its orthopedic holdings and diversifies its operations even more. The company's operations are being integrated with J&J's DePuy business to create the new DePuy Synthes Companies division. The combined organization stands to better serve clinicians and patients on a global basis, as well as bring new orthopedic and neurologic products to market and bolster the company's competitive strength in developing markets.
Of course, it was pretty easy to see why Synthes was an attractive acquisition target; the company has increased its revenues from less than a billion a year in 2001 to nearly $4 billion in 2010. It has also grown geographically, and now has more than 40 subsidiaries and 50 distributors worldwide.
Synthes' success could be due to its specialized development programs, which involve consulting with surgeons worldwide who work with the company's team of product development scientists, engineers, and product managers to identify clinical needs and develop products to address those needs. Synthes also conducts courses to train surgeons in the use of its products, hoping those physicians will then lobby hospitals to include those products in their supply budgets. In addition, a cornerstone of Synthes' growth strategy has been expanding its global sales force into emerging markets. North America has traditionally been Synthes' largest market, followed by Europe, Asia/Pacific, and the rest of the world.
One market in which the company has expanded is its geriatric fracture program, which provides an interdisciplinary approach to the care of elderly patients who are susceptible to or have experienced fractures related to fragility of the bones. The company sees a growing market in this area as Baby Boomers begin to experience bone problems related to aging that include loss of bone density, increasing the risk of fractures. As a greater percentage of the US population reaches retirement age, Synthes expects the number of these fractures to increase substantially, creating opportunities for new products.
Another area of growth is the foot and ankle region. Synthes has seen its competitors gain market share away from it by introducing new products to meet the needs of foot and ankle surgeons in recent years. In response it introduced the Variable Angle LCP Forefoot/Midfoot System in 2010 to take back some market share in an area in which it previously has not been very active.
Other product launches in 2010 include the MATRIX system, a screw fixation system used during spinal procedures, and the MatrixORTHOGNATHIC Plating System, a reconstruction system used to correct dental misalignments.
Along with launching newly-developed products, Synthes has also made an acquisition here and there. To build up its selection of surgical power tools, in 2010 the company acquired US-based The Anspach Effort. Synthes then combined Anspach's product line and facilities with its existing power tool business.
The Synthes USA division had some trouble in 2009 when the unit and several of its executives were indicted and later fined on federal charges. The US government's allegations accused the firm of conducting an illegal clinical trial that used a Norian-brand bone cement product on spinal patients without FDA approval. Following that incident Synthes started talks to sell the Norian unit and eventually reached a deal with Kensey Nash in 2011. Under terms of the $22 million deal, Kensey Nash will manufacture the Norian products, while Synthes will hold their exclusive worldwide distribution rights. – less