Johnson & Johnson
JNJ,
said surgical procedure volumes are returning to pre-pandemic levels in many parts of the world, a trend that cheered Wall Street and could bode well for other medical-technology heavyweights like Stryker Corp.
SYK,
and Zimmer Biomet Holdings Inc.
ZBH,
J&J, which reported earnings on Tuesday, said its medical-technology business had a “strong September,” with U.S. sales of hip and knee implants and other surgical devices rising 7.7% to $3.3 billion in the third quarter of the year. That said, global sales were down 2.9%, which executives attributed to a slow August in Europe for the holiday season and pre-pandemic volume levels in China.
“We are seeing procedures recovering,” Ashley McEvoy, J&J’s worldwide chair of its MedTech business, told investors during this week’s earnings call. “In the United States, we started to see surgical procedures tick up, predominantly at the latter part of the quarter.”
Over the course of the pandemic, surgical volumes declined as hospitals postponed or canceled elective procedures during COVID-19 surges and patients held off on medical care. One study published in JAMA Network Open in August found the recovery in surgical volume at Massachusetts General Hospital in Boston was inconsistent and insufficient through much of 2021. But that’s starting to change. Google searches for elective procedures made during the week of Oct. 9 were 108% higher than pre-pandemic levels, Needham analysts said this month.
“There is patient demand that is still yet to be met,” McEvoy said. “And that’s really what we’re experiencing in quarter three, and we still think that will continue into 2023.”
Abbott Laboratories
ABT,
which makes heart pumps and pacemakers, among other cardiac devices, also said this week that cardiovascular procedure volumes in the U.S. were soft in July but strengthened in August and September.
The better-than-expected performance in J&J’s med-tech business in the third quarter has Stifel analysts “feeling cautiously optimistic” about Stryker and Zimmer, both of which make devices used in orthopedic procedures. The companies are set to share quarterly results on Oct. 31 and Nov. 2, respectively.
J&J’s stock is down 3.6% this year, while the S&P 500
SPX,
has declined 22.4%.