Medical device giant Stryker has reported significant changes in its financial performance and strategic business realignments. In the fourth quarter, the company saw a revenue increase of 10.7% year-over-year, reaching $6.4 billion. However, net earnings dropped by 52.2%, landing at $546 million. For the entire year 2024, Stryker's revenue grew by 10.2%, totaling $22.6 billion, but net earnings fell by 5.4% to $2.99 billion. A notable transaction includes the sale of its U.S. spinal implants business to Viscogliosi Brothers, forming VB Spine, which will specialize in neuro-musculoskeletal products. Additionally, Stryker plans to sell its spine implants business in other international markets. The company also announced leadership changes, with Preston Wells replacing Glenn Boehnlein as CFO. Lastly, Stryker provided updates on its acquisition of Inari Medical, targeting the mechanical thrombectomy market.
Redefining Focus: Divestiture and Technological Advancements
Stryker's decision to divest its spinal implants business marks a strategic shift towards optimizing resource allocation. By selling this segment to VB Spine, the company aims to address underperformance issues and align with more promising ventures. This move not only streamlines operations but also positions Stryker to invest in high-growth areas such as interventional spine products. The divestiture includes both U.S. and French spinal product lines, with an impairment charge of $818 million recorded in Q4.
The newly formed VB Spine will inherit Stryker's spinal implant portfolio, including exclusive access to advanced technologies like Mako Spine and Copilot. Mako Spine, recently cleared by the FDA, is set for a full U.S. commercial launch later this year. Copilot enhances surgical precision by automating screw placement during procedures. Kevin Lobo, Stryker's CEO, emphasized that while the company is exiting traditional spinal implants, it remains committed to innovative solutions within the interventional spine sector. This strategic pivot underscores Stryker's dedication to advancing medical technology and improving patient outcomes.
Leadership Transition and Market Expansion
Stryker's leadership transition reflects a commitment to fostering growth and continuity. With Preston Wells stepping into the role of CFO, the company gains a seasoned finance professional with extensive experience in investor relations and financial planning. Wells' promotion from his previous position as CFO of the orthopedics group signals a seamless internal succession plan. Meanwhile, outgoing CFO Glenn Boehnlein, after two decades with Stryker, leaves behind a legacy of talent development and strategic financial stewardship.
Beyond leadership changes, Stryker's acquisition of Inari Medical represents a major step into the rapidly expanding mechanical thrombectomy market. Expected to close in late February, this deal positions Stryker as a leader in treating venous thromboembolism (VTE). Inari's devices are already sold in over 30 markets, and Stryker anticipates significant growth potential, particularly in the U.S., where the market opportunity exceeds $6 billion. Andy Pierce, group president of medical-surgical and neurotechnology, highlighted the global total addressable market of $15 billion, underscoring Stryker's ambition to capitalize on this lucrative sector. The acquisition not only diversifies Stryker's portfolio but also accelerates its international expansion efforts.