Now that we've all had several few weeks to absorb the news of Zimmer's blockbuster acquisition of orthopedic rival Biomet, here are a few initial thoughts on the impact this will have on specific markets in orthopedics.

US Large-Joint Reconstructive Implants:
Shares have previously been relatively static among the top 5 companies, and particularly the top 3 (DePuy, Zimmer, Stryker) for some time. They've also been incredibly close among those upper-tier manufacturers, with Stryker, Zimmer, and DePuy all holding around 20 to 22% of the market, with no clear leader. This acquisition changes everything.

The US large-joint market is incredibly lucrative, but the high growth seen in previous years has slowed down as procedure growth has declined and there has been considerable pressure on pricing. With little growth, manufacturers have been aiming to establish a competitive advantage over each other through appealing to certain niches and making hip and knee replacements easier for surgeons. Stryker was seen to have taken a big risk in acquiring MAKO Surgical, a company that manufactures robots used in knee surgery and had been floundering for the last few years after failing to live up to its potential late last year. Stryker's strategy is typical of large-joint manufacturers: they are seeking to expand their sales through innovation. This would only result in incremental share change, if the plan does work out. Zimmer acquiring Biomet is a great shortcut to moving up in the world, and in a way goes right at Stryker's effort. MAKO specialized in unicondylar knee replacements and had carved out a respectable share. Biomet is the unquestioned leader in that field and with Zimmer now acquiring the company, they stand to benefit a substantial amount in that segment. Biomet also has several interesting products in the hip sphere.

US Trauma Devices:
From the US trauma perspective this is less earth-shattering. DePuy-Synthes is the clear market leader, and Stryker has done quite well as well. Biomet had made significant gains in the last few years, particularly in the plate and screw segment, through their acquisition of DePuy's trauma segment, which was a precondition of the acceptance of the DePuy-Synthes merger. This certainly does make Zimmer more competitive in trauma, though not necessarily more diverse; it gives them a foothold in the long-bone growth stimulator field, but that is a relatively small market, and Biomet is currently being outcompeted by Bioventus.

US Spinal Implants:
Neither Zimmer nor Biomet are very large players in this market, but this acquisition will help them outcompete some of the smaller companies in the market. However, the impact will be much less noticeable relative to other major orthopedic device markets.

One interesting global factor is distribution. There are regions of the world such as Latin America where Biomet has established offices and networks while Zimmer operates through distributors. This acquisition could therefore allow Zimmer to have more of an influence in regions where they previously did not have a large local presence. The future of Zimmer looks promising, and it will be interesting to see how their global distribution process has changed once this is all sorted out.

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