The Biggest Threat to Medical Device Revenue Growth During the Pandemic

In a new report, Needham & Co.'s Mike Matson says he doesn't expect an economic slowdown to weigh directly on medtech growth, but that doesn't mean the industry will be unaffected by the coronavirus (COVID-19) pandemic. "We think that the biggest threat to medtech revenue growth is a decline in elective procedures," the analyst said, adding that this trend is driven by hospitals cutting back on or stopping elective procedures as they prepare for and focus on COVID-19 patients, and by patients deferring elective procedures due to fears of exposure to the virus. Both factors have already caused large declines in procedures in both China and Italy, and some U.S. cities and states (such as New York City and Massachusetts) have ordered hospitals to stop elective procedures, Matson noted. As MD+DI previously reported, Boston Scientific said in February the virus is expected to lower first-quarter revenue by $10 million to $40 million, and that estimate was based solely on the impact from fewer procedures in China. Also in February, Medtronic acknowledged that slower procedure volume in China would have a negative impact on the company's fiscal fourth-quarter financial results, but CEO Omar Ishrak stopped short of putting any numbers around the issue at that time, given the fluidity of the situation. Needham & Co. conducted what Matson calls a "stress test" consisting of three scenarios (bad, worse, worst) to evaluate the impac...
Source: MDDI - Category: Medical Devices Authors: Tags: Business Source Type: news