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Needham expects the medtech sector to grow 7% in 2023, compared to 5.7% last year, despite slower growth in the second quarter, helped by double-digit growth in some cardiology categories.
The investment bank noted that medtech growth slowed slightly in the second quarter, growing only 8.3% compared to 8.9% in the first quarter, but still beat forecasts of 5% for the second quarter. And despite forecasting 7% growth for 2023, the bank expects growth to drop to 5.3% in 2024.
Needham said that Etricure (ATRC) and Alcon (ALC) remain his top-ranked companies in this sector, followed by AlphaTech (ATEC), Glaucos (GKOS) and Si-Bone (SIBN).
For 2023, Needham sees electrophysiology achieving the highest growth, with worldwide sales rising 14% to $8.73B, led by Boston Scientific (NYSE:BSX), which is expected to see 27% growth, its followed by Johnson & Johnson (JNJ) at 17th position. , J&J should remain the dominant player with an estimated 49.8% market share, with Abbott (ABT) a distant second with 24.5%.
Despite a 14% jump in 2023, Needham expects electrophysiology market growth to slow to 12% and 11% in 2024 and 2025, respectively.
Worldwide sales of transcatheter aortic valve replacement, or TAVR devices, are expected to grow 10% to $6.74 billion in 2023 on a constant currency basis. Abbott is expected to see the biggest gain with sales up 26%, followed by Boston Scientific in second place with a 16% increase. For market share, Edwards (EW) should retain the No. 1 spot with 57.9%, with Medtronic (MDT) No. 2 with 28.5%.
Needham expects TAVR sales to grow 10% in 2024 and 11% in 2025.
On the other hand, the bank expects the cardiac rhythm management and stent markets to show the lowest growth this year, with sales of CRM devices expected to grow only 3% in 2023. Then growth slows to just 2% in 2024. 1% in 2025 on a constant currency basis.
The worldwide drug-eluting stent sales growth is expected to worsen further. Needham expects device sales to grow only 1% in 2023 on a constant currency basis, followed by a 1% decline in 2024 and zero growth in 2025.
Overall sales in the cardiology market saw an increase of 9.8% during Q2 compared to 8.1% in Q1, despite slower sales of CRM and stent devices. Helped by TAVR and electrophysiology devices, Needham now sees sales growing 7.2% in 2023, compared to last year’s growth of 6.1%.
Meanwhile, sales of contact lens products are slowing. The market registered a growth of 7.8% in Q2, as against 10.7% in Q1. Needham is now forecasting 8.4% growth for 2023, compared to 8.6% in 2022. Growth is seen as slipping to 5.1% in 2024 and 4.7% in 2025.
The orthopedic device market also appears to be a bit volatile. Worldwide sales of devices, which also include artificial joints, rose 7.1% in Q2, helped by a 10% increase in knee replacements, but still less than the 10.3% jump seen in Q1. Needham is now forecast to see sales growth of 7.2% in 2023, compared to 5.3% in 2022.
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Source: seekingalpha.com
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