Abstract
THE RAPID PROGRESS OF THE NPWT SECTOR AND THE EXIT OF JOHNSON & JOHNSON AND BRISTOL-MYERS SQUIBB HAS CHANGED THIS SECTOR FUNDAMENTALLY. WHO ARE THE PLAYERS AND TECHNOLOGIES THAT ARE BENEFITING FROM THESE DEVELOPMENTS?
Key Areas Addressed:
- Growth forecasts to 2013 for the major moist wound care, NPWT and
biological wound care sectors and regions
- Market share data by company for major product sectors
- An examination of market and product growth drivers
- Extensive review of product ranges within each wound care sector
- Competitor reviews of 115 leading and developing companies
While the advanced wound care market has generally seen double-digit growth
over the past five years, the growth rate slowed in 2008 and this trend is
expected to continue in 2009 with a global valuation of US$4.9 billion in 2008.
The number of patients requiring treatments for chronic and challenging wounds
has and will continue to rise. However, growth in terms of sales volumes is
being affected by the higher number of companies entering this market, which
is increasing competition and bringing down selling prices. In addition, the
market is likely to see pressures on reimbursement levels as governments seek
to rein in healthcare expenditure during the current economic downturn.
While several leading companies have added to their advanced wound care
portfolios, two leading healthcare companies have exited this market: Johnson
& Johnson (via Ethicon) and Bristol-Myers Squibb (via ConvaTec). For both
companies, advanced wound care was not a key part of their overall operations
and the move may have been timely, as market growth is slowing in their sector
of interest and neither company had a presence in the rapidly-growing field of
NPWT.
Focus on the key issues and trends
Private equity adds a new dimension to the market
Other manufacturers did not benefit from the decision of J&J and BMS to exit
the market; both ConvaTec and the Johnson & Johnson Professional Wound Care
business were purchased by private equity firms.
The Johnson & Johnson Professional Wound Care business became Systagenix Wound
Management in December 2008 following One Equity Partners' acquisition of the
business. ConvaTec became a separate entity from Bristol-Myers Squibb in
August 2008 following its sale to new owners, Nordic Capital and Avista
Capital Partners, in a deal valued at US$4.1 billion. A month after the
transition, in September 2008, ConvaTec acquired Unomedical, a Danish
manufacturer of hospital products and infusion devices, from Nordic Capital
Fund IV. The combined company, which retains the ConvaTec name, has
approximately 8,000 employees and annual revenue in the region of US$1.6
billion.
Negative Pressure Wound technology continues to take market share as companies position themselves for growth
Expected to exceed US$2 billion by 2013, NPWT technology is continuing to gain
ground and is taking market share from moist wound care products. Many of the
leaders in other areas of advanced wound care have seen their market share
decline.
This is expected to continue as NPWT is expanded into currently
under-penetrated geographic regions and for use in new indications and
healthcare environments. In response, several of the traditional wound care
market leaders have entered or plan to enter the NPWT market. Notably, Smith &
Nephew (S&N) acquired BlueSky Medical in 2007, Getinge launched a NPWT system
in 2008 following its acquisition of Huntleigh Technology and Molnlycke is
also looking into this area. In addition, ConvaTec has recently gained a
presence in the NPWT market through an exclusive global agreement for
Boehringer Technologies' Engenex NPWT system.
While there is clearly increased competition for NPWT, there are certain
barriers to developing a presence in this market. The market model involves
the rental of NPWT devices to healthcare providers and the sale of
disposables. This model requires companies to have the capabilities to deliver
and collect the rental products, either themselves or through partners, which
could be a major hindrance to companies wanting to enter the NPWT market.
Regional Sales: A tale of two technologies
The advanced wound care market is currently dominated by the European region,
which accounted for 41% of the total sales volumes in the market in 2008. In
addition, the US represented 39% of the market and the rest of the world
20.5%. However, the adoption of different types of advanced wound care
technologies differs between these regions, with Europe and the rest of the
world more broadly adopting moist wound care dressings and the US being the
largest market for NPWT. Currently, Espicom estimates that around 70% of the
NPWT market is in the US and only 30% is in the international market,
providing continued growth potential for NPWT outside the US. However, for
moist wound care, over 50% of the market is in Europe and only around 25% in
the US.
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