Japan earthquake disaster can hurt sales of medical device companies

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Japan has had one of the worst natural disasters, with earthquake measuring 8.9 on richer scale, followed by multiple tsunamis.  The destruction, loss of lives and disarray is just horrifying.  On top of that the Fukushima Daiichi Nuclear plant has experienced three blasts due to inadequate cooling.  The economic impact of Japan and on global level is hard to anticipate at this stage, but there is a shake up at the Wall Street.  Medical device companies are also at risk of loosing significant sales in Japan due to the crisis.

Medical device industry is already going through a tough time with giants like Boston Scientific and Medtronic announcing reduction in force.  Japan is a big market of these medical device companies; averaging about 8% of combined sales of nearly a dozen top companies, according to a report by Deutsche Bank.  As per the reports:

  • Edwards Life Sciences, Heart valve maker Edwards, which has an office and distribution center in Japan, generates 17% of its sales in the country.
  • Boston Scientific’s Japan sales at 12% of total company sales, St Jude’s at 11% and Stryker Corp’s at about 10%.
  • Becton Dickinson has an estimated 5% to 6% of its total sales in...



    Japan, has a syringe manufacturing facility in Fukushima, where a nuclear power complex was damaged in last week’s earthquake.
  • Zimmer Holdings Inc at roughly 9% of total company sales, Covidien at 8%, Baxter International at about 7%, Medtronic Incat about 6% and CR Bard Inc at about 5%.

Most of the device companies have reported that their employees are safe and being helped, but the disaster can have significant impact on already struggling industry.

Well, natural disasters are hard to predict and medical device companies will have to bite the bullet.  The companies are big enough to sustain and absorb the dip in revenue due to Japan’s disaster.  Our wishes go out for the people in Japan; hopefully are able to get back on their feet relatively sooner.  Please contribute through NGO’s like Red Cross to help people in Japan.

Via

 

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