Becker's Spine Review

25 DEVICES & IMPLANTS Johnson & Johnson's Q2 knee sales tumble 50% in the US — 6 earnings insights By Angie Stewart J ohnson & Johnson's second-quarter orthopedic sales in the U.S. were down 34.7 percent year over year, at $869 million. Six insights on the company's sec- ond-quarter earnings: 1. With $583 million in orthopedic sales abroad, Johnson & Johnson reported total worldwide orthopedic sales rev- enue of $1.45 billion. This represented a 34.7 percent decrease from the same period in 2019. 2. The company's hip offerings gener- ated $137 million in U.S. sales and $88 million in international sales, represent- ing year-over-year decreases of 36.5 percent and 39.8 percent, respectively. 3. Johnson & Johnson's knee business generated $108 million in U.S. sales, down 50.5 percent from $218 million in the second quarter of 2019. Internation- al knee sales had an even bigger fall, from $153 million in the second quarter of 2019 to $66 million this most recent quarter. 4. For its "spine, sports and other" busi- ness, Johnson & Johnson reported $270 million in U.S. sales and $230 million in international sales, representing respec- tive year-over-year decreases of 45 per- cent and 29.9 percent. 5. Johnson & Johnson's trauma business had the lowest year-over-year decline of any line, when compared on world- wide sales. Trauma worldwide sales were down 17.8 percent to $553 mil- lion. U.S. sales were down 12.9 percent to $354 million, and international sales decreased 25.2 percent to $198 million. 6. Worldwide medical device sales of $4.3 billion represented a 33.9 percent decline from the second quarter of 2019. n How the pandemic has changed Stryker's operations, culture: 8 observations from CEO Kevin Lobo By Laura Dyrda S tryker CEO Kevin Lobo said the pandemic accelerated innovation with virtual conferencing and connections during e Constellation Forum on Aug. 6, and he plans to lean into these trends as well as the company's social responsibility in the future. e Constellation Forum is hosted by New Hyde Park, N.Y.-based Northwell Health and included speakers from across the healthcare spectrum. Here are eight take- aways from the interview with Mr. Lobo. 1. During the pandemic, Mr. Lobo said Stryker's executives had to take a more em- pathetic approach to leadership and spend more time listening and communicating than in the past. He sent out the constant reminder that there is a light at the end of the tunnel during these challenging times. 2. e company conducted global calls every two weeks when the pandemic began; the calls now occur once per month and feature hospitals, administrators and sur- geons sharing their experiences from the front lines. 3. Although the pandemic meant sales were down 24 percent, the company was also able to innovate. Stryker launched four products that it wouldn't otherwise have de- veloped during the pandemic, including an emergency relief bed, which it was able to develop in 10 days. e bed received the FDA's emergency use authorization. 4. Prior to the pandemic, Mr. Lobo joined other business leaders to sign a new pro- posed definition of corporations, which considers broader stakeholders than just shareholders under the corporation's responsibility. e company has re-focused ef- forts to take a stance on social issues and more actively engage employees. 5. Millennials want to know where companies stand on moral issues, especially in light of the racial injustices in the U.S. Mr. Lobo said Stryker had "days of under- standing" where people came together to talk about racial issues and gaps within the company. He said the conversations were enlightening for leadership and Mr. Lobo foresees employees wanting to know more about racial diversity statistics within the workplace in the future. 6. Stryker has a diversity and inclusion program and training built around the idea of accepting the bias in a person's first thought, but then stepping back and taking responsibility for the second thought and first action to address a situation. e pro- cess was designed as a grassroots effort in one branch of the company and has been popular as it scaled through the rest of the company. 7. Stryker transitioned a large portion of its workforce remote during the pandem- ic and conducted a tremendous amount of training virtually. Mr. Lobo sees virtual training continuing to be part of the company's strategy moving forward. 8. Mr. Lobo said meetings over video calls equalized participation and allowed for all voices to be heard. He observed that some people who had been quiet during in-person meetings were more outspoken on video and he plans to have more video meetings in the future. e company also has flexible work arrangements that will continue for the foreseeable future. n

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