By: Sakthi Prasad --
27 April, 2014
Medical devices sector has household names such as Johnson and Johnson, Medtronic, and Boston Scientific among others. These big firms, in turn, partner with Contract Manufacturing Organizations (CMOs) such as Accellent, Great Batch and many others to manufacture devices used to treat ailments in therapeutic areas such as cardio, vascular, neuromodulation and so on.
On the one hand, the healthcare industry has lately been witnessing hectic M&A activity.Â And on the other, even medical devices CMO sector has seen quite a few deals leading to supplier consolidation.
About 30% of top CMO players were involved in either M&A or expansion plans in emerging and developed markets, according to Beroe's medical devices expert Chanderkanth Gautham.
For example, the CMO space saw Accellent merging with Lake Region Medical, and Nordion combing operations with Sterigenics. Likewise there have been quite a few other deals that have resulted in a unique mix of CMO portfolio.
These deals have further bolstered the bargaining power of leading CMOs as top ten players account for 60% of medical device CMO market, as per Gautham's calculation.
The usual buyer reaction to consolidation of supplier base is one of skepticism. However, Gautham opines that such consolidation offers hitherto hidden opportunities that could be made use of by buyers such as J&J and Boston Scientific.
During the webinar scheduled for May 8, Gautham will discuss the impact of M&A activities among CMOs and opportunities it creates for buyers in highly complex and regulated device supply market.
Key Take Away from the Webinar:
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