Below the Knee - February 2025 Edition

Welcome to the February edition of Below The Knee. January was packed with financial reports, market shifts, and strategic moves that are setting the stage for the year ahead in wound care, foot & ankle, and limb salvage. We’re breaking down the key earnings reports, highlighting trends shaping the industry, and diving into the biggest commercial moves.

Whether you’re tracking public company performance or scouting for the next big innovation, this edition has you covered.

💲Finance Highlights

Strong Q4 Performances & Market Shifts

The medtech sector, particularly in wound care, limb salvage, and foot & ankle, showed strong revenue growth in Q4 and full-year 2024, with multiple companies posting mid-to-high single-digit gains. Standouts like Tandem Diabetes (+44%), Organogenesis (+27%), and Enovis (+23%) demonstrated the impact of product innovation, global expansion, and acquisition-driven growth. M&A activity remained a major driver, with Enovis' acquisition of Lima and Globus Medical's NuVasive merger fueling performance. Meanwhile, Smith+Nephew’s aggressive pipeline of 50+ product launches, MiMedx’s HELIOGEN launch, and Tandem’s Control-IQ+ insulin pump all contributed to market momentum.

• Integra LifeSciences posted $442.6M in Q4 sales (+11.5%) and $1.6B for the year (+4.5%), with wound reconstruction up 8% despite ongoing production challenges with Integra Skin. Growth was driven by DuraSorb, MicroMatrix, Cytal, and AmnioExcel.

• Enovis saw Q4 revenue jump 23% to $561M and full-year sales hit $2.1B (+23%), fueled by the Lima acquisition and Recon sales. CEO Matt Trerotola announced his planned retirement.

• Smith+Nephew delivered $1.6B in Q4 revenue (+8.3%) and $5.8B for 2024 (+5.3%), powered by growth in Sports Medicine (+5.5%) and Wound Care (+4.7%), alongside a pipeline of nearly 50 new products over the past three years.

• Tandem Diabetes Care surged with Q4 sales of $283M (+44%) and full-year revenue of $940.2M (+26%), bolstered by the FDA clearance of its Control-IQ+ insulin pump.

• MiMedx reported $93M in Q4 revenue (+7%) and $349M for 2024 (+9%), driven by the HELIOGEN launch, international expansion (notably Japan), and anticipated 2025 regulatory shifts.

• Organogenesis posted $126.7M in Q4 revenue (+27%) and $482M for the year, with Advanced Wound Care growing 12%. EBITDA soared 143% to $18.2M, and EPS beat targets at $0.04, reflecting portfolio expansion and operational improvements.

• Solventum (formerly part of 3M) reported $2.074B in Q4 sales (+1.9%), with EPS at $1.41, exceeding expectations due to strength in wound care and surgical sterilization.

• Treace Medical Concepts posted $68.7M in Q4 revenue (+10%) and $209.4M for the year (+12%), with 280 new surgeons adopting its bunion correction solutions and multiple product launches fueling growth.

• Globus Medical reported $657.3M in Q4 revenue (+7%) and $2.519B for 2024 (+6%), with NuVasive integration driving sales and an upcoming acquisition on the horizon for 2025.

• Covalon Technologies saw 75% revenue growth in Q1 Fiscal 2025, driven by a 73% surge in US Medical Consumables, with adjusted EBITDA climbing to $7.6M, a sharp turnaround from last year’s losses.

While growth was strong, companies also faced challenges in operational efficiency, regulatory shifts, and supply chain constraints. Smith+Nephew and Organogenesis improved profitability through restructuring, while Covalon turned losses into profitability with 75% revenue growth. Integra LifeSciences continued to struggle with production issues in Integra Skin, highlighting ongoing supply chain pressures. Looking ahead, anticipated 2025 regulatory changes and evolving reimbursement landscapes will test how well companies adapt, overall the market remains on a solid growth trajectory, fueled by innovation and strategic expansion.

Continuing increase in M&A Activity throughout 2025

• Globus Medical Acquires Nevro: Globus Medical expanded its reach into neuromodulation and chronic pain management by acquiring Nevro for approximately $250 million. This move broadens their musculoskeletal portfolio.

• Zimmer Biomet Acquires Paragon 28: Zimmer Biomet's acquisition of Paragon 28 for $1 billion significantly strengthens its position in the foot and ankle market.

• Stryker Acquisitions and Divestitures: Stryker acquired Inari Medical for $4.9 billion and is selling its spine business to Viscogliosi Bros., LLC, reflecting a strategic portfolio realignment.

• Boston Scientific's Strategic Acquisitions: Boston Scientific has been particularly active, acquiring Bolt Medical, Axonics, Inc. for $3.7 billion and Cortex. These acquisitions will expand their offerings in various medical sectors.

• Henry Schein Acquires Acentus: This acquisition is also part of the general M&A activity in the MedTech space.

• Teleflex Split and Acquisition: Teleflex plans to split into two independent companies and will acquire cardiovascular assets from BIOTRONIK, including devices for heart and limb treatments.

• Tiger BioSciences LLC Acquires NOVO Health Services Encore Surgical HealPACK Solutions: This acquisition expands Tiger Wound Care's home-based wound care solutions.

• Teladoc Health acquires Catapult Health: Teladoc Health is acquiring Catapult Health, a Dallas-based provider of virtual preventive care services, in an all-cash transaction for $65M.

• Johnson & Johnson stroke care sale. Johnson & Johnson is planning to sell its stroke care business, CERENOVUS, for over $1 billion.

🏛️Regulatory & Reimbursement Shifts: Navigating the Changing Landscape

Regulatory and reimbursement dynamics are reshaping the wound care and orthopedic markets, with compliance, coverage changes, and pricing pressures taking center stage.

• DOJ Cracks Down on Fraud – A high-profile fraud case sent shockwaves through the industry, reinforcing heightened scrutiny on reimbursement claims for advanced wound care and DME. With audits and investigations ramping up, compliance isn’t just a checkbox—it’s a business imperative.

• Regulatory Momentum Continues – The FDA granted 510(k) clearance to multiple wound healing and orthobiologic products, signaling sustained innovation and market expansion. However, companies must balance speed to market with evolving regulatory expectations.

• Reimbursement Disruptions – CMS’ latest payment determinations for skin substitutes are forcing companies to rethink pricing and market access strategies. While some are facing reimbursement headwinds, others see opportunities in cost-effective, value-based models. Meanwhile, MACs have tightened coverage criteria for lower extremity procedures, impacting access to advanced therapies in diabetic foot and trauma care.

Companies that successfully navigate these shifts will differentiate through data-driven value propositions, proactive payer engagement, and compliance-first strategies—all essential for staying ahead in a rapidly evolving landscape.

💡Innovation Spotlight - Recent developments in wound care and foot & ankle tech include:

• AI in Wound Care: Spectral AI's DeepView System, which uses AI for wound healing assessment, completed its U.S. Burn Pivotal Study, showing strong performance compared to physician assessments. The AI system has received FDA Breakthrough Designation. The EU AI act will create regulatory hurdles for AI based MedTech products.

• Advanced Sensors: Researchers from Penn State University and China’s Hebei University of Technology have developed a new flexible sensor capable of accurately measuring temperature and physical strain, with potential applications in wound healing monitoring.

• Diabetes Technology: Beta Bionics went public after raising $204M, with its insulin pump receiving FDA clearance in 2023. Oramed Pharmaceuticals Inc. entered into agreements to spin off its oral protein delivery technology into a joint venture with Hefei Tianhui Incubator of Technologies Co., Ltd. The new company is focused on development and commercialization of oral insulin. Tandem Diabetes Care received FDA clearance on the Control-IQ+ insulin pump.

• Skin Substitutes and Wound Healing: PolarityBio Receives U.S. FDA Breakthrough Therapy Designation for SkinTE based on key positive data from the Phase II study in Wagner1 DFUs. Sonoma Pharmaceuticals has entered into a Master Supply Agreement with WELLSPRING PHARMACEUTICAL SERVICES LIMITED to distribute Microcyn technology-based products throughout the US.

Looking Ahead the first quarter is shaping up to be pivotal for market dynamics, with companies adapting to shifting reimbursement policies, M&A activity ramping up, and the continued evolution of AI-driven medtech solutions. Expect further shakeups in the regulatory environment and increased commercialization efforts from emerging players.

What are you watching in 2025 - drop a comment or message me, would love to hear your insights!

-Scott