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Small Joints and Extremities Reconstruction

(Arthroplasty) Devices Markets Worldwide

SAMPLE

July 2012

SAMPLE - SMALL JOINTS AND EXTREMITIES RECONSTRUCTION (ARTHROPLASTY)DEVICES MARKETS WORLDWIDE

COPYRIGHT MARKETSTRAT INC. 2012

SECTION 1 - EXECUTIVE SUMMARY

1.1. Key Takeaways

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The world market for small joint and extremity reconstruction/ replacementis estimated around approach close to $1 billion by the end of 2012. Thismarket will grow at a CAGR of about 9 percent over the forecast period.

Largest product segment: The shoulder replacement segment accounts forclose to three quarters of this market; it is also expected to growth at thehighest rate.

Largest geographic segment: The US accounts for about 47 percent of theworld market.

Trends: Small joint and extremities reconstruction is an emerging marketwith a greater growth potential than hip and knee. Increasing life expectancyand patient demand for treatments that offer mobility and improved qualityof life are the predominant trends shaping patient acceptance of thistechnology. Europe has a well-established market; US regulatory hurdleshave slowed market penetration and expansion; Japan and the emergingmarkets of Asia and Latin America have the greatest growth potential.

Acquisition of smaller niche players and privately developed models byleading orthopedic giants is particularly prevalent ankle replacement market.Within this group, competition is intense as companies vie for a sizeablemarket presence.

Primary drivers: Prevalence of disabling joint diseases in aging populationsand young people engaging in sports and fitness; new technology, patientawareness and demand for treatment options that offer an alternative toarthrodesis are important drivers. Skyrocketing rates of co-morbidities suchas diabetes and obesity are adding to the risk of developing degenerativejoint diseases.

Primary restraints: High rate of complications, failure and revision haveplagued the small joint replacement market. Other restraints include a severeshortage of trained surgeons, reimbursement restrictions and regulatoryhurdles.

Leaders: Leaders are well-established orthopedic specialists such as DePuy,Biomet, Tornier and Zimmer. Mid-tier players are Stryker and Smith &Nephew and Wright Medical. All these providers also offer the top brands ofhip and knee replacements. Highly reputed niche players in small jointreplacements are Integra Life Sciences and Small Bone Innovations.

Competition: Leading companies compete fiercely for market share of high-end products. Additionally, in the US and Europe, several small niche playershave gained a strong foothold with innovative technologies.



1.4. Market Data Segmentation



2.5.10. Leading Competitors for Shoulder Replacements - Market SharesTable 1: Global Market Rank for Competitors in Shoulder Replacement Market

Company Market Rank

(2011)

Market Share

(2011)

DePuy, Tornier,

Biomet1

Stryker, Smith &

Nephew, Zimmer 2

Wright Medical,

Mathys, Integra LS 3

2.5.11. Global Competitive Position Map - Shoulder Replacements

Market

Sh

are

Niche Players

Wright Medical

Mathys, Integra

Leaders

DePuy, Tornier,

Biomet, Stryker,

Smith & Nephew,

Zimmer

Participants

Several

Product Width/Depth



2.4.18. Market for Elbow Replacements by Country/Region – Revenues ($Million,

2010-2018)

The world market for elbow reconstruction is estimated at $91.9 million in 2011 growing to

$166 million by 2018 at a CAGR of 8.7 percent. The US is the largest market with the largest

population of elderly patients with arthritis. Highest growth in the next few years is expected

to be the US and in Europe. Elbow reconstruction is a growing market, restrained primarily by

the high revision rate. Technological innovation has been relatively slow in this segment

compared to other small joints.

Table 2: World - Elbow Reconstruction Devices Market - Revenue Forecasts by Country/Region - 2010-2018 ($ Million)

2010 2011 2012 2013 2014 2015 2016 2017 2018 CAGR

USA ($mill) $38.6 $42.5 $46.9 $51.7 $57.1 $63.2 $70.0 $77.6 $86.2

GROWTH (%) 10.2% 10.2% 10.3% 10.5% 10.6% 10.8% 10.9% 11.1% 10.6%

EUROPE ($mill) $16.9 $18.4 $20.0 $21.8 $23.8 $26.0 $28.4 $31.0 $33.9

GROWTH (%) 8.8% 8.9% 8.9% 9.1% 9.2% 9.2% 9.3% 9.3% 9.1%

JAPAN ($mill) $7.7 $8.2 $8.7 $9.4 $10.1 $10.8 $11.7 $12.6 $13.6

GROWTH (%) 6.9% 6.9% 7.2% 7.4% 7.6% 7.7% 7.9% 8.1% 7.5%

ROW ($mill) $21.7 $22.8 $23.9 $25.1 $26.3 $27.7 $29.1 $30.7 $32.3

GROWTH (%) 4.9% 4.9% 5.0% 5.1% 5.1% 5.2% 5.3% 5.3% 5.1%

TOTAL ($ Million) $84.9 $91.9 $99.5 $107.9 $117.3 $127.7 $139.1 $151.8 $166.0

GROWTH (%) 8.2% 8.3% 8.5% 8.7% 8.8% 9.0% 8.6%

Notes:

1. Includes implants for elbow reconstruction

2. ROW includes all countries/regions other than USA, Europe and Japan

3. Data are at the manufacturer level

Source: Marketstrat™



5.5.2. JAPAN - SHOULDER RECONSTRCUTION MARKET - UNIT SALES FORECASTS

(2010 TO 2018)

The Japanese market in unit sales of Shoulder Reconstruction Implants was estimated at 15,764

units in 2011 and expected to grow to 25,845 units at a CAGR of 7.3 percent over the forecast

period.

Table 3 : JAPAN - SHOULDER RECONSTRCUTION MARKET - UNIT SALES FORECASTS (2010 to 2018)

Figure 1 : JAPAN - SHOULDER RECONSTRCUTION MARKET - UNIT SALES FORECASTS (2010 to 2018)

Year UNIT SALES Growth (%)

2010 14,754

2011 15,764 6.8%

2012 16,851 6.9%

2013 18,029 7.0%

2014 19,315 7.1%

2015 20,717 7.3%

2016 22,262 7.5%

2017 23,975 7.7%

2018 25,845 7.8%

CAGR 7.3%

Notes:

1. Includes implants for shoulder reconstruction

2. Data are at the manufacturer level

Source: Marketstrat®

6.2%

6.4%

6.6%

6.8%

7.0%

7.2%

7.4%

7.6%

7.8%

8.0%

0

5,000

10,000

15,000

20,000

25,000

30,000

2010 2011 2012 2013 2014 2015 2016 2017 2018

%G

row

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ITS

UNIT SALES Growth (%)



SECTION 8 – RESEARCH METHODOLOGYThe purpose of this report is to analyze and size the market for small joints and extremitiesreconstruction devices, discuss key players, and identify trends impacting the market for theseproducts. Topics discussed include product definitions, applications, and types of implants,market trends, strategies, competition, and key players. The report provides detailed marketestimates and forecasts for small joints and extremities implants in U.S. dollars and unit salesfor the 2011 to 2018 period. Geographic segments include the US, Europe, Japan and the ROW.

8.1. Target Audience

The target audience for this report includes manufacturers, distributors, service providers,

investment bankers, management consultants, government/regulatory agencies and

industry/trade associations. Target functional users include corporate executives, value chain

managers (in sales, marketing, business development, operations, strategy, and executive

management), analysts and consultants.

8.2. Research

Marketstrat® uses a combination of industry-standard and proprietary methodologies for

research and analysis. Our research projects incorporate a rigorous process encompassing key

milestones such as planning, design, data collection, interpretation, analysis, validation and

reporting. Components of our research methodology include:

Data-collection surveys Data integration – data from multiple sources are integrated prior to mapping to the

Marketstrat® Analytical Framework. Confirmatory primary research (including executive interviews) to validate findings from

initial primary and secondary research. Market analysis is presented in the form of comprehensive, smooth-flowing reports to

include analysis of all market areas, critical business issues, key takeaways, andprioritized actions.

8.3. Data Collection - Primary Research

Extensive primary research is performed, using best practices in survey design, execution and

data interpretation. Vendors, end-users, distributors, prospective customers and others who

are part of a market's ecosystem - are invited to complete web-based surveys. Questionnaires

are customized for the report as well as for the target group within a market. Follow-up primary

research is also performed in the form of detailed phone interviews for validation purposes.



8.4. Data Collection - Secondary Research

As part of secondary research, we review and analyze dozens of information sources and distill

findings into key conclusions, take-aways and recommendations. Sources include industry &

trade publications, published market and investment research reports, white papers, statistical

databases from government and other sources and company web sites. This list includes:

Conference and trade meeting proceedings Industry & Trade Association research Information aggregators In-house decision support databases and models Original information publishers Web research White papers

8.5. Analysis and Interpretation

Our proprietary analytical model used data that has been inspected for high-quality and

reliability. Additional primary and secondary research is conducted to address conflicting

opinions, conclusions and data gaps as required. Quality control and assurance is based on

specific product and segment definitions; outliers are identified and eliminated.

8.6. Data Presentation

To ensure quality and reporting consistency, a specific format is used for data presentation and

report structure, while allowing for creativity and market-specific uniqueness. This consistency

applies to regions covered, tables and charts, company discussions, etc.

8.7. Data Reliability and Limitations

Market data for the US and developed countries is generally more reliable than the rest of the

world. Data for 2012 onwards is based on a set of assumptions. For market regions with sparse

data availability, in-house models are used to quantify the market to fill gaps in primary and

secondary research. Our in-house model is based on 30-40 data points for each country,

including macro-economic data, health statistics, and health system sophistication ratings.

This model has been developed and refined over several years.



8.8. Forecasts

Data estimates and forecasts were based on primary research responses, published

sources, and internal analytical models. Revenue forecasts in this study are in millions of

dollars. These forecasts and growth rates are meant to be directional and should not be

considered as absolute predictions. Base year revenue estimates (2011) are the most

reliable.

8.9. Marketstrat® Analytical Framework

Marketstrat® has developed a comprehensive analytical framework and toolkit to monitor,

analyze and report on the medical devices/healthcare industry. The vision for this based on our

belief that market reports should go up the value chain, from data collection/ reporting through

analysis/insight and actions, and follow-up with a set of recommendations for action. This is a

work-in-progress for us, but currently the following elements constitute the Marketstrat®

Analytical Framework:

Market estimates and forecasts by region, application, channel, sector. Key market drivers, restraints and their correlation to market size and growth Business frameworks for analyzing markets and companies. Examples include: SRCE framework (Stresses, Responses, Competencies, Enablers) Competitive framework (Tier 1, Tier 2, Tier 3, etc) plotted against specific performance

parameters (vendors and customers) Key Market Parameters grid (KeyMAP grid)

Info

rmat

ion Action

Analysis



8.10. Industry Trends

Marketstrat® does an extensive analysis of the broader trends shaping demand for healthcare

services and medical devices. No market analysis can be done in isolation, without looking at

broader trends. These analyses are not always included in the final report, but always factored

into our forecasts and recommendations.

8.11. Company Reviews

Manufacturing companies in this business across the globe have been identified and discussedin brief. Granularity is based on publically available information.



8.12. Project Approach

We bring a project approach to report publishing. While we leverage resources and information

from past projects and internal databases, each report is an independent project on its own,

with the following phases:

Report Design

High-level review of published literature and studies, technology, markets,and company histories; prepare report outline; design and developquestionnaire; prepare sample management plan.

Data Collection

Primary: Questionnaire responses plus telephone surveysSecondary: Systematic and comprehensive review of published informationsources: directories, online business and technical databases, regulatoryfilings, market and broker research reports.

Analysis & Interpretation

Apply MARKETSTRAT® Analytical Framework to collected data; developmarket estimates and forecasts based on proprietary quantitative model;perform competitive analysis; confirmatory primary research to resolve datainconsistencies and for validation.

Report Packaging and Conclusion

Review qualitative and quantitative data parameters, present analysis in theform of a smooth flowing report; perform final review including detailed factcheck, data quality and completeness; develop key conclusions andrecommendations; close project; ongoing monitoring of the market area.

AboutMARKETSTRAT®

Marketstrat assists companies with market,technology, and best practice strategies &

intelligence, through a unique combination ofpublished reports, solutions, and services.

Our goal is to be your source for consistent, easyto understand, actionable, and unbiased research.

For latest information on our products andservices, please visit us at www.marketstrat.com

Report Questions? Please call us at 925.263.4455or email us at [email protected]

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