For 2012, a few of the biggest med tech companies in the land enjoyed healthy gains in research and development spending.
For the rest, their R&D budgets trended either flat or way down versus 2011. Blame a sluggish market for CRM and other cardiac-related products for that sobering reality, plus industry consolidation, and in some cases, a rethinking of market priorities.
In the case of Johnson & Johnson ($JNJ), the company exited the stent business in 2011 in the face of a stagnant market with numerous players, and by default, ended its clinical development program for the Nevo drug-eluting coronary stent. Executives eliminated more than 1,000 jobs as a result, and J&J has struggled to address sluggish growth in the months following. Not surprisingly, in 2012, med tech research and development spending declined.
Boston Scientific ($BSX) has slashed its R&D spending over the past three years, including 2012, as its overall revenue plunged over several years and the company struggled in the aftermath of its $26 billion acquisition of Guidant back in 2006. But that spending remains about 10% of net annual sales, which is still substantial, and keeps Boston Scientific on our list of top R&D spenders.
On the other hand, Medtronic's ($MDT) estimated R&D spending for 2012 increased at a healthy clip over the previous two years. It's all part of CEO Omar Ishrak's master plan to grow the company, boost its presence in emerging markets and make its R&D process more efficient at the same time.
Their R&D spending levels and those of their top rivals follow, as part of our annual look at the top 10 R&D spending budgets in the med tech space. This year, EvaluateMedTech compiled the list, and before we proceed, there are a couple of things to note.
For one, General Electric ($GE) is excluded from this year's list. EvaluateMedTech left the company out because it only provides one figure for R&D. (GE notes its biggest division is Aviation and that Healthcare is a big contributor to R&D spending.)
Consider, too, that the med tech spending reported for Medtronic, Boston Scientific, St. Jude Medical ($STJ), and Covidien ($COV) reflects research and development spending for the whole company. (Covidien is predominantly, but not entirely, a med tech company.) Johnson & Johnson's R&D data includes medical device and diagnostics spending but not its pharmaceutical and consumer business. Siemens' ($SI) and Philips' ($PHG) numbers cover their healthcare divisions but exclude all other segments. Abbott's ($ABT) R&D numbers include its vascular and diagnostics divisions, but not pharmaceuticals and nutritionals. And Danaher's ($DHR) R&D figures for this report cover dental, life sciences and diagnostics, but not R&D in its other segments.
So where did the top med tech R&D spenders rank? The report follows. As always, tell us what you think, and thanks for reading.
-- Mark Hollmer (email | Twitter)