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How China’s Black Monday Hit the Top 10 Medtech Firms

Posted in Medical Device Business by Chris Newmarker… on August 24, 2015

A handful of medical device companies that do a large amount of business overseas were hit especially hard by Wall Street’s worst day in four years.

Chris Newmarker and Brian Buntz

Major medtech companies got their share of the thumping that U.S. stock markets received amid a “Black Monday” in which Chinese stocks saw their worst decline in eight years, with resulting questions about the Chinese government’s managing of of the world’s largest economies.

While the U.S. stock market recovered somewhat after tumbling 1000 points in early-morning trading on August 24, it closed the day down 588.40 points, or 3.57%. It marked the worst single-day decline in the U.S. stock market since August 8, 2011, when the Dow fell 634.76 points, or 5.6%. (The New York Times’ UpShot has a thorough analysis of what sent markets berserk this Monday.)

The iShares medtech industry stock index was hit harder than the Dow, falling 3.96% to $115.14, in but another sign of how much the U.S. medtech industry relies on China and other overseas market—a trend that had been gaining steam over the past decades as the nation’s medical device market was projected to expand 15% or more annually.

Five of the largest medical device companies saw their stock fall more than 4%. Abbott Laboratories’ stock fell the most, falling 7.28%.

There appears to have been some correlation between the percentage decline in a medtech-related company’s stock value on Monday, and the percentage of revenues that it takes in overseas. (Overseas revenue percentage was pulled from filings with the SEC.)

More diversified multinationals, such as GE and 3M, were more sheltered from such effects.

Here’s a breakdown:

Company Name  % Change   $ Change  Closing Price  Closing Price 12/31/2014 % Change 2015 (since 12/31/2014)  % of Revenue Overseas
Abbott Labs -7.28% -$3.43 $43.7 $45.02 -2.93% 70%
Varian Medical Systems -4.92% -$4.09 $78.98 $86.51 -8.70% 57%
Zimmer Biomet -4.59% -$4.79 $99.57 $113.42 -12.21% Almost 50%
Medtronic -4.52% -$3.36 $70.91 $75.85 -6.51% 44%
Edwards Lifesciences -4.25% -$5.94 $133.93 $127.38 5.14% 55%
CR Bard -3.80% -$7.27 $184.23 $166.62 10.57% 32%
Stryker -3.78% -$3.76 $95.61 $94.33 1.36% 32%
Intuitive Surgical -3.16% -$16.03 $490.81 $528.94 -7.21% 30%
Boston Scientific -3.06 -$0.5 $15.85 $13.25 19.62% 47%
GE -2.93 -$0.72 $23.87 $25.27 -5.54% 59%
Baxter -2.90% -$1.11 $37.17 $73.29 -49.28% 58%
J&J -2.87% -$2.74 $92.82 $104.57 -11.24% 53%
BD -2.62% -$3.72 $138.2 $139.16 -0.69% * Information not available
3M -2.47% -$3.51 $138.58 $164.32 -15.66% 63.90%
St. Jude Medical -2.35% -$1.6 $66.42 $65.03 2.14% 52.70%
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