With over 110 years of existence, Getinge is a true Swedish success story. Born as a manufacturer of agricultural equipment in the small rural town on Sweden’s southwest coast from which it takes its name, the company has grown to become a world leader in medical technology. After several years of underperformance, Getinge has surged since the arrival of Mattias Perjos as CEO in 2017. Perjos’ arrival came during a pivotal moment for the company, when the board decided to distribute the subsidiary Arjo to Getinge’s shareholders and list it on Nasdaq Stockholm
The bar has been raised and Getinge is ready, but it might not be the case for some companies
“I took over during an inflection point for Getinge. At that time, a spin-off decision with Arjo had already been made; my first priority was to execute the complex carve-out process. At the end of the day, I believe it has been to the benefit of both companies; it allowed Getinge to be more focused within the hospital setting. Alongside the Arjo split, Getinge conducted a strategic review, which addressed the growth rate that had been in decline. One of the key conclusions was that the decline was due to internal distractions over a long period of time, which meant that the company was in a good position to get back on track,” he explains, adding that the company was standing on solid ground. “The analysis revealed that Getinge had a strong position in the market, with more than 25,000 customers across the globe, and a long-standing relationship with many of them.”
The distractions – as Perjos puts it – of recent years directly impacted Getinge’s ability to innovate, with only 14 percent of sales driven by products launched in the last three years. “14 percent is on the low end. To improve, we are looking to get our new therapies in ventilation and monitoring approved in the US,” Perjos reveals. “Getinge’s largest R&D investment at the moment is the collaboration with Verb Surgical for robotics, artificial intelligence and imaging. Every new piece of equipment sold by Getinge has built-in connectivity.”
One of the fiercest threats facing the company, and the European medical device industry at large, are new EU regulations set to take effect in 2020. The obligations stemming from these regulations will require companies to update clinical data, technical documentation, and labelling, and will include broadened definitions of regulated devices.
“Getinge has already seen an impact from the regulations, we have been going through the portfolio, deciding which products are going to make the cut. Luckily, it will not have an impact on patients because the ones being taken out are mostly variants of products. While the regulations present a hurdle today, I believe it will create an environment that is easier to navigate in the future,” declares Perjos.
Perjos has a word of warning for smaller players. “The bar has been raised and Getinge is ready, but it might not be the case for some companies. We have seen that reflected in the influx of opportunities for M&A that we get. There are small companies throwing in the towel because the burden will be too costly for them.”