Industry analysis – Medical Devices case study
US medical device makers could lose $138 million this year as a result of the 25 percent US tariffs on Chinese imported goods that went into effect from July, and they may cause some manufacturers to downsize and cut research and development.
“We estimate that the imposition of additional 25 percent duties will impact approximately $836 million worth of medical technology entering the US from China, including related component parts and manufacturing materials,” said Ralph Ives, executive vice-president of AdvaMed, a trade association based in Washington.
“These tariffs on imaging products or their components will harm the US medical technology sector’s ability to stay competitive and will adversely affect the US economy in ways that could compromise patient access to care,” said Patrick Hope, executive director of the Medical Imaging and Technology Alliance (MITA).
“The tariffs are estimated to cost American device makers more than $138 million this year. CT scanners and other X-ray device components, in particular, would be most significantly affected, according to the survey results,” Hope added.
We use our system to analyze the Medical Devices industry to see if the new tariff had impacted the industry scoring:
(The event-driven score is scaled between 0-1 where bellow 0.5 points to a bearish event-driven score based on events during the filtered period, above 0.5 points to bullish event-driven score) clicking here to trial our system
We can see that despite the panic in the Medical Devices industry, the 90 days event-driven score for the industry, is at the top in the sectoral level compared to other industries within the Healthcare sector. During the past 90 days, the Medical Devices generate 0.62 event-driven scoring followed by the Medical Diagnostics & Research (0.62), Drug Manufacturers (0.619), Biotechnology (0.612), Health Care Plans (0.58), Medical Instruments & Supplies (0.53) and Pharmaceutical Retailers (0.48).
When analyzing the industry return, we see a positive return during the past 90 days (+11%) using iShares U.S. Medical Devices ETF returns
Looking at the companies within the Medical Devices industry reveals higher scoring for most companies which indicate a bullish trend for the industry as a result of positively related events such as FDA approves, earnings, M&A, partnerships and much more.
While most companies in the Medical Devices industry are found above the 0.5 marks, there are some that are found below the mark, among them are Cutera, K2M, MiMedx, and Zimmer Biomet. These companies had more negative related events than positive such Lawsuits, earnings miss FDA decline potential management change etc… therefore, their scoring is found lower than the 0.5 marks which indicate a bearish territory.
From these data points, we can see a natural impact of the new tariff on the industry as it is the leader of the healthcare sector with the highest score of 0.62 and 11% return during the past 90 days. Having said that, only the future will reveal if the industry is riding on the bullish market trend or the companies within the industry are performing well and adjusted to the new business environment. From an event perspective, the Medical Devices companies had more positive related events than negative with a strong outlook ahead.
In today’s rapidly changing environment it is essential to be able to track corporate events such as M&A, new deals, partnerships, ESG, regulatory decisions, management and stakeholders changes, expansions to new market or product categories, new products, price changes, new agreements, FDA decisions, financial reports related events, macroeconomics and much more…..
These events are found in traditional financial sources as well as in the social media, however, but it’s critical to use reliable sources to avoid misleading events like the Tesla’s case. To extract, clean and analyze the events, a hybrid model between Human and machine should be conducted to get quality event detection and analysis. Finally, the event data should be steam to the end user in the most compelling and easy to use methodology because of the data overload.
Tracking equities or other assets events can add an edge to new investments decision, finding new opportunities monitoring portfolios, mitigate risk and acts as a complimentary analysis alongside to the traditional analysis.
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Financial reports related events, M&A, new deals, partnerships, ESG, regulatory decisions, management change, expansions, new products, FDA decisions, macroeconomics and more…..
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