Japanese technology group Olympus is starting to see a “pent-up demand” for tens of millions of surgeries canceled during the coronavirus crisis, a recovery that should help revive the global medical equipment industry.
Hospitals around the world face a huge backlog of elective surgeries as people avoided visits to minimize the risk of infection and free up resources to treat Covid-19 patients.
Coronavirus cases now decreasing in some countries, doctors are cautiously resuming cancer treatments and procedures such as colonoscopies which are essential for early diagnosis.
“You don’t want colon cancer and other related conditions to go undiagnosed,” said Ross Segan, medical director of Olympus, in an interview. “The market knows that in places around the world where we have a good idea of the Covid rate, we are starting to see that [resumed]. There will be a pent-up request which will increase the volume of proceedings. ”
For Olympus, the drop in surgical procedures has hampered its main activity of gastrointestinal and surgical endoscopes. Sales fell more than 10% in North America in April and a more significant drop is expected for May, forcing the group to postpone the publication of its annual forecasts.
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But sales in China increased by more than 10% in April and remained stable in Europe. Executives expect June to be the lowest profit for Olympus, which holds 70% of the $ 3.5 billion global market for gastrointestinal endoscopes.
A study published in the British Journal of Surgery in May estimated that 28 million elective surgeries would be canceled or postponed worldwide during the 12-week peak of a Covid-19 epidemic in a country. Even if the volume of surgery increased by 20% after the pandemic, the backlog would take about a year to disappear, according to the study.
The pandemic hit Olympus at a time when the company was trying to set aside a series of bribes and security scandals which followed an accounting fraud of $ 1.7 billion in 2011.
Managing Director Yasuo Takeuchi Olympus has made a strategic shift to focus on its medical equipment business, last week to sell its loss-making camera division to a Japanese investment fund.
Dr. Segan joined the Johnson & Johnson group in November as part of the globalization and diversification of its management structure. Its 15-member board of directors now includes three non-Japanese directors, including one from the American activist hedge fund ValueAct.
“I did not interact with [ValueAct] personally, but I think this presence has allowed people like me from outside Japan with global medical technology experience to come in, “said Dr. Segan.
Beyond the financial impact of the coronavirus, blockages and social distancing have also forced Olympus to change the way it serves its doctors. He moved 85% of his training face-to-face on the Internet and provided a technology that allows doctors to consult each other virtually using real-time clinical videos and endoscopic images.
These changes could be here to stay, according to Dr. Segan.
“In reality, this is partly accelerated by the fact that the doctors are busy and because of the observance, they cannot travel far,” he said. “But I believe it has also been accelerated because people want access to training and education everywhere and everywhere.”