The 2004 AAOS Whirlwind
BY JOHN CHOPACK, MARCH 22, 2004
The 2004 American Academy of Orthopedic Surgeons hit with the speed and intensity of a tornado. It wasn't a destructive tornado but rather a whirlwind of innovative technology and merger activity. Biomet (BMET:NASDAQ) couldn't wait for the official Academy to begin before announcing it was purchasing Interpore Cross (BONZ:NASDAQ) for $280 million in cash ($14.50 per share). The acquisition broadens BMET's spinal product portfolio and adds significant spinal distribution. During Biomet's analyst meeting at AAOS on Thursday, Dave Mercer, CEO of Interpore was given a chance to provide an update on BONZ and, more importantly, introduce Interpore to BMET's analysts and investors. In a unprecedented move for Biomet, the Company had five doctors (James W. Scott, M.D., Barry J. Waldman, M.D., John M. Cuckler, M.D., Steven D. Cook, Ph.D., & Neil Kahanovitz, M.D.) provide updates on innovative technology within the large joint (metal-on-metal hips & MIS procedures), spine (disc arthroplasty), Sports Medicine and Electrical Stimulation markets (Stimulation versus BMPs).
The next large orthopedic manufacturer to get infected by the acquisition bug was Smith & Nephew (SNN:NYSE). It announced on Friday that it was purchasing Midland Medical Technologies (MMT) for GBP 67 million. MMT has expertise in MIS metal-on-metal hip resurfacing and posted revenues of GBP 20 million in 2003. SNN also announced during its analyst meeting that it was creating a new spine division and could seek to develop its product line via acquisition.
As usual, Zimmer's (ZMH:NYSE) booth (or should I say small city) was a bee hive of activity. Repeating many of last year's messages at this year's Academy, Zimmer focused on MIS. During its analyst meeting on Wednesday evening, ZMH provided an update on its MIS program including its work with Medtronic to develop the Stealth Station surgical navigation system for MIS hip and knee procedures. In addition, Zimmer provided its budget for MIS expenditures for 2004 which is expected to total $80 million and include spending for the Zimmer Institute, Brand Franchising, Promotion and Knee Development and Engineering. Zimmer also provided an update on its Centerpulse integration which includes management of '250 discreet projects and 1,700 individual milestones to unite operations in the 24 countries' where it has facilities and the 80 countries in which its products are sold.
