Stryker's Resurfacing Sales Disappoint; Corin Shares Plummet
BY LAUREN UZDIENSKI, MAY 20, 2008
Stryker announced last week that sales of Corin's Cormet hip resurfacing system, which Stryker distributes exclusively in the U.S., were not meeting expectations. The company will not order more Cormet systems until December.
Shares of both Stryker and Corin fell on the news, and the latter was hit particularly hard; Corin was down 47% over the past five days, which represents a loss of around $178 million in market cap.
This is disappointing news for both companies. Corin's agreement with Stryker leaves the company with few alternatives for revenue growth, as there is little flexibility for the company's other innovative products in different geographies (Stryker also has an exclusive agreement to distribute the Uniglide, Corin's unicondylar knee, in Canada.) As far as implications for Stryker, historically, hip growth has trailed that of other orthopedic divisions, and the company had hoped that the Cormet system would help to revitalize the hip business. How Stryker will mobilize in this increasingly competitive market (systems from JNJ and Zimmer are on the horizon, though the latter has recently been plagued with problems of its own) remains to be seen.
