Musculoskeletal Industry on the Rebound in Q1
BY LAUREN UZDIENSKI, MAY 3, 2010
With financial results from 1Q:10 largely reported, there are signs of a rebound in the musculoskeletal industry. We estimate that the industry is growing at a rate of about 7%, accelerating from 4Q:09.
With the largest shareholders reported, we estimate hip and knee sales to be increasing at a rate in the mid-single digits this quarter. Hip may have been challenged by concerns over materials that arose in early March. With Synthes reporting 9% sales growth on Thursday, exceeding analysts' expectations, trauma sales appeared to pick up in the first quarter. Dental, which is made up of largely discretionary procedures, appears to be stabilizing as well, despite Nobel Biocare's "disappointing" quarter.
The one sector that remains a bit of a question mark is spine. Right now, early reports suggest that the spine sales increased by about 9% in the first quarter. Ultimately, the spine average will be determined by Medtronic, which comprises over 40% of the spine market and whose InFuse sales set the tone for biologics. MDT reports off-cycle, and their next earnings release is May 25.
It should also be noted that signs of economic recovery are not limited to the orthopedics industry. Last week, the Department of Commerce reported that the GDP rose 3% during Q1, aided by strengthening consumer spending. Recent labor data also shows new claims for unemployment benefits slowing in April.
