Earnings
Genzyme posted 2Q:10 revenues of $1.1 billion. Revenues dropped 12% over the prior year period and missed analysts’ expectations by $0.1 billion. The company eked out a profit of $23,000, down from $187.6 million over the year-ago period. Excluding items, EPS were $0.18, down from $0.68 in 2Q:09 and missing estimates by $0.33. Synvisc, the company's treatment of osteoarthritis of the knee, contributed $107.7 million to Genzyme's 2Q:10 revenues, up 31% over the same period last year.
Johnson & Johnson reported 2Q:10 revenues of $15.3 billion, flat over the year-ago period and missing estimates by $0.4 billion. DePuy reported 2Q:10 sales of $1.4 billion, up 4% from 2Q:09. Among segments, hip sales increased by 6%; knee increased by 5%; and spine sales were flat. All growth rates exclude the effects of currency. Adjusted net earnings and EPS for the quarter were $3.4 billion and $1.21, respectively, up 5% over the year-ago period and in line with estimates.
OsteoMed realized 11% YTD growth through 2Q:10. This growth was driven by the company’s Small Bone Orthopedics division, which has YTD growth of 14%, including 144% growth internationally.
Stryker posted 2Q:10 revenues of $1.8 billion, up 7% from 2Q:09 and meeting analysts’ expectations. Orthopedic implants contributed $1.0 billion, a 1% increase over 2Q:09. Among segments, hips increased 2%; trauma increased 7%; and spine and knee remained flat. Growth figures reflect constant currency. Adjusted net income and EPS for 2Q:10 were $319.0 million and $0.80, respectively, up 10% over the year-ago period and in line with estimates.
Zimmer reported 2Q:10 revenues of $1.1 billion, a 3% increase over 2Q:09 and missing estimates by $0.1 billion. Segment-wise, reconstructive sales increased 3%; dental increased 8%; extremities increased 13%; trauma increased 2%; and spine decreased 9%. All growth rates reflect constant currency. Diluted EPS for the quarter were $1.09 adjusted, increasing 9% over the year-ago period and beating Wall Street estimates by $0.04.
M&A
Biomet acquired Cytosol Laboratories on July 16, 2010 for an undisclosed amount. Biomet noted that they were acquiring "substantially all" of Cytosol's assets, but did not specify what they intend to leave behind. Cytosol manufactures anticoagulants and other products to aid in the processing of blood components.
Funding
Orthopedic Synergy Inc. has raised $2.7 million of a $4.0 million mixed-security offering, according to an SEC filing. The funding included commitments from 12 unnamed investors.
Oxford Financial Corporation has agreed to loan $20.0 million to United Orthopedic Group (UOG). The financing consists of a $10.0 million revolving line of credit and a $10.0 million growth capital loan and will be used to spur further growth in UOG’s business and product line.
Regulatory
Replication Medical received a warning letter from the FDA contending that the company is marketing its EnGuard Vessel Guard outside of the bounds of its 510(k) clearance. The cleared indication for use for the EnGuard is "as a cover for vessels following anterior vertebral surgery," according to its 510(k).
Product Introduction and Update
DePuy Mitek announced the introduction of VERSALOK PEEK, a new nonmetallic rotator cuff anchor, at last week’s 2010 Annual Meeting of the AOSSM. VERSALOK PEEK aims to make soft-tissue procedures more time-efficient with a self-punching pilot hole and knotless anchors that allow for quicker suturing. The anchor, which does not interfere with MRI scans, is indicated for use in knee, elbow and shoulder procedures.
Intellectual Property
SANUWAVE has been granted a European patent titled “Shock Wave Generating Device.” The patent grants SANUWAVE exclusive rights to manufacture devices that generate acoustic shock waves using piezoelectric fibers. The company expects the fibers, which are highly malleable and can be densely packed into devices, will improve the precision of their existing Pulsed Acoustic Cellular Expression (PACE) technology.
Trinity Orthopedics, LLC was granted a Notice of Allowance from the U.S. Patent Office for a “monoplanar pedicle screw method, system and kit.” The method will contribute to Trinity’s ReStor product, a posterior fixation system that returns the spine to an anatomical and structurally-sound position.
Applied Spine Technologies, Inc. was also granted a Notice of Allowance this month. The application outlines a device that stabilizes the lumbar spine while allowing for a limited range of movement, a system the company compares to its existing Stabilimax device.
Clinical
The American Academy of Orthopedic Surgeons (AAOS) released a set of 16 research-based guidelines on the treatment of glenohumeral joint osteoarthritis. A summary of the recommendations can be found here.
Hospitals could avoid annual charges for pediatric patients of nearly $30 million by reconstructing ACL tears in children early instead of delaying treatment to a later date, according to a study presented at the AOSSM’s 2010 Annual Meeting.
Appointments
RTI announced the appointment of Dean H. Bergy to their board of directors. Bergy was Stryker’s CFO from 2003 - 2009 and currently advises the company’s financial operations.
