A study published in the July 14, 2008 issue of Archives of Internal Medicine contends that hip and knee arthroplasty surgeries may be more beneficial to elderly patients than once believed. The study reports that surgery is not only more... more
Earnings Biomet reported FQ4:08 revenues of $635.6 million, an increase of 16% (10% constant currency) over the year-ago period. Sales increased 10% in the U.S and 24% (11% constant currency) OUS. Recon sales increased 17% worldwide (12% constant currency) to... more
Researchers at the Mississippi Sports Medicine and Orthopaedic Center have found a failure rate nearing 24% for ACL reconstruction in young, athletic patients, according to a new study. Of 61 patients aged 15-39 who underwent ACL reconstruction, 14 were deemed... more
A new JBJS study comparing ReGen Biologics' collagen meniscus implant, Menaflex, with partial meniscectomy was published this week, and the publication comes as a rare bit of good news for the struggling ReGen. At 311 patients, the multi-center study was... more
Knees have been in the media spotlight lately, thanks to two recent articles appearing in the New York Times and Wall Street Journal. Both authors speak positively of their experiences with knee replacements, and the Journal paints a rosy picture... more
Queensland University Of Technology researchers are developing a device they call a "smarthroscope," designed to be a more sensitive alternative to an arthroscope. Professor Kunle Oloyede, who received a grant from the National Health and Medical Research Council to develop... more
In February, the New York Times reported on a rise in pediatric ACL cases, attributed to aggressive athletic activity, the increasingly common practice of MRI scans for injured knees and physicians' heightened familiarity with pediatric ACL tears. Now an article... more
M&A Kinetic Concepts, Inc. announced that it completed its acquisition of LifeCell Corporation. At the time of the expiration of the tender offer, 31.1 million shares of LifeCell common stock had been tendered representing approximately 90.75% of the outstanding shares... more
Earnings Anika Therapeutics reported 1Q:08 total revenues of $8.55 million, an increase of 46% over the year-ago period, which the company attributed to strong domestic and international sales of ORTHOVISC. Revenues beat analysts' expectations by $0.2 million. Net income for... more
Just over a year ago, TiGenix published 12 and 18-month results from their ChondroCelect clinical trial that showed advantages to the ACI treatment when compared to microfracture. Now the company has released further data showing that three years following treatment,... more
Earnings Biomet reported FQ3:08 net sales of $603.1 million, a 14% increase over the year-ago period. Excluding the impact of foreign currency, net sales increased 10%. U.S. revenue was $351.6 million. Adjusted net income for the third quarter was $25.2... more
Earnings aap Implantate reported 2007 revenue of EUR 28.0 million ($41.24 million), an increase of 52% over 2006. Net profit for the year was EUR 1.5 million ($2.21 million), down from EUR 1.6 million ($2.36 million) in 2006, which the... more
According to a new study reported on by the New York Times, patient gender appears to influence whether physicians recommend they have a knee replaced. In a Canadian study, a male patient was told twice as often to have the... more
Earnings BioMimetic Therapeutics reported 4Q:07 revenues of $4.5 million, up from $1.9 million in 4Q:06 but missing analysts' estimates by $1.1 million. Revenues included $3.6 million of product sales of GEM 21S to Luitpold, $0.7 million of royalty income and... more
Clinical research presented at AAOS's annual meeting included a number of large-joint studies, one of which showed that hip and knee replacement procedures will climb to 572,000 and 3.4 million, respectively, in 2030. That's 101% more hip replacements and 525%... more
Earnings Anika Therapeutics reported 4Q:07 product revenue of $7.9 million, in line with estimates and up from $5.08 million for the same period last year. The revenue growth was attributed to domestic and international sales of the ORTHOVISC product line,... more
On Thursday of last week, MAKO Surgical Corp went public. The Company, which makes robotic arms for minimally inveasive knee surgery, raised an impressive $51 million in capital selling at $10 a share. Although it lost some ground on the... more
Earnings Smith & Nephew announced 4Q:07 revenues of $967.0 million, beating estimates of $933.0 million and reflecting a 25% (reported) increase over 4Q:06. Adjusted earnings per share was $0.16, in line in estimates and up 10% over the year-ago period.... more
Earnings JNJ reported 4Q:07 revenues of $15.96 billion, up 17% over the year-ago period and beating consensus estimates of $15.4 billion. Net income was $2.37 billion, or $0.82 per share, missing estimates by $0.04. Depuy reported 4Q:07 sales of $1.21... more
M&A ArthroCare Corp. acquired DiscoCare, Inc., whom the company describes as "a third-party billing and reimbursement service provider," for $25 million in cash plus potential future milestone payments. The company says, "This acquisition will allow ArthroCare to significantly expand its... more
Osiris announced results from an ongoing Chrondogen study this week, with enrolled patients showing less pain and fewer degenerative bone changes when compared to patients receiving HA. Among the highlights: OA patients receiving Chondrogen experienced a statistically significant reduction in... more
Regulatory Amedica received FDA clearance for their Valeo™ Pedicle Screw system, a low profile and modular pedicle screw system intended for non-cervical pedicle fixation from the T1 through L5. Corin announced FDA clearance for additional sizes of its Cormet hip... more
Earnings ArthroCare Corp. reported 3Q:07 total revenues of $78.5 million, an increase of 21% over the comparable quarter. Revenues missed estimates by $0.11 million. The company reported net income of $11.1 million, or $0.39 per share, up 28% over 3Q:06... more
JBJS published results from a prospective, randomized Norweigan trial where 80 patients were selected to receive either autologous chrondocyte implantation (ACI) or microfracture for the treatment of chronic cartilage defects. There were 40 patients in each group. - Five-year follow-up... more
M&A Orthofix acquired the rights to all of the intellectual property related to the InSWing™ interspinous process spacer. InSWing is designed to relieve pain associated with lumbar spinal stenosis and can be used in a minimally invasive surgical procedure. Orthofix... more
ReGen Biologics today announced it received a "Not Substantially Equivalent" (NSE) letter from the FDA in response to the 510(k) premarket notification the company submitted for its meniscal repair implant. In a press release and conference call, a clearly frustrated... more
Earnings Stryker reported revenues of $1.46 billion, beating estimates of $1.44 billion and increasing 16% from $1.26 billion in 2Q:06. 2Q:07 earnings were $269.1 million, or $0.65 per share, beating estimates of $0.61 and up from $0.52 in the comparable... more
M&A Biomet Inc. shareholders accepted an $11.4 billion buyout offer from a private equity consortium attempting to acquire the medical device maker. The consortium, LVB Acquisition LLC, announced Thursday that nearly 83 percent of Biomet's shares were tendered. The company... more
Regulatory Life Spine announced 510(k) clearance for its static anterior cervical plating system Neo®-SL. The system features an integrated lock that allows bone screws to be securely fixated without any additional locking components. The FDA approved new labeling for Genzyme's... more
Yestderday, Utah-based Amedica Corp. filed an initial public offering Securities and Exchange Commission to sell up to $74.75 million in common stock. The company's technology platform is in silicon nitride ceramics as applied to various types of orthopedic implants including... more
The National Institute of Standards and Technology announced an initiative last week to improve the precision and reliability of computer-assisted orthopedic surgery (CAOS) instruments in hip replacement surgery. NIST researchers have built a "phantom" hip that can be used by... more
Last week, we attended the Society for Biomaterials' annual conference. The event showcases the latest academic research and its broad applications across medical specialties. Roughly a third of the poster presentations focused on orthopedics, and most of the rest related... more
Today's Wall Street Journal features an article on growth in the orthopedic market. Journalist Karen Richardson indicates that innovative, long-lasting and high-margin products are driving investment opportunities. An aging population and increased life expectancy bode well for manufacturers like Stryker... more
Earnings Tutogen announced results for first fiscal quarter ending December 31, 2006. Total revenues increased 43% to $11.5 million, compared to $8.0 million in the comparable quarter of fiscal year 2006. U.S. revenues increased 50%, and international revenues increased 27%... more
Earnings Biologics Regeneration Technologies, Inc. reported 4Q:06 revenues of $19.1 million, down 5% from $20.1 million in 4Q:05. The Company reported net loss of $6.7 million, compared to a net lossn of $1.7 million for 4Q:05. Net loss per diluted... more
Earnings Kyphon Inc. announced 4Q:06 sales totaling $112.6 million, an increase of 31% over the $85.8 million in net sales reported for the 4Q:05. Net income for 4Q:06 increased 228% to $12.2 million, or $0.26 per diluted share, compared to... more
This morning Biomet's board of directors announced an agreement to be acquired by Dane A. Miller, the company's longtime CEO who was pushed aside in March of this year. Miller and his backers - a consortium of private equity firms... more
In October we reported that Genzyme, maker of the viscosupplement Synvisc, announced a CMS decision grouping all industry viscosupplementation products into the same reimbursement code in January 2007. The coding change meant that reimbursement for viscosupplementation treatments will be based... more
Earnings ORTHOsoft reported 3Q:06 revenues of CAN $3.8 million (US $3.3 million), up 59% from CAN $2.4 million (US $2.1 million) in 3Q:05. ORTHOsoft manufactures computer aided orthopedic surgery devices, and they attribute the 3Q:06 growth to increased navigation systems... more
Earnings Biologics: Orthovita reported 3Q:06 product sales came in at $11 million, up 32% compared to 3Q:05. Net loss for the quarter was $3.7 million, or a loss of $0.07 per share. The Company beat analysts' EPS estimates by $0.02,... more
In a press release yesterday, Genzyme, maker of Synvisc, announced a CMS decision that would group all viscosupplementation products into the same reimbursement code in January 2007. The company stated that they would fight hard to dispute this decision (through... more
Earnings Dental: Lifecore Biomedical announced that 1Q:07 net sales increased 12% to $15 million. Net income for the quarter was $1.1 million, representing a year-over-year increase of 9%. The Company was in-line with analysts' estimates and reported earnings of $0.08... more
Earnings: Biomet reported its 1Q:07 earnings totaled $0.44 per share (excluding the adoption of the share-based payment) which was $0.01 more than what analysts were expecting. Revenues increased by 5% to $508 million (foreign currency had a $3 million favorable... more
Earnings: Biologics: IsoTis OrthoBiologics reported 2Q:06 revenue of $10.8 million, up 43% compared to $7.5 million in 2Q:05. Its U.S. division grew 22%, while international revenues grew 39%. The Company has three distribution channels: U.S. independent agents, international distributors and... more
On Tuesday, Exactech reported 2Q:06 revenues of $26.6 million, which represents an increase of 11% over 2Q:05. The Company reported $0.18 diluted earnings per share (EPS) and beat analysts' earnings estimates by $0.01. Net income for the quarter was a... more
Earnings Results: Biologics: Anika Therapeutics announced 2Q:06 net sales increased 11% to $7.1 million. Product revenues grew 74% while licensing, milestone and contract revenue was down 77%. The large product sales growth was partially driven by higher demand for OrthoVisc®;... more
Appointment: Biomet, Inc. appointed Charles E. Niemier as President of EBI's operations following the resignation of its former president, Bart J. Doedens, M.D. Mr. Niemier has been a member of the senior management team and Board of Directors for more... more
Appointment: Spine Wave announced that it has elected Ron Pickard to its Board of Directors. In addition to his role on the Board, Mr. Pickard will be actively involved in key projects including the development and commercialization of Spine Wave's... more
Viscosupplementation to treat osteoarthritis has traditionally been performed with a course of three or five injections. Today Smith & Nephew Inc. and Q-MED AB announced an alliance which paves the way for the US marketing of DUROLANE, the first and... more
This morning, Biomet announced that it has a subpoena from the Department of Justice, Antitrust Division, requesting documents regarding possible violations of federal criminal law, including possible violations of the antitrust laws, relating to the manufacture and sale of orthopedic... more
Zimmer Holdings Inc. said Friday the Justice Department's antitrust division subpoenaed company documents pertaining to an investigation of possible violations of federal criminal law, including possible violations of antitrust laws, involving the manufacture and sale the Company's standad lines of... more
The first group of orthopedic companies reported their 1Q:06 this week and took in $5.3 billion so far. The total aggregated revenues for the quarter were up by 7% from $4.9 billion in 1Q:05. The industry netted $637.8 million, a... more
Many orthopedic companies will be reporting their 1Q:06 results in the next few weeks. The table below provides a listing of conference call dial-in numbers and webcasts for the investment community. How the overall orthopedic industry fared in the first... more
Last week Ossur announced product recall on one of its prosthetic knee lines. The Total Knee® 1100, 1900, 2000 and 2100 models were being recalled due to some faulty pins that were fixated at the axis of the knee. The... more
One of the most informative sessions at AAOS was a section of the Health Policy Update Symposium delivered by William L. Healy, M.D. of the Lahey Clinic. Healy gave real-life examples of the complicated and delicate balance of hospital economics,... more
Dane Miller of Biomet called it quits a week after releasing its 3Q:06 earnings report. Last week, the Company reported earnings per share (EPS) of $0.43 which was in line with Street's estimate but did not meet analysts' expectation for... more
This morning, legendary orthopedic CEO, Dane A. Miller, Ph.D., Biomet's President and Chief Executive Officer and co-founder, announced his decision to retire. He will remain a Director and serve as a consultant. The Biomet Board has appointed Senior Vice President... more
Our current forecast for the orthopedic industry projects continued long term growth of 15%. For 2006, we expect growth to be slightly below this trend, at 12%. Despite continued strength in other segments of the industry, hip and knee reconstruction... more
In addition to the Top Sessions we chose, we have added AAOS presentations by our Scientific Advisory Board members. Please click on the link at the bottom to view the entire list. Wednesday, March 22 10:30 AM - 12:30 PM127Changing... more
Developments in ceramics has always been of great interest to participants in our industry. We thought we would alert you to this article in Wired Magazine that summarized some recent findings in ceramic technology. In essence, scientists are finding that... more
With the AAOS in Chicago fast approaching, we have put together a list of "Hot Sessions" to check out. Please click on the link at the bottom to view the entire list. Adult Reconstruction, Hip and KneeSunday, March 26, 2006... more
Looking ahead to the AAOS 73rd Annual Meeting on March 22-26, 2006 taking place at the McCormick Place Convention Center in Chicago, we wanted to post the latest information on Company Analyst meetings that will be held in Chicago: -... more
Financing: BioMimetic Therapeutics, Inc. filed a registration statement for an Initial Public Offering. Earnings: Medtronic 3Q Earnings climb 23 percent. CryoLife fourth quarter 2005 revenues increased 13% over fourth quarter 2004 Gross margins for full year 2005 increased to 53%... more
Last night Wright (WMGI) reported slightly better than expected results, but lowered 2006 guidance dramatically. Revenue guidance dropped modestly, but EPS guidance was knocked down substantially because Wright will increase investments in R&D and sales and marketing. 2006 Guidance, and... more
Smith & Nephew reported results for 4Q05 and FY2005, and they were strong particularly within their Orthopedics segment. For the quarter, they saw 15% growth (ex F/X) in orthopedic sales to $1,267 million, which broke down as follows: *Knees: +12%... more
It has never been empirically proven that insider (e.g. management and director) buying of a company's stock guarantees that the stock poised to rise, but it has also never been proven to be a bad sign. That's stating the obvious.... more
It has been a busy week for many CEOs and CFOs in the orthopedic device sector. In the past two weeks orthopedic companies reported 3Q:05 sales of $4.7 billion which was a 12% increase over the 3Q:04. Net earnings for... more
Is Wall Street's shrill reaction to hip and knee implant pricing concerns overblown? Even with sophisticated econometric tools such a question is difficult to evaluate because we are dealing with an expectations driven phenomenon. So we have our doubts about... more
While Medtronic was the big winner this week, Wright Medical ("WMGI") captured more headlines with two important news items that have negatively impacted their stock price. On Wednesday, WMGI's stock price suffered a huge loss with 20% decline intraday due... more
One of the leaders in this emerging meniscus repair market is ReGen Biologics. We recently had a chance to do a catch up with Gary Bisbee, CEO of ReGen Biologics who we interviewed last year. Disclosure: Individual members of HealthpointCapital,... more
It's all about spine this week. With NASS in full swing in Philadelphia, many companies eagerly issued press releases during the conference. Clinical: Cervical-Stim® is a post-operative cervical brace that generates a uniformed, low-level pulsed electromagnetic field (PEMF) at the... more
It's all about spine this week. With NASS in full swing in Philadelphia, many companies eagerly issued press releases during the conference. Clinical: Cervical-Stim® is a post-operative cervical brace that generates a uniformed, low-level pulsed electromagnetic field (PEMF) at the... more
On Friday ReGen Biologics, Inc. reported that it received a warning letter dated September 16, 2005 from the FDA. The warning letter was a follow-up to the FDA Form 483 notice of inspectional observations received by ReGen and, along with... more
This week we finish off the first half of 2005 reporting season with 17 orthopedic companies* released their financial numbers. In 2Q:05, in an aggregated total, orthopedic revenues increased 16% ($3.8 billion vs. $3.2 billion) and a 25% increased in... more
Earnings: Please refer to the table (below) for individual company sales and earnings. It's all about earnings this week... Biologics: Clearly, the big winner this week is LifeCell Corp. who reported strong earnings on Monday stock was up 24% at... more
Biomet announced last evening that it was reducing its 4Q:05 earnings guidance as a consequence of hitting the low end of its previous range for 4Q:05 revenues. The Company stated that revenues totaled $503 million for the 4Q:05 which is... more
With most of the major large joint market share leaders reporting their 1Q:05 financials, we examine the strength of the market. At first glance revenue growth of hip products seems to be slowing while knee growth accelerates. Hips We estimate... more
During the 4Q:04 Zimmer beat analyst expectations by $0.07 in earnings-per-share and $18 million in revenues. For their encore, Zimmer reported 1Q:05 adjusted earnings-per-share (diluted) of $0.75 and revenues of $829 million which was exceeded analysts' forecasts by $0.08 and... more
Wright reported 1Q:05 revenues of $82.6 million which was a 10% increase over the 1Q:04. Excluding the effect of currency, WMGI revenues increased 9%. The 10% growth in revenues was almost 3% slower than the revenue growth reported during the... more
SYK reported 1Q:05 revenues of $1.2 billion which was a 16% increase over the 1Q:04 and beat analyst expectations by $2 million. The Company reported earnings of $0.42 per diluted share which was $0.02 better than analyst were forecasting. The... more
Last Thursday the US Census Bureau released new state-by-state projections on the aging of the U.S. population which showed not only how it expects the nation to age, but how the population is expected to shift geographically over the next... more
Background on Gain Sharing. The Hospital Corporation of America ("HCA") has recently asked the Office of Inspector General ("OIG") of the Department of Health & Human Services ("HHS") to allow for "gain-sharing" arrangements. These gain-sharing arrangements would allow hospitals to... more
On April 5th, Corin reported fiscal year 2004 financial results. Total sales grew by 9% on a constant currency basis and 7% as reported. Group turnover for the year was reported at £25.6 million, compared to £24 million in 2003.... more
The healthcare industry has long been the subject of regulation by complex laws that do not exist in other industries and which, under certain circumstances, may seem almost excessive and counter-intuitive. The enforcement of these laws has been significant and... more
At the end of last week, we attended the University of South Florida's "Preservation of Motion in the Lumbar Spine" course to check in on how leading surgeons are coming along with motion preserving spinal procedures and related surgical implant... more
I was struck by economist Paul Krugman's article "America's Senior Moment" in the most recent New York Review of Books. In the article Krugman assails the Bush Administration's push for social security "privatization" with the fervor of a campus radical,... more
We have aggregated the 4Q:04 and 3Q:04 reported revenues (includes the effects of foreign currency) for 16 public orthopedic companies. Although we would have liked to use revenue growth rates which excluded foreign currency, a majority of the companies report... more
EXAC reported revenues of $21.3 million during the 4Q:04 which was a 14% increase over the 4Q:03 but was $300 thousand below analyst's expectations. Earnings-per-share on a diluted basis totaled $0.17 which was also slightly below analyst expectations of $0.16.... more
From a business development and strategy execution standpoint/2004 was an excellent year for Encore. Management completed two acquisitions (Empi and Osteoimplant Technologies, Inc.) which fits the overall business development strategy of ENMC: growth via acquisition. The acquisitions helped drive revenues... more
The 2005 American Academy of Orthopaedic Surgeon Annual Conference was unique to recent meetings. It was louder in terms of the amount of marketing, size of exhibits and mass advertising, yet it was quieter in terms of business development and,... more
This year we attended Smith & Nephew's, Biomet's, Stryker's, and Encore Medical's analyst meetings. All were very professional and well attended. Here are our notes from each: Smith & Nephew Overview: Although Smith & Nephew posted the best large joint... more
Overwhelmed with all the education opportunities? Join the club. Good news for you, though - the HealthpointCapital research team has whittled down the program to 26 of the most controversial and best-hosted side sessions. Minimally Invasive Breaks Out Every year... more
It's here again, the annual AAOS conference. Thousands are ready to descend on Washington, D.C. the week of February 21st to learn of new surgical techniques, new products and to develop business and relationships. While it is hard to predict... more
Wright reported both 4Q:04 and year-end 2004 financials on Thursday evening. 4Q:04 revenues totaled $77.7 million a 13% increase over 4Q:03 revenues and at the upper end of management's previous guidance of revenues of $76-$78 million. Revenues for the year... more
After a strong report from Zimmer earlier in the week, Smith & Nephew followed suit on Thursday. SNN reported revenues totaled £332 million for the 4Q:04 which was a 14% increase over the 4Q:03 on a constant currency basis. Earnings-per-share... more
After Stryker and DePuy reported somewhat modest financial reports two weeks ago, it seemed like many industry analysts and experts were talking of a potential slowdown in orthopedic growth. Then Zimmer reported revenues of $800 million for the 4Q:04 which... more
Stryker reported 4Q:04 revenues of $1.156 billion which was an increase of 15% on a reported basis over the 3Q:04. This was slightly below analyst expectations of $1.158 billion in revenues. Earnings for the 4Q:04 totaled $0.40 per diluted share... more
JNJ reported revenues of $12.8 billion for the 4Q:04 which was a 13% increase over the 4Q:03. DePuy, JNJ's orthopedic division, reported revenues of $952 million for the 4Q:04. This was a 19% increase as reported and a 15% increase... more
Direct-to-consumer advertising has become the most powerful means of marketing pharmaceuticals over the last decade. For years we have seen these strange advertisements which typically only mention the name of a drug and the manufacturer, but withhold any information regarding... more
BMET reported adjusted earnings-per-share of $0.38 during the 2Q:05 which was a 19% increase over the 2Q:04. The adjusted earnings do not include certain non-recurring costs associated with the acquisition of Merck KGaA's interest in Biomet Merck and the acquisition... more
Wright Medical (WMGI:NASDAQ) held its annual analyst guidance call to provide management's outlook for sales, earnings and product trends for the 4Q:04, year-end 2004/2005 and 2006. The forecasts, we think, look strong: 4Q:04 - The Company has reaffirmed its October... more
The lawyer's ads are all over the country and all over the two broadest media outlets we know - television and the internet. "Learn about Vioxx, the Vioxx recall and potential health risks!" "Are you a Vioxx Patient? Find out... more
Smith & Nephew reported revenues of '288.9 million for the 3Q:04 which was a 12% increase over the 3Q:03 on a constant currency basis. Earnings for the 3Q:04 totaled '4.99p per share which was a 15% increase over the 3Q:03.... more
Encore reported its 3Q:04 financials on Monday of last week. Revenues totaled $30.6 million which was a 12% increase over 3Q:03. Earnings totaled $0.04 (excluding certain non-recurring expenses) which was a $0.01 higher than analysts were anticipating and a significant... more
Exactech reported net revenues of $19.5 million for the 3Q:04 which was a 15% increase over the 3Q:03, but slightly below analyst expectations of $20 million. Earnings totaled $0.14 per diluted share which was a 20% increase from the 3Q:03... more
Zimmer also beat earnings expectations by $0.03 per share. Hip revenues rose 14%, knees revenues were up 16% but spine declined 2%. These percentages were as reported. We give the constant currency numbers later in this note. Guidance for the... more
Wright Medical reported a blistering 28% rate of growth for its biologics products as well as a solid 23% rate of revenue growth for its hip products. Clearly, this is a company that is gaining market share from biomaterials. Hip... more
Three of the seven leading large joint orthopedic manufacturers have reported their 3Q:04 financials. So far, market growth rates on a constant currency basis remain in-line with the growth rates reported by industry leaders DePuy, Biomet and Stryker in the... more
Since its introduction, more than 91 million prescriptions for VIOXX have been written in the United States for patients with arthritis pain in either the hip or knee. If one were to include all the prescription Cox-2 inhibitor drugs like... more
WMGI announced that it was lowering its previous earnings per share guidance of $0.13-$0.15 to a range of $0.09-$0.11, or approximately $3.2 - $3.9 million. However, the Company maintained its current revenue projections for the 3Q:04 of $68 - $70... more
BMET reported adjusted earnings of $0.36 which excluded the acquisition of Biomet Merck joint venture and Interpore International. This was an increase of 20% over the 1Q:04 and $0.01 better than consensus estimates. However, BMET's revenues of $438 million, which... more
After the dust cleared from the 2Q:04 earnings season and we had time to analyze the large joint reconstruction market, it was clear that a cursory glance at the market showed a declining revenue growth rate in the hip market... more
Smith & Nephew reported an 8% increase in revenues which totaled '350 million for the 2Q:04. Orthopedics was the strongest segment of SNN, increasing by 14% worldwide and 18% in the US. Growth in Endoscopy sales rebounded from flat to... more
The slight miss in net revenues combined with missing analyst EPS expectations by $0.01 ($0.04 reported versus a $0.05 estimate) sent shares of ENMC downward by 23% on Monday. Encore follows Stryker, Exactech, Wright, and Zimmer who have all seen... more
It is like a broken record; another solid orthopedic earnings report and investors dump shares, again. In similar fashion to Stryker, Exactech and Wright Medical, Zimmer (NYSE: ZMH) beat analysts earnings expectations and investors reacted by selling shares. The difference... more
It seems that orthopedic investors have it in their mind this earnings season that unless a company crushes its numbers and guides significantly to the upside, they will dump shares. This happened to Stryker, Exactech and Wright Medical and now... more
In a common trend this earnings season, Wright Medical reported in our opinion one of the best second quarters of 2004 in the orthopedic sector and investors congratulated the Company by dumping shares. Wright Medical is one of four large... more
EXAC reported revenues of $20.4 million which was a 15% increase over revenues of $17.8 million during the 2Q:04. The Company also reported net income of $1.6 million or $0.16 per diluted share, which represented a 15% increase over the... more
With DePuy, Stryker and Biomet reporting during the last three weeks, this is a good time to identify specific topics imperative to the remainder of the sector's earnings releases over the next several weeks. Large Joint Companies Earnings 2Q:04 Reports... more
In 1995 the average coated femoral stem cost $2,458. Today, coated femoral stems range from $4,225 to $5,097 each for an 85% price increase in 9 years. As we demonstrate in the following table, the rate of component price increases... more
SYK reported earnings totaled $152.7 million or $0.37 per diluted share during the 2Q:04. This 42% increase over the 2Q:03 beat analyst expectations by $0.03. It also triggered several analyst downgrades including First Albany, Wells Fargo and Bank of America.... more
Biomet announced that revenues totaled $447 million for the 4Q:04 and $1.6 billion in 2004 representing a 19% and 16% increase, respectively. Adjusted earnings (for the acquisitions of Merck Joint Venture and Interpore Cross) per share totaled $0.37 for the... more
Current Concepts in Joint Replacement (CCJR) is the best conference for hip, knee and shoulder reconstruction. The meeting allows for surgeons to present new data, debate topics and demonstrate new techniques via live surgery. Our major take-away is that surgeons... more
On Wednesday of last week, (June 2/2004) an FDA panel recommended to down classify both the tricompartmenal and unicompartmental mobile bearing knee by a vote of 6 to 2 and 5 to 3, respectively. Although this doesn't guarantee that the... more
Center for Medicare and Medicaid Services (CMS) released its 2005 proposed payments for inpatient procedures on May 18th/2004. CMS is calling for a 2% increase in DRG 209 payments bringing the total payment to $10,034 up from $9,839 the year... more
We tabulated the five largest general orthopedic companies' financial results for the 1Q:04. The companies include Stryker, Zimmer, Biomet, Smith & Nephew and Wright Medical, each of which has a market capitalization in excess of $1 billion. Although many subscribers... more
Sir Christopher O'Donnell, CEO of Smith & Nephew, held an analyst call to discuss the Company's progress throughout the first 90 days of 2004. The Company reported revenues of '302 million which was a 12% increase in underlying sales growth... more
Ranking, respectively #1 and #2 among Japanese orthopedics companies - but lagging behind American and UK firms (who hold, we estimate, the top 5 positions in the Japanese market) - the medical products businesses of Kyocera and Kobe Steel have... more
Zimmer reported its 1Q:04 financial results on Monday evening and on Tuesday morning held a 2 hour and 15 minute conference call with industry analysts to discuss its results. Although some analysts may believe that 2 hours is too long... more
Exactech (EXAC:NASDAQ) announced that revenues totaled $21 million during the 1Q:04 which was a 16% increase over the 1Q:03. Knee sales, which accounted for approximately 60% of 1Q:04, increased by 21% over the same period a year. The Optetrak knee... more
Wright Medical (WMGI:NASDAQ) reported that revenues totaled $74.9 million during the 1Q:04 which was a 28% increase (22% on a constant currency basis) over the 1Q:03. WMGI also reported that $6.6 million of these revenues flowed through the P&L to... more
While it is widely accepted that the baby boomer population will have a significant impact on the overall orthopedic industry, we believe that the Corin Group, located in the UK, has developed a unique product offering to address this younger,... more
DePuy and Stryker Corp. both reported their 1Q:04 earnings during the last week of trading activities. This provided some insight into both the strength of the Large Joint Orthopedic market and how the additional orthopedic companies will report during the... more
Stryker Corp. (SYK:NYSE), in similar fashion to last year, brought and introduced a majority of its operational leaders of its various operating divisions. However, a significant portion of the analyst meeting, especially Q&A, centered around Stephen MacMillan, President & COO,... more
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... more
Encore (ENMC) management reported revenues of $27.9 million and $108.1 million during the 4Q:03 and 2003, respectively. This represented a 6% and a 13% increase over 4Q:02 and 2002 revenues. In our opinion, the most important revenue turn around during... more
The 4Q:03 conference call offered the first glimpse into how Zimmer's (NYSE:ZMH) integration of Centerpulse was progressing. Ray Elliott, CEO of the “New Zimmer”, offered some insights. Zimmer currently has “100 fulltime employees managing 250 major integration projects and 1,700... more
Exactech reported that 2003 revenues totaled $71.3 million, an increase of 20% over 2002. Knee sales, which now total 57.4% of sales, increased by 23% to $41.3 million during the 4Q:02. Hips had a disappointing 2003, as they increased by... more
For the just completed quarter and year, Wright Medical (NASDAQ:WMGI) reported, we believe, the best quarter and year in orthopedics. First, Wright's seven year investment in the Investigational Device Exemption (IDE) ceramic-on-ceramic clinical hip trial delivered huge dividends in 2003.... more
Smith & Nephew (SNN) reported that revenues totaled $1.9 billion during 2003 which was an 11% increase in underlying sales over 2002. Underlying orthopedic revenues increased by 16% during 2003, totaling $867 million. The Orthopedic growth of 16% was 7%... more
Currently, DePuy is the only orthopedic manufacturer FDA approved to market a mobile bearing knee in the U.S. While a majority of manufacturers market their mobile knee prosthesis overseas, most have been content on waiting for the FDA to down... more
Stryker (SYK) reported that revenues totaled $1.1 billion in 4Q:03 and $3.63 billion for the full year 2003. This represented a 21% and a 20% increase over the respective periods last year. The increase in revenues helped drive a 27%... more
Zimmer reported an abridged 4Q:03 financial report last week along with updated guidance for 2004. While many investors have come to expect Zimmer to exceed analyst expectations, we thought the 4Q:03 could represent the most difficult challenge for the Company... more
Smith & Nephew (SNN:NYSE) held a trading update conference call on Thursday to provide an update on its performance during the 2H:03 – which at 16% orthopedic growth is in-line with the respective market. However, SNN's knee growth rate of... more
Biomet (BMET:NASDAQ) reported its 2Q:04 financials on Thursday. As a consequence of not reporting financials based on a calendar fiscal year, BMET is the earliest to report their quarter. Therefore, both analysts and orthopedic investors pay close attention to BMET... more
Guidance to 2005? This is a famously conservative management, so to guide out to 2005 is cause to sit up and take notice. What's going on at Wright medical? Strong biologics and ceramic on ceramic hip components certainly. But, we... more
At the 78th annual reunion of the Société Française de Chirurgie Orthopédique et Traumatologique (SO.F.C.O.T.) held last week in Paris, the focus was clearly on new materials - ceramics, plastics and biologics. And among the most successful new materials companies... more
Like much of orthopedics, Krispy Kreme sells a lifestyle product. And the basic emotion encompassed in that product is comfort. For eighty five cents, Krispy Kreme delivers a nearly perfect, melt in your month donut and, with that, a happy,... more
About a year ago, Merrill downgraded the entire orthopedics industry saying that revenue growth rates were about to moderate from 2002's blistering 14% growth rates. Medicare was the proximate reason. Unfortunately (for Merrill) orthopedic revenues accelerated in 2003 to 18%... more
Earlier today, Reuters published a short story recounting an occasional rumor that Smith & Nephew (SNN) and Stryker (SYK) are in merger discussions. It is a rumor and may very well prove false, but the logic is strong. Here's our... more
There are two ways to print money if you are a private citizen; counterfeit it – and we all know where that leads – or print stock certificates. Encore announced that it intends to print another 7 million shares. That... more
The data we see coming from the Centers for Medicare and Medicaid (CMS) tells us that the large joint reconstruction market is being driven by people born before 1944. Not Boomers. Not Zoomers – whatever they are – or any... more
Rejected one year ago... Medtronic came back with new data and CMS, while rejecting InFuse again using one analytical approach found another way to show that InFUSE does indeed meet the threshold requirement for receiving a new technology add-on payment.... more
Zimmer: There is no doubt in our mind that Zimmer is grabbing market share – quickly. It is clear that MIS at Zimmer is bigger than instruments and implants; it is really about (aside from improving patient outcomes) reimbursement. CEO... more
That's a 26% year-over-year rate of revenue growth. On a constant currency basis, the growth rate was 19%. To put this in context, for all of 2003, Stryker's orthopedic revenue growth was 18%, on a constant currency basis 17%. For... more
Despite being asked by the Merrill analyst to comment on the prospects for the Next Gen product (manufactured by Zimmer... oops, she meant Next Generation), Biomet's CEO, Dane Miller, was his usual wry self as he announced that overall sales... more
Smith and Nephew's large joint recon business is a muscular enterprise. In its preview of the first half, SNN's management reported that orthopedic revenues are expected to rise 15% year-over-year (YOY), with knees leading the way at a 22% growth... more
Merrill Lynch's ratings downgrade of, in effect, the entire Orthopedics industry will rank, we think, with Business Week's infamous "Death of Equities" cover story - which coincided with the beginning of the greates
