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HealthpointCapital Business Board of Advisors member, Dick Foster, Shares His Views on How to Innovate in the Future Healthcare System
HealthpointCapital Business Board of Advisors member, Dick Foster, was recently interviewed by StartUp Health, where he shared his insight on the ever-shifting healthcare landscape.
Dick Foster, a health care industry expert, was a founding member of McKinsey & Company's High Technology, Chemicals, Healthcare and Private Equity practices, and currently serves on the Yale School of Medicine Dean’s Advisory Board, where he is also the Special Advisor for Healthcare Innovation to the President of Yale.
We wanted to share this informative commentary and interview with our reading audience.
RTI Surgical reported financial results for 2Q:14. Revenue was $66.0 million in 2Q:14, beating consensus estimates by 5% and representing an increase of 56% compared to $42.3 million in 2Q:13. Brian Hutchison commented during the earnings call that "if Pioneer revenues have been included in the second quarter of both 2013 and 2014, worldwide revenues would have increased by 6%." Gross margin for 2Q:14 increased to 53.1%, from 45.5% in 2Q:13. The company's segments grew by: spine +90%, sport medicine (2%), bone graft substitutes +50%, surgical specialties +5%, dental +3%, other revenues +96%. Domestic revenues grew by 58% in 2Q:14 compared to 2Q:13 and represented 89% of total revenue in 2Q:14. All growth rates are on a constant currency basis.
Zimmer reported financial results for 2Q:14. Total revenue was $1.18 billion in 2Q:14, missing consensus estimates by 2% and representing an increase of 1% compared to $1.17 billion in 2Q:13. Gross margin for 2Q:14 decreased to 71.8%, from 72.3% in 2Q:13. The company's segments grew at: Knees +3%, Hips 0%, Extremities +5%, Dental (1%), Trauma 6%, Spine (4%) and Surgical & Other (10%) respectively in 2Q:14. The company's Americas, Europe and Asia-Pacific segments grew at (3%), 5% and 7% respectively in 2Q:14. All growth rates are on a constant currency basis.
Medtech S.A. announced they received CE mark certification for their ROSA Spine product, "a minimally invasive spine surgery robotic assistant", which will be used for placement of pedicle screws during surgery.
Product Introduction & Update
CONMED corporation announced Joseph Corasanti is stepping down immediately as CEO, President and Board of Directors member. His father and Company founder, Eugene Corasanti, also is retiring immediately from the Board of Directors. The Board has formed a search committee to find the permanent CEO. Curt Hartman, an independent director of CONMED and former Interim CEO and CFO of Stryker, will serve as Interim CEO of the Company.
Charles Farkas, Senior Partner at Bain & Company and former North American Head of Healthcare Practice, has been appointed as an independent board member. Mr. Farkas will serve on the Audit Committee and CEO search committee.
Bill Abraham, Executive Vice President of Business Development, also announced his retirement from CONMED effective at the conclusion of a transition period. The company is conducting a search for his successor.
Additionally, the board completed their review of strategic options, which included sale or merger. They have concluded that the alternative options did not reflect the value of the company and its growth prospects. The board is discontinuing the review and working with management to develop and execute the Company's strategic plan to grow revenues and margins.
The FDA initiated its National Medical Device Curriculum, a program that will be utilized to educate students and entrepreneurs about the agency's process for evaluating medical devices.
The program will provide students at academic institutions and science and technology innovators/entrepreneurs with FDA-endorsed core information on how to design, test and clinically evaluate devices, identify the root causes of adverse events and device malfunctions, develop iterative designs for devices and navigate the FDA’s regulatory process.
The curriculum is designed as a series of fictional case studies based on real-world medical device scenarios, emulating a format similar to Harvard Business Review Case Studies. The program initially includes four learning tools covering the following subjects: the regulatory pathways for medical devices, safety assurance & risk management planning, and the regulatory pathways for novel devices and for devices that are substantially equivalent to already marketed predicate devices.
In order to promote further efficacy in the development of novel medical products that help advance public health, supplemental case studies are currently under development at the FDA.
According to a new report published by the Milken Institute, the benefits of medical technology contribute a net added benefit of $23 billion per year for the U.S. economy by counteracting the fiscal impact of chronic disease.
In the study, entitled, "Healthy Savings: Medical Technology and the Economic Burden of Disease", the research team evaluated medtech innovations for heart disease, diabetes, colorectal cancer and musculoskeletal disease. The researchers determined that certain technologies, including colonoscopy and sigmoidoscopy; angioplasty in combination with echocardiography, electrocardiography and pacemakers; and joint replacement (arthroplasty) procedures utilizing magnetic resonance imaging (MRI) devices, all result in "considerable" cost savings and health benefits for patients.
Joint arthroplasty specifically, can relieve pain, "dramatically" reduce sick days and raise productivity. Joint replacement procedures often improve the chances of curing a patient's chronic condition and extending their survival, therefore boosting the national economy by expanding individuals' workforce participation and galvanizing stronger on-job performance.
Furthermore, the researchers constructed three alternative trajectories through 2035 for continued medtech innovation for each of the four diseases. In the scenario that assumes medtech innovations follow an accelerated path, the study concludes a cumulative net gain of $1.4 trillion for the U.S. economy.