Company Financials: Orthopaedic and Spine

ORTHOWORLD estimates place 2Q11 market growth at 5% over 2Q10 as shown in Exhibit 1, which displays 2Q orthopaedic sales growth by product segment for select companies. Performance highlights follow.

 

Exhibit 1: Orthopaedic Sales1 Increases by Product Segment: 2Q11 vs. 2Q10 

Notes to Exhibit 1

1 Orthopaedic products only; constant currency, pro forma growth
2 Includes biologics
3 For the quarter ended 5/31/11; trauma includes stimulators; spine includes stimulators and orthobiologics.
4 For the quarter ended 7/29/11
5 Spine
6 For the quarter ended 6/30/11
7 Extremities: extremities + fixation combined; Endoscopy: endoscopic + communications, most of which is orthopaedic; Spine: neuro + spine. Total growth excludes Patient handling.
8 ORTHOWORLD estimates
9 For the quarter ended 6/30/11
10 Excludes "Other" (Aerospace)

 


Alphatec Spine
$50.9MM, +8% (U.S. $34.5MM, +18%; ex-U.S. $16.3MM, +1%)

  • Claims 4th largest market share position in Japan
  • Resubmitted 510(k) for OsseoScrew, as planned
  • >500 cases complete to date w/PureGen Osteoprogenitor Cell Allograft
  • Not aware of significant impact on PureGen arising from recent FDA letter
  • Halted beta launch of Solus due to instrumentation issues, will re-release with redesigned components by end of 3Q

ArthroCare
$59.5MM, +3%

Sports Medicine $57.2MM, +5% (ex-U.S. +22%)
Other (includes Spine) $2.3MM, -26%

  • Entered into agreement to supply Wright Medical with soft tissue fixation products for foot and ankle based on Opus knotless suture technology
  • Received FDA clearance for SpeedFix labrum repair product; SpeedLock clearance still outstanding
  • Titan metal anchor and Spartan PEEK anchor will be fully launched by end of 3Q 

Biomet (for fiscal 4Q11, ended 5/31/11)
$715.2MM, -1% (U.S. $411.7MM, -3%; Europe $198.7MM, flat; International $104.8MM, +3%)

Reconstructive $549.2, flat (U.S. flat)

  • Hips flat (U.S. flat)
  • Knees -1% (U.S. -5%)
  • Extremities +15% (U.S. +22%)
  • Other +1% (U.S. -1%)

Fixation $58.6MM, -9% (U.S. -10%)
Spine $55.4MM, -10% (U.S. -12%)
Other $52.0MM, +8% (U.S. +1%)

  • Sports Medicine +11% (U.S. +8%)
  • Other +15% (U.S. -1%)

Recon

  • Metal-on-metal at <20% of acetabular units in U.S.
  • Not able to rev up Signature pipeline/momentum as expected
  • Launched Oxford Microplasty instrumentation, received regulatory clearance for Oxford Twin Peg Femoral component (will launch in 1QFY12)
  • Launched global tissue sparing hip stem in Europe

Trauma and Spine

  • Released 70 sets of OptiLock VL Distal Radius Plating system; 100 more scheduled for FY1Q production
  • Saw meaningful impact in spine from handful of account losses to more traditional and physician owned competition

China Kanghui
RMB 81.8MM (~US $12.8MM), +41% (Domestic ~$9MM, +47%; International ~$2.5MM, +2%)

Trauma $7.4MM, +24%
Spine $4.1MM, +74%
OEM $1.3MM, +74%

  • Strong demand continuing for L-8 spine products, despite 10% price increase
  • Will launch Wei Rui Li knee product in 1H12

ConMed
$108.9MM, -3%

Arthroscopy $70.6MM, -8%
Powered Instruments $38.3MM, +58%

Corin (for 1H11, ended 6/30/11)
£22.1MM (~US $36.5MM), -1%

Hips ~$19.3MM, +13%
Knees ~$6.1MM, -21%
Other Products ~$11MM, -9%

Hips/knees

  • Non metal-on-metal hips +48%
  • Cormet and Optimom ~6% of 1H group sales
  • Commenced direct distribution of Cormet (terminated agreement with Stryker)
  • ECiMa liner now rolled out as part of Trinity cup

DePuy
$1,469MM*, +1% (U.S. $770MM, -0.8%; ex-U.S. $699MM, +4%)

Hips -3% (U.S. -7%, ex-U.S. +1%)
Knees -4% (U.S. -5%, ex-U.S. -4%)
Spine flat (U.S. -4%, ex-U.S. +8%)
*DePuy sales do not reflect purely orthopaedic revenue and growth.

  • Worldwide pricing -3%: knees -1%, spine -3%
  • Received European regulatory clearance for Reclaim hip

DJO Global (pro forma)
$278.9MM, +1%

Bracing/Vascular* $102.0MM, flat
Recovery Sciences $86.2MM, -1% (Bone Growth Stim +13%)
International $73.0MM, +3%
Surgical Implant $16.4MM, +8%
*Includes products serving the diabetes market.


Exactech
$51.7MM, +9% (U.S. $32.69MM, flat; ex-U.S. $19.1MM, +29%)

Hips $8.4MM, +15%
Knees $20.7MM, +7%
Biologics and Spine $6.0MM, -13%
Extremities $9.7MM, +36%
Other $7.0MM, flat

  • Primary growth drivers: Europe, Spain, Japan

Greatbatch Medical
$37.9MM, +8%

Integra Orthopedics
$80.5MM, +11%

  • Extremity reconstruction grew in mid-teens
  • SeaSpine and orthobiologics led spine growth

Kensey Nash (for fiscal 4Q11, ended 6/30/11)
$8.6MM, -1%

Sports Medicine $3.1MM, -39%
Spine $4.1MM, +19%
Trauma/Craniomaxillofacial $1.4MM, +714%

  • Royalties from Orthovita $1.5MM, +8%

MAKO Surgical
$18.6MM, +81%

Procedures $7.6MM, +81%
RIO Systems $9.4MM, +67%
Service/Other $1.4MM

  • 1,557 MAKOplasty® bone-resurfacing procedures performed (U.S. 1,519; ex-U.S. 38)
  • 199 lateral and isolated patellofemoral procedures (~13% of total MAKOplasty volume), 94 bicompartmental
  • On track to launch hip application by end of year

Medicrea
€5.8MM (~US $8.2MM), +29%

  • Best performance to date for U.S. subsidiary, mainly attributable to PASS LP thoracolumbar fixation system

Medtronic (for 1Q12, ended 7/29/11)
$825MM, -3% (U.S. $589MM, -7%; ex-U.S. $236MM, +7%)

Core Spinal $610MM, -5% (U.S. $398MM, -9%; ex-U.S. $212MM, +4%; Metal constructs -3%, Kyphon -13%)
Biologics $215MM, +2% (U.S. $191MM, flat; ex-U.S. $24MM, +40%; Infuse -8%)

  • Asked Yale to conduct 2 independent systematic reviews of all Infuse-related clinical data; will make all Infuse clinical trial data/results available to medical researchers
  • Will focus on surrounding the spine surgeon with all technologies, including surgical, navigation, implants, etc., to provide economic value that attracts the hospital buyer

NuVasive
$133MM, +11% (Biologics $24.2MM; ex-U.S. ~7.5% of revenue)

  • Completed launch of MaXcess 4 retractor
  • Helix R Anterior Cervical Plate seeing very good early adoption
  • Delays at FDA holding up commercialization of Progentix synthetic biologic, product currently marketed ex-U.S. as AttraX, could have U.S. clearance by year-end

Orthofix
$141.8MM, +2%

Spine $76.5MM, -3% (Stimulation $39.7MM, -12%; Implants/Biologics $36.9MM, +9%)
Orthopaedics $40.1MM, flat
Sports Medicine $25.2MM, +8%

  • Notes difference between Trinity Evolution and PureGen in light of FDA letter to Alphatec—does not expect risk of reclassification
  • New product: Collage synthetic biologic, complementary to Trinity Evolution

RTI Biologics
$29.3MM, +9%

Spinal $11MM, +34%
Bone Graft Substitutes/General Orthopaedic $6.2MM, -14%
Sports Medicine $12.1MM, +5% (U.S. 7%)

  • Launched BioAdapt demineralized bone matrix foam
  • No material affect on business from controversy surrounding Medtronic’s Infuse

Smith & Nephew
$819MM, +4%*

Orthopaedics $588MM, +4% (U.S. +4%, Europe +2%, Rest of World +6%)

  • Hips $181MM, flat (U.S. -2%, ex-U.S. +2%)
  • Knees $220MM, +7% (U.S. +10%, ex-U.S. +3%)
  • Trauma $115MM, +4% (U.S. +2%, ex-U.S. +7%)
  • Clinical Therapies $61MM, +6%

Endoscopy $231MM, +5% (U.S. +5%, Europe flat, Rest of World +9%)

  • Arthroscopy +6% (Repair +10%, Resection +1%)
  • Visualization -9%

*Excludes Wound Management.

  • Will cut costs in U.S. and Europe, refocus resources on emerging markets (BRIC)
  • Combining Orthopaedics and Endoscopy into one Advanced Surgical Devices Division
  • Launched Bioraptor Curved Suture Anchor for shoulder, Dyonics Platinum specialty blades
  • Acquired Tenet Medical (patient positioning systems) for $35MM

Stryker
$2,045.5MM, +12% (U.S. $1,284.3MM, +11%; ex-U.S. $761.2MM, +14%)

Reconstructive $916.3MM, +2% (U.S. +1%, ex-U.S. +3%)

  • Hips $312.4MM, +4% (U.S. +4%, ex-U.S. +4%)
  • Knees $328.5MM, -1% (U.S. -2%, ex-U.S. +1%)
  • Trauma/Extremities $219.3MM, +4% (U.S. +4%, ex-U.S. +4%)

MedSurg Equipment* $772.8MM, +12% (U.S. +14%, ex-U.S. +4%)

Neurotechnology/Spine $356.4MM, +49% (U.S. +28%, ex-U.S. +105%)

  • Neurotechnology $187.4MM, +142% (U.S. +74%, ex-U.S. +346%)
  • Spine $169MM, +4% (U.S. +4%, ex-U.S. +4%)

*MedSurg includes patient handling and emergency medical equipment.

  • Acquired Memometal (extremity devices with shape memory metal) and Orthovita (biologics)
  • Positive growth momentum from ADM, MDM hip offerings; clearance of customized cutting guide will drive share gains in 2H11
  • Now rolling out OtisMed; shape-matching could have ~10% penetration in knees

Symmetry Medical
$94.7MM, +7%

Instruments $37.8MM, +7%
Implants $26.5MM, -7%
Cases (mostly non-ortho) $24.8MM, +25%
Other $5.6MM, +10%

  • Experienced decreased orders in late 5/11, driven by lower volume in ortho procedures and reduced/delayed customer spend

Synthes
$992.0MM, +5%

North America $557.4MM, +5%
Europe $236.9MM, +6%
Asia Pacific $128.2MM, +13%
Rest of World $69.5MM, -3%

  • Launched new products across all groups in Europe, including antibiotic-coated intramedullary nail
  • >15% growth in Australia and New Zealand, double-digit growth in Latin America

Tornier
$65.2MM, +12% (U.S. $34.3MM, +12%; ex-U.S. $30.7MM, +12%)

Total Extremities $50.8MM, +14% (Upper $40.7MM, +15%; Lower $6.4MM, +11%; Sports Med/Biologics $3.5MM, +12%)
Large Joints/Other $14.3MM, +5%

  • Announced 1st U.S. implant of Simpliciti stemless shoulder under Investigational Device Exemption, launched product in Europe
  • 8 product launches remaining in 2011: 2 large bone, 2 foot/ankle, 4 sports med/bio

TranS1
$5.3MM, -26% (U.S. $4.9MM, -27%)

  • U.S. AxiaLIF $4.6MM (66% 1-level, 34% 2-level)
  • 449 TranS1 procedures performed
  • Will launch MIS direct lateral system in 2012

Wright Medical
$132.5MM, flat (U.S. -1%, ex-U.S. +2%)

Hips $45.5MM, -3% (U.S. -13%, ex-U.S. +4%)
Knees $33.3MM, +2% (U.S. +7%, ex-U.S. -3%)
Biologics $17.9MM, -11% (U.S. -11%, ex-U.S. -9%)
Extremities $32.7MM, +9% (U.S. +8%, ex-U.S. +10%)
Other $2.8MM, +19%

  • Positive feedback on launch of EVOLUTION knee (new accounts, new users)
  • Launched FUSIONFLEX Demineralized Moldable Scaffold, INBONE II Total Ankle Replacement

Zimmer
$1,137MM, +2% (Americas flat, Europe +5%, Asia Pacific +6%)

Hips $345MM, +2% (Americas $151MM, +2%; Europe $122MM, -1%; Asia Pacific $72MM, +7%)
Knees $471MM, -1% (Americas $266MM, -5%; Europe $128MM, +9%; Asia Pacific $77MM, +2%)
Extremities $41MM, +4%
Trauma $69MM, +14%
Spine $56MM, -6%
Orthopaedic Surgical Products/Other $88MM, +8

  • Trabecular metal products offsetting some price pressures
  • Introduced REX Stop bone cement restrictor and mixing gun system in Europe, as well as ceramic-on-ceramic large diameter head Maxera cup and CLS Brevius stem

 Sources: Company press releases, earnings calls, filings with the Securities and Exchange Commission

Julie A. Vetalice is Editor, Information Products for ORTHOWORLD Inc. She can be reached at 440.543.2101 or This email address is being protected from spambots. You need JavaScript enabled to view it..