3Q10 Company Financials: Orthopaedic and Spine

• Posted in Business Critical | December 31, 2010 | Comments (0)
• Tags: supplier, earnings, spine, financial, market growth, sales, oem, market, 3q, financial, earning, supplier
• By: Julie A. Vetalice

Following is a first look at select company financials for 3Q10. Our estimates place year over year market growth at 4%, as indicated in Exhibit 1, which displays growth by product segment. Performance highlights relate to 3Q10, unless otherwise noted.

Exhibit 1: Orthopaedic Sales¹ Increases by Product Segment: 3Q10 vs. 3Q09

Notes to Exhibit 1:

¹Orthopaedic products only; constant currency, pro forma growth
²For the quarter ended 8/31/10; excludes dental; trauma includes stimulators; spine includes stimulators and orthobiologics.
³Includes biologics
⁴Spine
⁵Endoscopy (most of which is orthopaedic)
⁶ORTHOWORLD estimates
⁷Excludes “Other” (Aerospace)

aap Implantate

• €7.2MM (~US $10.2MM), +20%
• Launched Genius anatomic knee
• Concluded distribution negotiations for antibiotic-impregnated Jason G® collagen fleece in 11/10; product will hit market in 1Q11
• 1st cannulated screws will ship to U.S. in 4Q
• Initial EU sales of cement product will occur in 4Q
• Commenced regulatory procedure on new arthroplasty cement plus antibiotic; clearance anticipated in 1Q11
• Planning 2011 launch of WSG system, to compete with Synthes’ LCP

ArthroCare

• $61.3MM, +11%
• Sports Medicine $56.9MM, +13% (ex-U.S. +12%)
• Spine $4.3MM, -4%
• Sports Med growth attributable to $6.4MM increase in contract manufacturing pursuant to existing supply/distribution contract with Smith & Nephew
• Expects 4Q contract manufacturing sales to be much lower than 3Q
• U.S. Sports Med experiencing lower ASPs and procedures, delays in new product proprietary launches
• Base of active U.S. Sports Med customers stable, but revenue per customer declined
• De-emphasized certain low-margin arthroscopic accessories
• Eliminated remaining U.S. direct spine salesforce; will sell through network of agents
• Launched all 4 Ambient wands, seeing traction with new and existing customers, at modest price premium
• Of 6 new anticipated soft tissue fixation products:
• Launched FirstPass suture passing device, early feedback very positive
• Received FDA clearance for Spartan PEEK Suture Implant system in 4Q; will launch by year-end
• Titan titanium corkscrew implant for rotator cuff will launch 4Q
• SpeedLock knotless PEEK labrum implant and SpeedFix preloaded labrum anchor will launch 1Q11

Artimplant

• SEK 5.1MM (~US $0.75MM), -7%
• Own sales of product increased to 65% of 3Q sales (own sales tripled again in U.S.)
• Artelon MTP Spacer in launch phase in Europe
• Artelon Tissue Reinforcement in market introduction in Europe and U.S.
• Sales of Sportmesh by Biomet Sports Medicine to end-users (from BMET’s own inventory) remain stable
• Sales of Artelon Spacer by Small Bone Innovations continued to fall, due to reports of unsatisfactory surgical outcomes during initial post-launch—surgical instructions not followed, SBi working on corrective communication to market
• Product sales to end-users in Europe stable, though assigned lower priority while concentrating resources on U.S.