In the midst of Zimmer Holdings, Inc.’s announcement of buying up Biomet, Inc., the company also announced first quarter sales results on April 24, 2014
Zimmer Takes Knee Market Share in First Quarter
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Net sales of $1.161 billion were up 2% on a reported basis over the previous year’s first quarter. Sales rose 3.2% on a constant currency basis. The company expects full-year sales to increase approximately 3.0% to 5.0% on a constant currency basis from 2013 while foreign currency translation will decrease revenues by approximately 0.5% for the full year, resulting in reported revenue growth between 2.5% and 4.5%.
Driven by the hugely successful launch of the Persona Knee, knee sales were up 4%. Hips were flat, extremities rose 9%, trauma dropped 3% and spine continued its slow recovery, climbing 1%. All percentages are on a reported basis.
Dave Dvorak, the company’s president and CEO said, “Zimmer produced solid results during the first quarter, providing further validation of our long-term growth and stockholder value creation strategies.” Needham analyst Mike Matson called the quarter results, “So-So, ” because the company missed consensus revenue.
As expected, analysts asked Dvorak very few questions about the previous quarter as everyone wanted to know how the merger would impact future sales.
Gaining Market Share in Knees
Matson said the company’s recon growth slowed likely due to weather and increased seasonality. On a constant currency basis, Matson said Zimmer’s recon growth slowed to 4% from 7% in the fourth quarter of 2013. Constant currency knee growth of 5% and hip growth of 2% slowed from 10% and 3%, respectively, from the last quarter of 2014. He believes that Zimmer held recon share in the quarter with modest share gain in knees offsetting modest share loss in hips.
Matson estimates that based on actual results from Biomet, DePuy Synthes, Stryker Corporation and Zimmer, the recon market grew by 4% (constant currency) in the first quarter. He added that he estimates that global knee growth was 5% and that global hip growth was 3% during the quarter.
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This is a fascinating development. In my practice we've seen similar outcomes with the revised protocol. The key differentiator seems to be patient selection criteria. Has anyone else noticed the correlation with BMI thresholds?
Great point. I'd push back slightly on the conclusion, the sample size in the cited study is too small to draw population-level inferences. That said, the directional signal is compelling and worth a larger RCT.
We implemented a similar approach last year. Early results are promising but we're still gathering 12-month follow-up data. Happy to share our protocol if anyone is interested.
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