All the major orthopedic companies have reported first quarter sales. How did the Big Six (soon to be Big Five) fare after a great fourth quarter of 2014?
First Quarter Ortho Decelerates, Biomet Tops Growth
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Bob Hopkins, senior analyst at Bank of America/Merrill Lynch did the numbers. But Hopkins cautions that he hesitates to read too much into quarterly market share assumptions because companies only report revenue, not unit data. He says this can be misleading because relative mix cycles can vary meaningfully.
Biomet Grew 7.3%
Overall, the hip and knee market grew 3.4% in the first quarter. Biomet, Inc.’s revenue grew by 7.3%. Hopkins said first quarter sales are down about 2.5 points from a very strong fourth quarter of 2013, “but about in line with hip/knee growth for all of 2013.”
Stryker Takes Hips
In hips, Stryker Corporation showed the highest revenue increase (4.9%), while in knees, Biomet’s revenue rose 9.4%. While overall revenue for the hip market rose 2.7%, only Biomet (4.3%) and Stryker beat the average. Overall revenue for the knee market rose 4%. Only Zimmer Holdings, Inc. (5%) joined Biomet in beating that average.
That makes Biomet the only contestant to beat both averages.
The sequential decline in growth in the quarter, according to Hopkins, was actually on easier comps, and was helped a bit by selling day comparisons (half a day). Weather and seasonality were obvious offsetting negatives.
Hopkins said comps get significantly tougher throughout 2014 and price cuts in Japan kick in, but weather and seasonality ease as headwinds. “Overall we think the Q1 decline was relatively in-line and we remain comfortable with a market growth outlook for hips/knees in the 3-4% area.”
U.S. Decline Drove Deceleration
Importantly, notes Hopkins, U.S. declines drove all of the sequential first quarter growth deceleration in global hips/knees combined as Europe appears to be rebounding.
Overall, Hopkins says for the U.S. players, global recon market share in the quarter was fairly stable compared to last year’s first quarter when adjusting for comps and selling days.
Within the U.S., Stryker has gained share in the hip market at the expense of Smith & Nephew and Zimmer, while in knees, Biomet appeared to gain share although their print did not include March.
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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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