DePuy Synthes’ First Quarter, Steady and Robot Deal With Google

Johnson & Johnson’s (J&J) DePuy Synthes’ reported revenue of $2.33 billion was down 3.8% in the first quarter of 2015. Excluding the 5.9% negative currency impact of a strong dollar, sales were up 2.1%.

Utilization Rates, Insured, Up

Company executives told analysts on April 14, 2015, that they saw a third consecutive quarter of sequential and year-over-year improvement in hospital utilization rates and are encouraged by the signs that the company is seeing in U.S. volumes. The government recently reported that about nine out of ten Americans now have health insurance.

Growing Sales

On a constant currency basis, hips were up 3% (2% in U.S.), knees up 1% (2% in U.S.) spine down 2% (down 4% in U.S.) and trauma up 3% (flat in U.S.).

The company acknowledged losing spine share in the quarter to smaller players. Trauma growth was driven by 7% growth outside the U.S. due to strong volume growth including a tender. Hip growth of 3% was driven by strong volume growth partially offset by continued pricing pressure. Primary stem platform sales were a major contributor to the results.

The increase in knee sales was due to strong sales of Attune. Outside the U.S. knees were down 1% with growth in Asia Pacific and Latin America offset by lower sales in Europe. Slowing elective procedure volume primarily in the U.K contributed to the soft sales in Europe.

J&J, Google and Robots

There was interesting robotic news from J&J during the quarter with the announcement in March of a definitive agreement to collaborate with Google Life Sciences to advance development of a surgical robotics program. J&J’s CFO Dominic Caruso said the company would expect this collaboration would take “a couple” of years to come to the market with the new type of robotic surgery that they think will “dramatically revolutionize surgery.”