Dive Brief:
- Stryker said sales of its Mako robotic surgery system and increased utilization of the technology in both hip and knee procedures drove implant market share gains for the company in the second quarter.
- The limited introduction this year of rival Zimmer Biomet’s Rosa robot hasn't slowed Mako’s momentum, Katherine Owen, vice president of strategy and investor relations at Stryker, told analysts on the earnings call Thursday, according to a transcript.
- Stryker reported a 9.9% boost in second-quarter net sales and raised both sales and earnings forecasts for the full year. The MedSurg business paced overall sales growth with an 11.1% rise, helped by higher unit volumes.
Dive Insight:
Launched in 2017, the Mako system has gained traction with orthopaedic surgeons, who use it to perform total knee, total hip and partial knee replacements. More than 18,000 total knee procedures were performed using the system in the second quarter, up 80% from a year ago, Owen said. Altogether, about 27,000 Mako procedures were performed in the quarter.
The robot is lifting orthopaedic division sales, which increased 5.6% on an organic basis, led by knees, while hips also accelerated, Stryker said. More than 700 Mako systems have been installed globally to date, with 44 sold in the second quarter.
Jefferies analysts called the quarter strong, noting Stryker boosted its sales growth full year guidance to 7.5% to 8%. The medtech had previously forecast of 6.8% to 7.5%.
Still, Needham analysts said they remain "concerned that acquisition dilution could prevent it from delivering" on its guidance for improving operating margins.
The Kalamazoo, Michigan-based company will face some pressure in the near future, however, as Zimmer Biomet aims to expand adoption of its Rosa robotic system.
Stryker CEO Kevin Lobo said on the earnings call that the strong second quarter reflected broad-based momentum across the company’s portfolio of medical and surgical products, orthopaedics, and neurotechnology and spine devices. Orthopaedics net sales increased 3.7% to $1.3 billion, MedSurg sales rose 11.1% to $1.6 billion, and neurotechnology and spine sales climbed 18.9% to $800 million.
In spine, Stryker is focused on integrating its $1.4 billion acquisition of device maker K2M, which closed late last year. Owen said the company is on track to meet full-year growth targets for the business.
Net earnings rose 6.2% to $480 million in the quarter. On a per-share basis, earnings of $1.26 were up 5.9%. Adjusted earnings increased to $752 million, up 12.2%, or $1.98 per share.
Based on its second-quarter performance, the company forecast adjusted earnings in the range of $8.15 to $8.25 per share, up from $8.05 to $8.20 per share forecast previously.
