ConforMIS (NSDQ:CFMS) said yesterday it resumed full production of its knee implants which had been on hold due to a recall, and released its Q3 earnings, topping rev but missing earnings per share expectations.
ConforMIS reported losses of $17.1 million, or 45¢ per share, on sales of $13.5 million for the 3 months ended September 30. That amounts to a 64.6% rise for losses on sales growth of 12.4% compared with the same period in 2014.
Even after adjusting to exclude 1-time items, losses per share were 45¢, higher than analysts expectations of 36¢ per share. ConforMIS topped revenue expectations of $13.3 million by less than $200,000.
Shares have risen a slight 1.8% today to $21 as of 11:41 a.m. EST in response to the news.
“The 3rd quarter of 2015 was challenging in view of the voluntary recall, but it turned into a productive quarter with an increase in product revenues of 17% year-over-year on a constant currency basis. We successfully navigated an unexpected production issue within the timeframes that we communicated and returned to full operations in October. While the voluntary recall in the 3rd quarter affected our sales and gross margin as expected, we anticipate this will reverse course in the fourth quarter now that we have resumed full production. We also continued to expand our surgeon user base in the 3rd quarter while the voluntary recall was ongoing. We believe this is a direct reflection of the clinical superiority of our products which also results in the strong loyalty shown by our existing surgeons. Additionally, the limited launch of our new knee product, the iTotal PS, is progressing favorably, and the company anticipates a full commercial launch of that product at the American Academy of Orthopedic Surgeons in March of 2016, as originally planned,” CEO Dr. Philipp Lang said in a press release.
Last month, ConforMIS said it expected to get its customized knee implants back on line within the month, after an independent investigation of the problem behind the recall of some 950 of its customized knee implants found no further cause for concern.
Last August Bedford, Mass.-based ConforMIS said it had received 3 complaints of moisture on the patient-specific instrumentation used with the implants, although all 3 procedures went off without a hitch. The recall affected its iUni, iDuo, iTotal CR and iTotal PS devices made at a new plant in nearby Wilmington, Mass., between July 18 and August 28. The news prompted ConforMIS to pare its outlook for the rest of the year, leading investors to push CFMS share prices down 19%.
ConforMIS said an independent testing laboratory found that the moisture was ethylene glycol residue that “posed no significant health hazard to patients.” No residue was found on any of the implants tested by the lab, the company said.