The U.S. market for hip and knee reconstructions may have hit bottom, but there’s still a long way to go, according to a survey of orthopedic surgeons.
The investment bank Leerink Swann polled 76 "high volume" orthopedic surgeons, concluding that the knee and hip reconstruction market is "stable" but not "improving," with most knee and hip docs reporting unchanged patient surgery wait times and "only modest expectations in their next 12 month procedure growth forecasts."
The survey "increases our confidence [that] the U.S. ortho recon market has found a bottom, but provides few signs that a significant market growth acceleration is on the near horizon," according to Leerink analysts Richard Newitter and Rick Wise.
The bank increased its market forecast for 2012 from zero growth to about 2%, but stayed tepid on major ortho company stocks.
"With ortho stocks up on average 12% YTD, we question whether ‘stable’ hip/knee trends will be enough to move the stocks sustainably higher from current levels," they wrote.
The results jibe with a recent earnings report from bellwether Biomet Inc., which posted losses of $16.5 million, on sales of $708.9 million, during the 3 months ended Feb. 29, 2012, compared with losses of $11.6 million, on sales of $678 million, during the same period last year. The company’s modest 4.6% top-line growth was bolstered by a 16% boost in sports, extremities and trauma sales and 5% increase in large joint reconstruction revenues.
Surgeons polled in the Leerink survey also reported continued pricing pressures on implants, with 40% indicating that over the past 6 months implant prices have been declining and 21% saying they’ve experienced reimbursement difficulties.
"The majority of physicians in our survey have not noticed any significant changes in insurer practices, or saw [sic] a decrease in reimbursement push back efforts. But it is a trend that bears watching and 1 we will be keeping a closer eye on in future quarters," the analysts wrote.
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