Stryker (NYSE:SYK) CEO Kevin Lobo told an audience at the J.P. Morgan Healthcare conference this morning that its prior guidance for 2013 still holds true and provided a peek at the blockbuster Mako Surgical acquisition the medtech company closed 3 weeks ago.
Organic revenue growth is still expected to be between 4.4% and 5.5%, Lobo said today in San Francisco, with adjusted earnings per share coming in the $4.20-$4.26 range.
Stryker had $5.14 billion in net cash as of Sept. 30, 2013, he said.
"Even after paying for Mako, we are still in a health net cash position," Lobo said.
Stryker closed the $1.7 billion acquisition Dec. 17, 2013. Today Lobo said the companies have spent the last few weeks "actively working together."
"We see this as a transformational opportunity within orthopedic surgery," he said. "We’re very excited about being able to gain share by providing consistent, reproducible procedures as well as outcomes. There is a lot of variation today in the way procedures are done in orthopedics. Mako proved with the [unicompartmental knee] that they can take market share. They took 17% of the market within 4 years, and Mako was a company nobody had heard of 4 years ago."
The initial focus will be on making Stryker’s hip and knee implants compatible with the Mako robot, he added. Down the road Stryker will investigate other applications for the technology, Lobo noted.
"Our goal is obviously to take our implants and make them compatible with the robot. We’ve heard, through our surveying, that that’s 1 of the key barriers. People like the idea of robotics and what it enables, but they were unsure about using it on an implant," he said. "But moreover, we look at actually being able to have other procedures. Total knee is certainly within our sights, it’s something that we’re thinking about. … For the short term, we’re definitely focused on the uni-knee and hip applications. Those are the near-term focus. But certainly, if you look at the shoulder procedure, that’s a difficult procedure to do. Spine is an area. So over time you can see that robotics, it just makes sense that it will enable more consistent, more reproducible procedures. But it’s early for us. We just closed the deal 3 weeks ago."
