Stryker (NYSE:SYK) said it’s planning to launch a trial during the 1st half of this year to evaluate its newly acquired Mako robotic surgery platform in full-knee replacement procedures.
Stryker, which also announced its 4th-quarter and 2013 results after the market closed yesterday, said it’s also working to integrate its existing orthopedic implants into the Mako system, but was chary of providing specifics.
"Two areas of initial focus, which we are currently evaluating, are enabling Stryker-marketed implants to be put on the robot software and starting the trial for a total knee application. Given the short time since the close, we are not prepared to provide specifics on these 2 items. However, we do anticipate starting the total knee trial in the first half of this year," vice president of strategy & investor relations Katherine Owen told analysts during a conference call. "With close to 20% market share in the unicompartmental knee segment, we believe Mako has demonstrated excellent market acceptance of their partial knee application. However, our analysis suggest there’s a bigger opportunity in total hips and total knees to leverage Stryker’s reconstructive implants. We look forward to sharing more regarding our plans for robotic-assisted surgery later in 2014.
"We were able to share that we expect to start the total knee trial in the 1st half of this year. That is the biggest opportunity that we see for robotic-assisted surgery. We’re going to continue to use our sales and distribution capabilities to build on current indications, but the long-term potential really is around total knees, optimizing total hips and, longer term, the potential to introduce the next generation of implants that aren’t feasible with the current instrumentation," Owen added.
President & CEO Kevin Lobo said Stryker will be aggressive in using the Mako system to pull through sales of Stryker’s existing implants.
"This move was made to really drive market share and become the clear leader in reconstructive surgery. So I would not assume we’re going to be passive about the way that we sell this technology. But surgeons take different times to convert. There are some that will convert very quickly, early adopters. There’s others that will wait a little bit before they’ll start to convert, and there are some that will be very stubborn and want to stick to their tried and proved approaches. So we will have approaches for all types of surgeons," Lobo said. "But without a doubt, we plan to rapidly move the adoption of robotic surgery. This is a big play that we’ve made and we’re not going to be passive about really taking this to the market. Certainly, our implant sales force is extremely excited about being able to sell the implants, so they can be associated with the robots, leveraging their own relationships. So, yes, I wouldn’t assume we’re going to be in a ‘sit-back-and-wait’ mode related to robotics. Again, only 3 weeks since close. But make no mistake, we’re going to be leaning forward."
Q4 results beat Wall Street, but 2013 profits plunge
Stryker reported profits of $386.0 million, or $1.01 per share, on sales of $2.47 billion for the 3 months ended Dec. 31, 2013, for a profit surge of 43.0% on top-line growth of 5.6% compared with Q4 2012. Adjusted to exclude 1-time items, earnings per share were $1.23, a penny ahead of expectations on Wall Street. The sales number beat The Street’s forecast by some $19 million.
But full-year profits came in at $1.01 billion, or $2.63 per share, on sales of $9.02 billion, for a bottom-line slide of 22.5% on 4.2% sales growth. Adjusted EPS came in at $4.23, in line with The Street’s expectation.
"We are pleased with our organic sales growth and operational earnings achieved in 2013. With our broad based product portfolio and commitment to innovation and globalization we are well positioned to build on this momentum in 2014," Lobo said in prepared remarks.
Stryker said it expects to post adjusted EPS of $4.75 to $4.90 on organic sales growth of 4.5% to 6.0% this year.
The news put SYK shares under pressure this morning, with the stock trading at $78.16 apiece as of about 12:30 p.m., down 0.5%.
