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Conformis reported 4Q20 orthopedic revenue of USD $16.7 million, -16% vs. 4Q19 with full-year 2020 revenue of $68.8 million, -11.2% vs. 2019. Product revenue for 2020 declined -23.6%, while royalty revenues were spared a similar decline due to a $9.6 million settlement with Zimmer Biomet regarding patient specific instruments.
In addition to COVID-related procedure cancelations, Conformis faced additional headwinds due to surgeons preferring less lead time between appointment booking and surgery, resulting in lost cases due to the longer lead time involved with personalizing implants. Conformis also noted that surgeons are deferring new technology evaluations during this time, which offset some momentum in the company’s hip business.
Despite these challenges, Conformis is bullish about its prospects. CEO Mark Augusti said, “Our anticipated new standard knee offering is being designed to provide a lower-cost alternative to hospitals, outpatient surgery centers and ASCs while still taking full advantage of years of patient data collected through our unique business model. We are confident that the new knee will launch in the second half of 2021 and believe it will be a material game changer for us.”
The company is also nearing the end of the developmental stage of its partnership with Stryker. Once regulatory clearance is received, Conformis will start supplying patient specific instruments (PSI) to Stryker. Leadership reiterated that Stryker will control the commercialization and marketing aspects of the agreement, but Mr. Augusti indicated that he thought PSI could be used with 10% or more of Stryker’s knee volume.
Conformis leadership doesn’t appear to be sold on the economic or clinical benefits of robotics, but intends to explore its options in the enabling technology area with funds from its February 2021 stock offering.
“We also intend to get started with some long term game changer projects. For instance, robotics is gaining interest across orthopedics. We have questions about the ultimate value of robotics and are not aware of any significant clinical result that have been published which justify the incremental cost. While we currently believe that nothing is better than a personalized implant, this recent capital infusion will allow us to proactively evaluate how robotics might complement our personalized approach to arthroplasty.” – Conformis CEO Mark Augusti
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 4Q20 | 4Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement Knees | $16.0 | $19.3 | ($3.2) | (16.7%) |
| Joint Replacement Hips | $0.6 | $0.6 | $0.0 | 5% |
| Total | $16.7 | $19.9 | ($3.2) | (16%) |
| FY20 | FY19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement Knees | $66.2 | $75.4 | ($9.2) | (12.2%) |
| Joint Replacement Hips | $2.6 | $2.0 | $0.5 | 26.4% |
| Total | $68.8 | $77.4 | ($8.7) | (11.2%) |
Geographic Sales
| 4Q20 | 4Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $14.6 | $17.4 | ($2.8) | (15.9%) |
| OUS | $2.1 | $2.5 | ($0.4) | (16.9%) |
| Total | $16.7 | $19.9 | ($3.2) | (16%) |
| FY20 | FY19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $61.0 | $67.9 | ($7.0) | (10.3%) |
| OUS | $7.8 | $9.5 | ($1.7) | (17.8%) |
| Total | $68.8 | $77.4 | ($8.7) | (11.2%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $16.7 | |
| Cost of Sales | $8.9 | 53.3% |
| Selling and Marketing | $6.2 | 37.3% |
| General and Admin | $5.9 | 35.3% |
| R & D | $3.3 | 20% |
| Other | ($1.1) | (6.3%) |
| Net Earnings | ($6.6) | (39.7%) |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
Conformis reported 4Q20 orthopedic revenue of USD $16.7 million, -16% vs. 4Q19 with full-year 2020 revenue of $68.8 million, -11.2% vs. 2019. Product revenue for 2020 declined -23.6%, while royalty revenues were spared a similar decline due to a $9.6 million settlement with Zimmer Biomet regarding patient specific instruments.
In addition...
Conformis reported 4Q20 orthopedic revenue of USD $16.7 million, -16% vs. 4Q19 with full-year 2020 revenue of $68.8 million, -11.2% vs. 2019. Product revenue for 2020 declined -23.6%, while royalty revenues were spared a similar decline due to a $9.6 million settlement with Zimmer Biomet regarding patient specific instruments.
In addition to COVID-related procedure cancelations, Conformis faced additional headwinds due to surgeons preferring less lead time between appointment booking and surgery, resulting in lost cases due to the longer lead time involved with personalizing implants. Conformis also noted that surgeons are deferring new technology evaluations during this time, which offset some momentum in the company’s hip business.
Despite these challenges, Conformis is bullish about its prospects. CEO Mark Augusti said, “Our anticipated new standard knee offering is being designed to provide a lower-cost alternative to hospitals, outpatient surgery centers and ASCs while still taking full advantage of years of patient data collected through our unique business model. We are confident that the new knee will launch in the second half of 2021 and believe it will be a material game changer for us.”
The company is also nearing the end of the developmental stage of its partnership with Stryker. Once regulatory clearance is received, Conformis will start supplying patient specific instruments (PSI) to Stryker. Leadership reiterated that Stryker will control the commercialization and marketing aspects of the agreement, but Mr. Augusti indicated that he thought PSI could be used with 10% or more of Stryker’s knee volume.
Conformis leadership doesn’t appear to be sold on the economic or clinical benefits of robotics, but intends to explore its options in the enabling technology area with funds from its February 2021 stock offering.
“We also intend to get started with some long term game changer projects. For instance, robotics is gaining interest across orthopedics. We have questions about the ultimate value of robotics and are not aware of any significant clinical result that have been published which justify the incremental cost. While we currently believe that nothing is better than a personalized implant, this recent capital infusion will allow us to proactively evaluate how robotics might complement our personalized approach to arthroplasty.” – Conformis CEO Mark Augusti
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 4Q20 | 4Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement Knees | $16.0 | $19.3 | ($3.2) | (16.7%) |
| Joint Replacement Hips | $0.6 | $0.6 | $0.0 | 5% |
| Total | $16.7 | $19.9 | ($3.2) | (16%) |
| FY20 | FY19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement Knees | $66.2 | $75.4 | ($9.2) | (12.2%) |
| Joint Replacement Hips | $2.6 | $2.0 | $0.5 | 26.4% |
| Total | $68.8 | $77.4 | ($8.7) | (11.2%) |
Geographic Sales
| 4Q20 | 4Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $14.6 | $17.4 | ($2.8) | (15.9%) |
| OUS | $2.1 | $2.5 | ($0.4) | (16.9%) |
| Total | $16.7 | $19.9 | ($3.2) | (16%) |
| FY20 | FY19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $61.0 | $67.9 | ($7.0) | (10.3%) |
| OUS | $7.8 | $9.5 | ($1.7) | (17.8%) |
| Total | $68.8 | $77.4 | ($8.7) | (11.2%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $16.7 | |
| Cost of Sales | $8.9 | 53.3% |
| Selling and Marketing | $6.2 | 37.3% |
| General and Admin | $5.9 | 35.3% |
| R & D | $3.3 | 20% |
| Other | ($1.1) | (6.3%) |
| Net Earnings | ($6.6) | (39.7%) |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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ME
Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
