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Product / Company Performance

Conformis Continues Slide Due to Aetna Coverage Denials -

Conformis reported 3Q19 revenue of USD $17.3MM, -40.3% vs. 3Q18.


  • The drastic reduction to growth in knees is primarily due to the one-time $10.5MM royalty settlement received from Smith+Nephew in 3Q18; however, product revenue for the quarter was down -6.7% due to Aetna coverage denials
  • While Aetna has not yet revised their policy, company leadership expects an updated policy to be issued prior to year-end
  • Within the quarter, Conformis submitted a full commercial launch dossier to FDA for the iTotal Hip (full commercial release is expected in late December 2019) and launched the iTotal Identity total knee in limited clinical release
  • In October 2019, the company entered a strategic partnership with Stryker to produce patient specific 3D-printed instruments for the Triathlon Knee; Conformis leadership believes that the partnership will bring an opportunity for incremental revenue and validates the strength of their intellectual property
  • ORTHOWORLD projects Conformis’ full year 2019 revenue of $79.6MM, -11.3% vs. 2018


ORTHOWORLD estimates segment sales and growth on an as-reported basis, as follows ($MM).

  3Q19 3Q18 $ Chg % Chg
Joint Replacement Knees $16.9 $28.8 -$11.9 -41.2%
Joint Replacement Hips $0.4 $0.2 $0.2 78.1%
Total $17.3 $29.0 -$11.7 -40.3%
  9Mo 19 9Mo 18 $ Chg % Chg
Joint Replacement Knees $56.2 $67.5 -$11.4 -16.8%
Joint Replacement Hips $1.4 $0.2 $1.2 534.7%
Total $57.5 $67.7 -$10.2 -15.1%

ORTHOWORLD estimates product sales by geographic region as follows ($MM).

  3Q19 3Q18 $ Chg % Chg
US $15.1 $16.3 -$1.1 -6.9%
Ex-US $2.0 $2.1 -$0.1 -4.5%
Total $17.1 $18.3 -$1.2 -6.7%

Net earnings are as follows.

  Amt % of Sales
Sales $17.3  
   Cost of Sales -$9.7 55.9%
   Sales and Marketing -$6.2 35.6%
   R & D -$3.2 18.3%
   General and Admin -$5.2 29.9%
   Other -$1.8 10.7%
Net Earnings -$8.7 -50.3%

Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.

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