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Product / Company Performance

Integra LifeSciences Reports 4Q18 Orthopedic Revenue of $25.4MM, -8.1% vs. 4Q17 -

By Mike Evers, ORTHOWORLD

Integra LifeSciences posted 4Q18 orthopedic revenue of USD $25.4MM, -8.1% vs. 4Q17, with 2018 full year revenue of $96.7MM, -4.2% vs. 2017. The company saw growth in shoulder and ankle products, offset by declines in its lower fixation portfolio. Leadership said that it is taking longer than anticipated to realize benefits from the realignment of the Extremity Orthopedics team, but expects to deliver 5% to 7% ($101.5MM to $103.5MM) growth in that segment in 2019.

In addition to further integration of the realigned commercial team, Integra has several new orthopedic products planned for 2019, including the Panta II fusion nail, expanded internal ankle fixation offerings and the full market release of a new glenoid baseplate designed to expand the Titan Shoulder System. The company also expects to benefit from a full year of commercial availability of the XT Revision Ankle, designed for revision of any commercially available primary total ankle replacement system.

Integra plans to greatly expand its access to the shoulder market by introducing short stem and stemless shoulder devices. The products are expected to be commercially available within 24 months and would open two-thirds of the shoulder market where the company currently has no offerings.

The first quarter of 2019 is viewed as a transitionary window to orthopedics segment growth. Company CFO Glenn Coleman said, “We’ve got new products, stable channels, territories filled and starting to see some signs of progress here. But again, we’re not counting on seeing any growth until Q2 of 2019.” As leadership noted, part of the challenge is that orthopedics requires greater intimacy and stronger relationships for effective selling compared to other segments, and it has taken the realigned teams some time to gain their footing.

4Q18 and FY18 segment sales and growth on an as-reported basis are as follows.

  4Q18 4Q17 $ Change % Change
Joint Replacement Extremities $10.2 $10.5 -$0.3 -3.2%
Trauma $15.3 $17.2 -$1.9 -11.0%
Total  $25.4 $27.7 -$2.2 -8.1%
  FY18 FY17 $ Change % Change
Joint Replacement Extremities $37.7 $37.4 $0.3 0.8%
Trauma $59.0 $63.5 -$4.6 -7.2%
Total  $96.7 $101.0 -$4.3 -4.2%

Net earnings in 4Q18 for the company, inclusive of all revenue, are as follows.

4Q18 Amount ($MM) % of Sales
Sales $383.3  
   Cost of Sales -$146.5 38.2%
   Administrative -$20.3 5.3%
   R&D -$177.2 46.2%
   Other -$14.2 3.7%
Net Earnings  $25.1 6.6%

 

Sources: Integra LifeSciences; ORTHOWORLD estimates.

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

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