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Product / Company Performance

Mako Adoption Helps Drive Stryker to 8.1% Growth in 2Q19 -

By Mike Evers, ORTHOWORLD

 

Stryker leveraged accelerating adoption of their Mako robot and new products like the Trident II hip cup to drive another quarter of above market growth.

 

Quarterly Highlights

  • Key sales drivers included Mako TKA, the 3D-printed Trident II hip cup, increasing Mako utilization for hip procedures and strong sales of shoulder implants.
  • Above-market growth in knees is largely attributable to share taken through Mako placements in competitive accounts, with only minor benefits from sales mix.
  • The integration of K2M completed milestone activities of product training and cross selling within the quarter.
  • Trauma remains impacted by supply chain issues from the first quarter.
  • Instrument sales grew in the double digits for the company. Leadership cautioned that the outsized growth is a transient “extra pop,” although instrument sales for the year are strong overall.

 

Mako Update

  • 44 global installs for the quarter (35 U.S), +12% vs. 2Q18
  • Installed base of over 700 robots, with close to 600 in the U.S.
  • Approximately 27,000 total U.S. Mako procedures in 2Q, +55%
  • Approximately 18,000 U.S. Mako TKA procedures in 2Q, +78%

 

Performance by Segment

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

  2Q19 2Q18 $ Chg % Chg
Joint Replacement $964.8 $921.4 $43.4 4.7%
Knees $525.0 $497.6 $27.4 5.5%
Hips $409.0 $394.9 $14.1 3.6%
Extremities $30.8 $29.0 $1.9 6.4%
Spine $264.3 $190.2 $74.0 38.9%
Trauma $365.7 $359.9 $5.7 1.6%
Sports Medicine $184.4 $174.0 $10.4 6.0%
Orthobiologics $63.7 $58.9 $4.8 8.1%
Other $73.8 $68.0 $5.8 8.5%
Total $1,916.7 $1,772.5 $144.2 8.1%
  1H19 1H18 $ Chg % Chg
Joint Replacement $1,909.9 $1,823.2 $86.7 4.8%
Knees $1,040.4 $987.0 $53.4 5.4%
Hips $804.9 $775.6 $29.3 3.8%
Extremities $64.6 $60.6 $4.0 6.5%
Spine $508.8 $366.9 $141.9 38.7%
Trauma $733.5 $722.6 $11.0 1.5%
Sports Medicine $367.7 $347.6 $20.1 5.8%
Orthobiologics $125.9 $115.4 $10.5 9.1%
Other $152.6 $143.1 $9.5 6.7%
Total $3,798.4 $3,518.8 $279.7 7.9%

 

Sales by Geographic Region

ORTHOWORLD estimates geographic sales and growth as follows ($MM):

  2Q19 2Q18 $ Chg % Chg
US $1,403.0 $1,272.6 $130.4 10.3%
Ex-US $513.7 $500.0 $13.7 2.7%
   EMEA $256.8 $247.5 $9.4 3.8%
   Asia Pacific $205.5 $202.5 $3.0 1.5%
   Other $51.4 $50.0 $1.4 2.7%
Total $1,916.7 $1,772.5 $144.2 8.1%

 

Net Earnings Data

Net earnings, inclusive of all Stryker revenue, is as follows ($MM):

  Amt % of Sales
Sales $3,650.0  
   Cost of Sales -$1,270.0 34.8%
   Selling and Admin -$1,282.0 35.1%
   R & D -$246.0 6.7%
   Other -$372.0 10.2%
Net Earnings $480.0 13.2%

 

Sources: Stryker; ORTHOWORLD estimates.

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

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