By Mike Evers, ORTHOWORLD
Continued strength in sports medicine and above-market growth in knees and hips before currency headwinds brought modest growth to Smith & Nephew in 2Q19.
- Knee sales were driven by the JOURNEY II and LEGION Revision knee systems, with the ex-US rollout of the JOURNEY II generating positive results
- Hip sales increased in the low single digits before currency headwinds, driven by the POLAR3 Total hip system and the REDAPT revision hip
- The company received positive outcomes data for their OXINIUM bearing surface, with a 9.88% reduction in post-acute 90-day episode of care average cost
- Trauma saw continued demand for the EVOS system, and within the quarter the company launched the CONQUEST FN system to treat femoral neck factures
- Sports medicine sales grew on strong U.S. sales of shoulder products, but was offset somewhat by continued softness in resection products
- Launched NAVIO 7.0 in July, reducing the number of steps in the current workflow by 40%
- Closed the acquisition of the Brainlab Orthopedic Joint Reconstruction business
- Announced the acquisition of Atracsys to integrate the fusionTrack 500 optical tracking camera into Smith & Nephew’s next-generation robotics platform
- The company is committed to investment through both R&D and acquisitions by leveraging their strong balance sheet
Performance by Segment
ORTHOWORLD estimates segment sales and growth on an as-reported basis, as follows ($MM):
| |
2Q19 |
2Q18 |
$ Chg |
% Chg |
| Joint Replacement |
$447.1 |
$443.0 |
$4.1 |
0.9% |
| Knees |
$278.0 |
$274.0 |
$4.0 |
1.5% |
| Hips |
$156.0 |
$156.0 |
$0.0 |
0.0% |
| Extremities |
$13.1 |
$13.0 |
$0.1 |
0.9% |
| Trauma |
$104.9 |
$105.0 |
-$0.1 |
-0.1% |
| Sports Medicine |
$340.0 |
$330.0 |
$10.0 |
3.0% |
| Total |
$892.0 |
$878.0 |
$14.0 |
1.6% |
| |
1H19 |
1H18 |
$ Chg |
% Chg |
| Joint Replacement |
$887.1 |
$882.7 |
$4.3 |
0.5% |
| Knees |
$553.0 |
$546.0 |
$7.0 |
1.3% |
| Hips |
$308.0 |
$311.0 |
-$3.0 |
-1.0% |
| Extremities |
$26.1 |
$25.7 |
$0.3 |
1.3% |
| Trauma |
$210.9 |
$209.3 |
$1.7 |
0.8% |
| Sports Medicine |
$673.0 |
$657.0 |
$16.0 |
2.4% |
| Total |
$1,771.0 |
$1,749.0 |
$22.0 |
1.3% |
Sales by Geographic Region
ORTHOWORLD estimates geographic sales and growth as follows ($MM):
| Geographic Region |
2Q19 |
2Q18 |
$ Chg |
% Chg |
| US |
$421.5 |
$400.1 |
$21.4 |
5.4% |
| Ex-US |
$470.5 |
$477.9 |
-$7.4 |
-1.6% |
| Total |
$892.0 |
$878.0 |
$14.0 |
1.6% |
Net Earnings Data
Net earnings are as follows, inclusive of all Smith & Nephew revenue.
| |
Amt |
% of Sales |
| Sales |
$2,485.0 |
|
| Cost of Sales |
-$648.0 |
26.1% |
| R & D |
-$139.0 |
5.6% |
| Selling and Admin |
-$1,279.0 |
51.5% |
| Other |
-$110.0 |
4.4% |
| Net Earnings |
$309.0 |
12.4% |
Sources: Smith & Nephew; ORTHOWORLD estimates.
Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.
