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Product / Company Performance

Wright Medical Reports 4Q18 Revenue of $238.1MM, +9.4% vs. 4Q17 -

By Mike Evers, ORTHOWORLD

Wright Medical reported 4Q18 revenue of USD $238.1MM, +9.4% vs. 4Q17, with 2018 full year revenue of $836.2MM, +12.2% vs. 2017. The company expects to keep positive momentum into 2019 and provided guidance in the range of $954MM to $956MM, with the recently acquired Cartiva accounting for a projected $47MM.

The company’s success in 2018 was driven largely by continued shoulder growth supported by the launch of the PERFORM Reversed Glenoid and SIMPLICITI shoulder system. Wright Medical feels that the top position in shoulders is “well within our reach,” as it has consistently closed the market share gap over the last several years. With a growing product portfolio coupled with the BLUEPRINT enabling technology, the company believes that it has all the pieces in place to soon be the top player in the shoulder market.

Wright Medical’s lower extremities business (the company reports both joint replacement and trauma products in the same segment) exhibited strong growth, particularly in the second half of 2018. This success was driven by improvements in the salesforce, new products like PROstep and additional building of Wright’s outpatient business. Cartiva exceeded expectations by contributing $9.5MM to Wright’s lower extremity business in 4Q. The company hopes to develop Cartiva beyond a single product into a platform technology. An FDA investigational device exemption is currently ongoing for use of Cartiva synthetic cartilage in thumb joints.

Wright had success in the biologics segment, an area where many companies struggled in 2018, through the ongoing rollout of the AUGMENT Injectable. The company has received positive market feedback on the product and considers it, along with Cartiva, to be a platform technology that can sustain high levels of growth for the next several years.  

Key components of Wright’s extremity business are their enabling technologies, PROPHECY (lower extremities) and BLUEPRINT (upper extremities). The company is focused on expanding BLUEPRINT with additional modules and easier to use interfaces as it drives usage rates from the current 40% of shoulder cases to a goal of 70%. Asked if the company is interested in expanding into robotics, Wright Medical CEO Bob Palmisano said, “We’ve made our bet on software as enabling technology because it’s more flexible and it’s certainly less expensive. We think that having a very flexible technology that can be used very easily for planning purposes, intraoperatively using augmented reality and artificial intelligence gives the physician the best of all worlds.”

ORTHOWORLD estimated segment sales and growth on an as-reported basis:

  4Q18 4Q17 $ Change % Change
Joint Reconstruction Extremities $116.7 $98.7 $18.1 18.3%
Trauma $84.5 $84.0 $0.5 0.6%
Sports Medicine $5.5 $6.3 -$0.8 -13.3%
Orthobiologics $31.4 $28.6 $2.8 9.8%
Total  $238.1 $217.6 $20.5 9.4%
  FY18 FY17 $ Change % Change
Joint Reconstruction Extremities $408.5 $338.3 $70.2 20.8%
Trauma $298.8 $282.9 $15.9 5.6%
Sports Medicine $20.1 $23.2 -$3.1 -13.3%
Orthobiologics $108.8 $100.6 $8.2 8.1%
Total  $836.2 $745.0 $91.2 12.2%

Revenue by geographic region:

Geographic Region 4Q18 4Q17 $ Change % Change
US $181.6 $162.56 $19.0 11.7%
Ex-US $56.5 $55.05 $1.5 2.7%
Total $238.1 $217.6 $20.5 9.4%

Net earnings:

4Q18 Amount ($MM) % of Sales
Sales $238.1  
   Cost of Sales -$49.1 20.6%
   General and Admin -$160.7 67.5%
   Other -$45.4 19.0%
   R & D -$16.7 7.0%
Net Earnings -$33.8 -14.2%

 

Sources: Wright Medical Group; ORTHOWORLD estimates.

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

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