Wright Medical Reports 4Q17, 2017 Revenue

Wright Medical (WMGI) reported 4Q17 revenue of US $217.6MM, +12.7% from 4Q16, and 2017 revenue of $745.0MM, +7.9% vs. 2016–the maximum of its revenue range that was revised down in 3Q17.

ORTHOWORLD estimates for segment sales and growth follow.

Outstanding U.S. upper extremities growth was a primary driver, at +29% YoY with launch of the PERFORM Reversed glenoid and continued contribution from SIMPLICITI. PERFORM plus growing adoption of BLUEPRINT surgical planning technology should provide more growth in 2018. (Recall that WMGI acquired IMASCAP, the company behind BLUEPRINT, right at the end of 2017.)

BLUEPRINT will be monetized though increased use of WMGI products—it only works with Wright products. The software provides pre- and inter-op assistance in complex shoulder procedures, and leadership expects that it could follow a similar path as PROPHECY technology in lower extremity. (PROPHECY is used in 70% of all of Wright’s total ankle cases, and in 50% of total ankles performed in the U.S.)

WMGI logged no benefit in 4Q from its expansion of the U.S. lower extremities salesforce. Further, a supply constraint—related to a third-party coating vendor—impacted total ankle production; that is said to be fully addressed now, and total ankle revenue grew 10% in 4Q. Caring for the core foot/ankle business—which has faced the addition of multiple small new players in recent years—is a priority for 2018. Support will come from new products, like those for minimally invasive surgery (especially good for ASCs), ORTHOLOC ankle fracture and small bones fracture systems.

Leadership cited 2018 revenue guidance in a range of $800.0MM to $812.0MM, which doesn’t include any impact from a U.S. launch of AUGMENT injectable—for which there is no update, other than it is still expected to be approved—but with an unpredictable timeline. It was also noted that upper extremities revenue will be higher in 1H18 than 2H, in the face of tougher comps and increased competition from stemless shoulders (like Zimmer Biomet’s Sidus, for which U.S. launch happens in 1Q18—but having sold against Sidus in Europe, WMGI is remaining confident in SIMPLICITI).

2018 launches include ongoing rollouts like INVISION revision ankles, ORTHOLOC ankle fracture plates and line extensions to SALVATION limb salvage, as well as the PROPHECY INVISION revision ankle (2Q18), MIS devices mentioned above (2H18) and INFINITY BIOFOAM 3D titanium coating (4Q18).

Sources: Wright Medical Group; ORTHOWORLD estimates