Wright Medical’s 1Q17 Revenue

Wright Medical reported 1Q17 revenue of US $177.2MM, +4.7% from 1Q16.

ORTHOWORLD estimates 1Q17 segment sales and growth on an as-reported basis, as follows.

Geographic results: U.S. $132.1MM, +6.1%; ex-U.S. $45.0MM, +0.6%

1Q17 performance highlights:

• SIMPLICITI drove 13% growth in U.S. shoulder revenue
• Launched PerFORM Reversed Glenoid implant with porous metal fixation; most product availability in 1H will support existing business; should accelerate revenue in 2H17
• Commenced staged rollout of BluePrint 3D Planning software
• “Technologically advanced” products in U.S. lower extremities and biologics, e.g. AUGMENT, SALVATION limb salvage and total ankles, grew at 28% YoY; core lower extremities and biologics growth was “significantly lower” primarily due to anticipated revenue dis-synergies
• U.S. total ankle revenue +18% vs. 1Q16
• Biologics growth affected by lower sales of non-AUGMENT-products, which are directly related to core foot/ankle procedures that were slower in 1Q (note that this does not include total ankle)
• Growth rate declines partially attributed to salesforce expansion: added 115 U.S. sales reps (30 more than originally anticipated), 100 of which cover U.S. lower extremities (of that, half are new hires)
• Medicare’s FY2018 Inpatient Prospective Payment System Proposed Rule indicates a proposed $7,000 increase in payment for total ankle replacement (would be effective in 4Q17, if enacted)
• Remaining 2017 launches include SALVATION line extensions (2H), INVISION Revision Ankle (expected 3Q), ORTHOLOC 3Di Ankle Fracture LP system (expected 4Q)

Sources: Wright Medical Group, Inc.; ORTHOWORLD estimates

An ORTHOWORLD Observation:

Our 2016 estimates place Wright Medical’s share of the Extremities Reconstruction market at 16%, #3 behind DePuy Synthes and Zimmer Biomet and about three times the size of Stryker’s #4 share.

In Trauma, our estimates place Wright Medical at #5, behind Smith & Nephew in 2016 by about $155 million.