Zimmer Expands Knee Product Offering - Analyst Blog
March 22 2013 - 12:15PM
Zacks
Recently, leading orthopedic
medical device giant Zimmer Holdings (ZMH)
launched a new injectable gel to treat osteoarthritis of the knee.
This single injection medicine, known as Gel-One Cross-linked
Hyaluronate, is expected to be a big relief for the knee arthritis
patients, helping them improve knee join function and restore
mobility.
The company is optimistic about
this new invention, which is expected to procure better result in
the challenging US knee market. According to Zimmer, Gel-One
Hyaluronate will act as a supplement to natural synovial fluid.
This product is particularly effective on patients who are not
responsive to conventional treatments like non-pharmacologic
therapy, non-steroidal anti-inflammatory drugs (NSAIDs) or simple
analgesics such as acetaminophen.
We are also encouraged to find the
result of a clinical study, which showed efficacy of Gel-One
Hyaluronate over a Phosphate Buffered Saline control (PBS). Result
showed that, on an average, there is almost 40% reduction in pain
from baseline in patients who are being treated with Gel-One
Hyaluronate.
Zimmer is making continuous efforts
to strengthen its pipeline with the launch of new products under
the reconstructive implant division. Moreover, the ongoing shift in
demand to premium products, such as Prolongand Vivacit-EHighly
Crosslinked Polyethylene, Trabecular MetalTM Technology products,
high-flex knees, porous hip stems and the introduction of patient
specific devices, is expected to continue to positively affect
sales growth. Along with the focus on driving Reconstructive and
emerging businesses, Zimmer is exploring opportunities to expand
its reach into early intervention products.
The company should benefit from
favorable long-term trends that point toward sustained growth
driven by obesity, wear and tear of joints from more active
lifestyles, growth in emerging markets, new material technologies,
advances in surgical techniques and proven clinical benefits of
joint replacement procedures.
More importantly, the percentage of
population over age 65 in the U.S., Europe, Japan and other regions
is expected to nearly double by the year 2030. In the U.S., the
oldest baby boomers are now pushing retirement age. We believe that
Zimmer is benefiting from this aging demography since knee and hip
joints tend to wear out with age and therefore require
replacement.
However, the intense competition in
the orthopedic market and pricing pressure remain areas of concern.
The company faces tough competition from players such as
Stryker Corporation (SYK).
Zimmer currently carries a Zacks
Rank #3 (Hold). However, other medical device stocks worth a look
are Given Imaging (GIVN) and Cytokinetics
Incorporated (CYTK). Both these stocks carry a Zacks Rank
#1 (Strong Buy).
CYTOKINETCS INC (CYTK): Free Stock Analysis Report
GIVEN IMAGING (GIVN): Free Stock Analysis Report
STRYKER CORP (SYK): Free Stock Analysis Report
ZIMMER HOLDINGS (ZMH): Free Stock Analysis Report
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