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Top Companies Report



A comprehensive look at the biggest worldwide orthopedic manufacturers



Orthopedic Industry Hits Its Stride, Comes Into Its Own



In our first ever in-depth report on the top orthopedic companies, it’s clear that this industry has been enjoying major success over the years as a result of its innovation and savvy business practices. With the orthopedic market estimated to reach $23 billion by the end of 2006, the strides are enviable to any industry.

Much of this success is due to the patient population. Whether it’s the aging boomer population, the fattening of America (and beyond) producing stressed joints or younger, more active generations demanding top-quality care as soon as a hip or knee becomes too painful, these consumers are lapping up the latest orthopedic advances in droves. Today’s surgeons are driving trends as well, since they are more willing to grant surgery with the knowledge that newer technology is bringing with it pain relief and longer-lasting materials. According to the American Academy of Orthopaedic Surgeons, the demand for joint replacements will only grow greater in the next 25 years.

While any given analyst can speculate on where the industry is headed—thanks to subpoenas, acquisitions and changing reimbursement (among myriad other issues)—orthopedic manufacturers seem ready to take on the ebb and flow of the market and are formulating their strategies for continuing their upward momentum to success.

As this report shows, acquisitions are a key strategy for developing a strong range of product portfolios. Between 1997 and 2003, approximately seven acquisitions occurred annually in this industry. The momentum significantly increased in 2004 and 2005, nearly quadrupling for the former year and more than doubling in the latter year. In 2006, the trend continues, as detailed in this report.

A note about the numbers in this report: We based rankings on total orthopedic-related net sales for 2005 (and additionally included total sales for companies that have other divisions). Public documents and consultations with company officials helped us compile this comprehensive report, which examines factors that led to a company’s success or challenge. Product introductions (or recalls), acquisitions, legal issues and market-segment shares all are included for your knowledge.

We welcome comments about this report as well as any suggestions for improving it next year.

The ODT Staff



TOP 10 ORTHOPEDIC DEVICE MANUFACTURERS

1. DePuy $3.8B
2. Zimmer $3.3B
3. Stryker $2.9B
4. Synthes $2.1B
5. Biomet $1.9B
6. Medtronic $1.8B
7. Smith & Nephew $1.2B
8. Aesculap $1B
9. ConMed Corporation $339M
10. Wright Medical $319M


1. DePuy Orthopaedics


$3.8 Billion

KEY EXECUTIVES:


T.J. Sullivan, DePuy Orthopaedics President
G. P. Fischetti, DePuy Spine President
Michel Paul, DePuy Mitek President
William C. Weldon, Chairman and CEO Johnson & Johnson
Robert J. Darretta, Vice Chairman and CFO Johnson & Johnson
Thomas M. Gorrie, VP, Government Affairs and Policy Johnson & Johnson
Theodore J. Torphy, VP, Science and Technology Johnson & Johnson

NO. OF EMPLOYEES:

6,000

WORLD HEADQUARTERS:

Warsaw, IN

DePuy Orthopaedics, the orthopedic wing of medical device giant Johnson & Johnson (New Brunswick, NJ), has continued to climb double digits over the past couple of years, led by its orthopedic joint reconstruction unit. Fiscal 2005 was no different, as revenues rose 13% to $3.8 billion, a follow-up from a 14% jump in 2004. Along with the rise in sales in its orthopedic joint reconstruction unit, the group garnered strong sales from the spine unit and Mitek sports medicine products.

DePuy is a manufacturer of artificial hips and knees, as well as extremity, trauma, orthobiologic and operating room products. DePuy produces the products under DePuy Orthopaedics, DePuy Spine, Codman and Mitek brands.


TJ. Sullivan, president of DePuy Orthopaedics.
The company has benefited the last couple of years from its iOrthopaedics, a computer-assisted navigation platform that was unveiled in March 2004. This technology allows greater surgical precision and improved outcomes in minimally invasive procedures.

One of the strongest areas for DePuy Ortho-paedics is the mobile bearing knee technology with the LCS Total Knee System and the PFC Sigma Rotating Knee System.

As with the company’s competitors, the rise in DePuy’s sales has been tempered by the receipt of two subpoenas in the past two years from the US Department of Justice. The first, received in March 2005, pertained to relationships between DePuy and its physician clientele. The second subpoena came this past June as the Department of Justice was investigating alleged antitrust violations among several major orthopedic manufacturers.

Along with the strong double-digit growth, the parent company, Johnson & Johnson, has been working to continue that growth by acquiring a few companies in 2005 followed by additional purchases in the beginning of 2006.

Notably, in January 2006, the company completed the purchase of Miami, FL-based Hand Innovations, a privately held manufacturer of implants used for the repair of wrist fractures. The acquisition is expected to help DePuy grow in one of the fastest-growing segments of the extremities market. With this purchase, DePuy will benefit from one of Hand Innovations’ top product lines, the Distal Volar Radius (DVR) plates. More than 50,000 DVR plates have been implanted since the technology was introduced in February 2001.

“Treatment of upper extremities is an area of strong growth, and our goal is to lead the industry in this area,” said Gordon Van Ummersen, general manager, worldwide trauma and extremities, DePuy Orthopaedics. “By combining leading products of Hand Innovations and DePuy’s worldwide distribution network, we anticipate rapid growth in this segment of the market.”

In March 2006, DePuy Mitek announced that its European affiliate, Cilag A.G., had acquired Saint-Jeannet, France-based Future Medical Systems S.A. (FMS), a privately held company that manufactures arthroscopic fluid management systems.

“DePuy Mitek is committed to providing its customers a full range of innovative surgical solutions for arthroscopy and sports medicine,” said Michel Paul, president of DePuy Mitek. “Future Medical Systems has developed outstanding arthroscopic products and has a promising pipeline. The acquisition of Future Medical Systems expands our offering and gives us an opportunity to fulfill our commitment to our customers.”

In 2005, DePuy Mitek’s biggest product launch was the Orthocord Suture, an orthopedic suture for knee and shoulder repair with unique product attributes in strength, handling and knot-tying capabilities.

One area in which parent company Johnson & Johnson is expected to make a splash during the next few years is the artificial spine market. A recent launch was the Expedium Spine System, a comprehensive system of implants and instruments designed to help surgeons correct deformities such as scoliosis or stabilize the spine in cases of trauma or degenerative disc disease.

The company received a big boost from Medicare this May after it agreed to pay for artificial spinal disks implanted in beneficiaries under the age of 60.

DePuy also released several new products at the American Academy of Orthopaedic Surgery (AAOS) annual meeting in March including the Rotating Platform (RP) Knee product line, composed of computer-assisted surgery technology.

In addition, Johnson & Johnson is expected to launch the Synthes disc in the United States in the second half of 2006.


2. Zimmer


$3.3 Billion

KEY EXECUTIVES:


J. Raymond Elliott, Chairman, CEO and President
Sam R. Leno, CFO and Executive VP of Financial & Corporate Services
Sheryl L. Conley, Group President, Americas and Chief Marketing Officer
David C. Dvorak, Group President, Global Businesses and Chief Legal Officer
Cheryl Blanchard, Sr. VP, R&D and Chief Scientific Officer
Laura O’Donnell, Chief Compliance Officer

NO. OF EMPLOYEES:

6,700

WORLD HEADQUARTERS:

Warsaw, IN

While the orthopedic industry has brought all the major players some heady challenges in 2005—and continues to do so—Zimmer still managed to grow its business by double digits in 2005, with a 10% increase from 2004, bringing the total net sales up to $3.3 billion. With its previous acquisitions of Centerpulse and Implex paid off, the company—with operations in 24+ countries and distribution to 100+ countries—even ended the year with net cash of $164 million.

Staying ahead of the curve has led Zimmer’s top executives to carefully evaluate its corporate model and strategies in the past year. As a result, a new organizational structure was established, creating global businesses focused on markets and customers; this will be accomplished through both internal growth and acquisitions.


Graphic depicting the slimmer profile of the Zimmer “Gender Solutions” knee implant for women. Photo courtesy of Zimmer, Inc.
“It’s time to move past the integration and build our future with a new organization structure,” said Ray Elliott, chairman, president and CEO of Zimmer. “We are blessed with a great team in a great marketplace and we are making these changes from a position of strength.”

In addition to its own internal initiatives, Zimmer announced in November that the state of Indiana would grant more than $5 million over the next 10 years in tax credits and other incentives to support the company’s R&D endeavors. Along with expansion of its facilities, including a $24 million investment for an expanded R&D facility in Warsaw, IN, Zimmer expects to add about 275 new workers to its roster by 2010.

The company’s product lines have been benefiting from aging populations—among other factors—needing more procedures and demanding top-notch products. Sales of Zimmer’s Trabecular Metal Technology illustrate how the company has capitalized on this market, as the technology brought more than $100 million in sales in 2005, a 40% increase from 2004.

Most of the company’s overall sales are still coming from the United States, as 2005 saw $1.9 billion from this region. European sales contributed 27% of total sales, and Asia added 14% (with Japan being the most lucrative Asian market).

The reconstructive market was the company’s cash cow, contributing $2.7 billion in 2005—all categories (eg, knees, hips, extremities and dental) increased sales. The company’s other markets, including trauma, spine and orthopedic surgical products, posted increases as well.

Zimmer’s strategy of continuously rolling out new products has been paying off, too. In 2005, new products accounted for 21%, or $695 million, of all sales. This year, the company is looking forward to sales stemming from products incorporating Trabecular Metal Technology, the VerSys Epoch Composite Full Coat Hip Prosthesis, the NexGen MIS Tibial Plate, various trauma products (eg, Zimmer’s Periarticular Locking Plates, the Sirus Intramedullary Nail System) and alternative bearing surfaces such as ceramic-on-ceramic and metal-on-metal.

In addition, Zimmer is broadening its portfolio by offering women the Gender Solutions Knee Implants, which were just approved by the FDA in May. And in December 2005 and July 2006, respectively, Zimmer received FDA and PMA approval for its Trilogy AB Ceramic-on-Ceramic Acetabular System, which is a spin-off from the company’s Trilogy system, worth approximately $150 million in sales in 2005.

Last year, the company also looked to improve its bottom line by acquiring intelligent surgical instrument technology to help surgeons position instruments during procedures; the IP for the Zimmer BRIGIT Bone Resection Instrument Guide was acquired from French company MedTech S.A. for an undisclosed sum. Earlier this year, Zimmer applied for 510(k) clearance of the BRIGIT system for use in total knee arthroplasty.

In the bone cement market, Zimmer, which had formed a US distribution agreement in early 2005 with Germany-based Heraeus, announced at the end of the year that the two companies would expand their agreement to include worldwide distribution for Palacos and other Heraeus bone cement products. With this deal, Zimmer hopes to capture more share of this market, in which Palacos products currently have more than 50% market share in Europe alone.

As Zimmer continues its pattern of offering new products and technology, it is also exploring newer territory through partnerships with ISTO Technologies and Revivicor to develop biological solutions to repair and replace damaged orthopedic tissues.

To continue fostering all this innovation with new products and agreements, the company has also launched an initiative to step up its value-added education. As a result, Zimmer nearly doubled the number of surgeons being trained by the Zimmer Institute. Particular emphasis is being placed on Zimmer’s own Minimally Invasive Solutions procedures and technologies.

Some challenges remain, however. Since March 2005, the US Attorney’s Office has been investigating Zimmer, along with four other orthopedic companies, regarding its relationships with orthopedic surgeons. If the company is found by the DOJ to be in violation of any laws, 2006 and beyond could be impacted.

Even more worrisome—especially since the press has jumped all over the topic—is the latest subpoena Zimmer received from the US Department of Justice in June related to possible antitrust violations. Zimmer, like its competitors that have received similar subpoenas, is currently facing fluctuating stocks and could see problems ahead depending how the investigation shakes out.

The company’s first quarter this year also wasn’t stellar. Sales were $860 million, only 4% higher than last year. Still, the company continues to have margin strength of 78% gross, 34% operating and 24% net reported and adjusted. In addition, operating margin profits were at 53% for the Americas, 44% for Europe and 48% for Asia.

At the annual meeting of the American Academy of Orthopaedic Surgeons in March, Zimmer also announced it expects sales growth will be fueled later this year through a wide range of product launches.


3. Stryker


$2.9 Billion ($4.9B Total)

KEY EXECUTIVES:


John W. Brown, Chairman of the Board
Stephen P. MacMillan, President and CEO
Luciano Cattani, Group President, International
Ron Lawson, Executive VP
Stephen S. Johnson, VP and Group President—MedSurg
James E. Kemler, VP and Group President—Biotech, Spine & Trauma Operations
James R. Lawson, VP and Group President—Orthopedics and International
Dean H. Bergy, VP and Chief Financial Officer

NO. OF EMPLOYEES:

17,265

CORPORATE HEADQUARTERS:

Kalamazoo, Michigan

With a new CEO firmly entrenched in the company, Stryker has transitioned pretty smoothly. After former president John Brown stepped down last year—marking the end of his 28-year tenure with the company—present CEO Stephen MacMillan has been positioning the company for growth amid a changing regulatory and reimbursement climate and sidestepping the various obstacles that are sure to challenge the company in coming years.

Stryker, as a whole, reported a 14% increase in sales, to $4.9 billion, in 2005, of which about two thirds stemmed from domestic revenues ($3.2 billion). Biotech, Instruments, Medical, Endoscopy, Spine and Trauma divisions were the stellar performers of the company, while Orthopedic faced some tougher times but still managed to post increases. Sales started picking up toward the end of 2005, and orthopedic implant sales increased 11% to $2.9 billion, partially due to the move to have a Stryker veteran head up the division. Mike Mogul, the new head, was previously called on to revamp the company’s German business. In 2005, the orthopedic implant sector boasted increases in everything from hips (4%), knees (14%), spinal (17%) and micro-implants (12%).


John W. Brown, chairman of the board at Stryker Corp. Photo courtesy of Stryker Corp.
With 35% of Stryker’s overall sales coming from abroad, areas such as Japan remain lucrative, as the company has positioned itself at the top of the trauma market there, with sales growing twice as fast as the market itself. Sales of the Scorpio NRG knee implant—designed specifically for Japanese patients—were also in-creased by twice the rate of the market.

The United Kingdom was another successful market. In 2005, based on long-term patient outcomes, Stryker received a 10A “gold standard” rating from the United Kingdom’s Orthopaedic Data Evaluation Panel for the Exeter hip system. In addition, sales of Stryker’s postoperative pain products tripled from 2004 to 2005.

In Australia, Stryker has maintained its top market share hold in areas such as total hip replacement, CMF and powered surgical instruments. The top-selling single product for the company is the OP-1 implant for bone fractures.

Back in the United States, Stryker saw its Medical division grow at two times the rate of the market. With all the gains in overall business, a new facility was opened in Dallas, TX for the Communications and Imaging divisions. 

The MedSurg business, already successful in the United States, is expected to capture a larger share of the global market in time, particularly in China and the United Kingdom. In 2005, sales were $1.8 billion, an increase of 21%.

The Endoscopy division also remains a winner, as sales have more than doubled those of the entire company in 1990, when the division was created.

Poising itself in the competitive industry, Stryker formed or renewed alliances with prestigious institutions such as The Cleveland Clinic, the Mayo Clinic and Memorial Hermann Hospital.

Acquisitions continue to play a large role in the moving the company forward as a market leader. In early 2005, the company’s acquisition of eTrauma for $50 million helped position Stryker as the market leader in digital imaging for orthopedic clinics. The OfficePACS (Picture Archive and Communications System) is currently being used in only about 10% of US orthopedic practices, but the company believes the market will expand greatly over time. In the third quarter of 2005, OrthoPad was introduced as a complement to OfficePACS.

Earlier this year, Stryker continued its acquisition strategy by purchasing Sightline Technologies for $50 million (along with additional payments of up to $90 million, depending on factors such as performance). Sightline develops flexible endoscopes for the gastrointestinal and other market segments.

PlasmaSol Corp., which has a technology that offers Stryker the ability to provide sterilization equipment for use with certain MedSurg Equipment products, was also acquired for $17.5 million in the fourth quarter of 2005.

As seen with all the gains made in 2005, the company is continuing its winning streak in 2006, having already seen a 10% increase in net sales for the first quarter. In addition, orthopedic implant sales are up 7%, while MedSurg Equipment sales jumped nearly 16%.

Looking ahead, projections for 2006 include a healthy continued growth of as much as 15%. The company will face some hurdles, though, as the potential remains for increased pricing pressure on implant products in the United States, Japan and other foreign markets. Also, positive currency gains seen in the past are forecasted to disappear.

However, the company is planning ahead for such potential downfalls by increasing its R&D efforts to churn out new products that will be anticipated to keep increasing profits over time.

Stryker will also be keeping a watch over activities of the US Department of Justice, which subpoenaed the company in March 2005 (along with other companies) with a request for documents related to consulting and service agreements with physicians. And Stryker was also a recipient of the US Justice Department’s latest round of subpoenas of major orthopedic companies for its investigation on possible antitrust violations. Like its counterparts, Stryker is currently facing stock fluctuations and intense media analysis and scrutiny as a result.


4. Synthes


$2.1 Billion

KEY EXECUTIVES:


Hansjörg Wyss, Chairman and CEO
Michel Orsinger, President and COO
Ciro Romer, President Europe and Latin America
Robert Donahue, Chief Financial Officer

NO. OF EMPLOYEES:

7,600

WORLD HEADQUARTERS:

West Chester, PA

As a leading developer of instruments, implants and biomaterials for surgical fixation, correction and regeneration of the musculoskeletal system, Synthes has remained a leader by pushing forward with healthy sales, which jumped 16.8% in 2005. The good news doesn’t end there—net earnings also were up 35%. The company has achieved consistent 10% sales growth every year since Synthes integrated with Stratec in 1999.

In North America, sales remained nearly the same as 2004, capturing nearly two thirds of the total. Europe saw a slight decrease, whereas Asia and the rest of the world offered slight increases.

The company, which ranks among the top three companies for spinal devices and is at the forefront of the cranio-maxillofacial market, strengthened its position in 2005 by concentrating many of its efforts on the Asian market—the end result was a 17.4% growth (pro forma local currency). In particular, Japan already has exceeded market growth projections, and Synthes now has the second largest market share in the trauma market. Hoping to maintain its foothold as a leader in China, Synthes has continued to invest in sales forces and training for previously acquired Mathys (2004).

Furthermore, Europe, the Middle East and Africa contributed 24% to Synthes’ bottom line. Switzerland was a particularly lucrative area, as the US dollar held strong against the Swiss Franc and the Euro. Since the company acquired its ninth European manufacturing plant, in Raron, Switzerland, in October 2005, business should keep booming in this area.  In the Middle East and Africa, Synthes signed long-term agreements with government authorities and key customers, and additionally had many distributors invest in dedicated sales consultants.

Finally, the company opened its fifth Latin American subsidiary in Peru during 2005; an exclusive distributor in El Salvador was added to the roster, marking the company’s 12th distributor in Latin America. Synthes saw double-digit increases in this region.

Much of Synthes’ overall success has been a direct result of the company’s three-pronged strategy of focusing on product innovation, sales force expansion and education/training for employees, doctors and operating room personnel. Sales consulting staff were increased by 13% in 2005.

Many of the sales efforts focused on the trauma market, as various new products were rolled out for Synthes’ Locking Compression Plate System, which now contains 28 product lines with more than 800 plates and hundreds of screw types/sizes. The company also introduced the Expert Intramedullary Nail System.

In the cervical plate market, the Vectra and Anterior Cervical Compression System were leveraged to tap into the overall $300 million market. In 2005, the company succeeded in significantly growing its sales with the Axon Screw System, Anterior Tension Band Plate and Thoracolumbar Locking Plate System.

While the cranio-maxillofacial market isn’t as large as other markets Synthes deals with, the company currently exceeds 50% of market share. The introduction of the Low Profile Neuro System bolstered sales in this market globally quite a bit.

As the company released many new products to the market, the Synthes Inventory Management System was being simultaneously installed or upgraded in more than 2,100 hospitals to enable electronic inventory management and on-line ordering.

Perhaps part of the company’s growth can be attributed to its own internal increases in personnel. Synthes grew its work force by nearly 14% in the past year.

In 2006, the company is looking to continue its double-digit growth pattern by expanding market share in all divisions. In the trauma market, the Locking Compression Plate System will introduce 12 new lines, and all three Expert Nailing Systems will roll out to all regions. Meanwhile, the spine sector will see the global launch of several products including the cervical Vectra Plate. In January 2006, the FDA also approved the ProDisc-L Total Disc Replacement for treatment of degenerative disc disease in the lumbar spine.

If the first quarter (January-March) is any indication, the company is off to a good start, with a 17% increase in sales to $576 million. Trauma, spine and cranio-maxillofacial markets each posted double-digit gains.

The company hopes to further strengthen its position by continuing its partnership with the AO Foundation, a non-profit surgeon-driven organization based in Switzerland that specializes in trauma surgery products. 

Challenges will remain, however. Synthes received a subpoena from the US Department of Justice to hand over certain documents and information regarding the off-label sale, promotion and reimbursement of Norian XR bone cement. (Synthes announced it would fully cooperate with authorities, and the company has not sold this product or had any revenues related to it since 2004.)


5. Biomet


$1.9 Billion

KEY EXECUTIVES:


Daniel P. Hann, Interim President and CEO
Niles L. Noblitt, Chairman
Jerry L. Ferguson, Vice Chairman
Garry L. England, Chief Operating Officer, Domestic
Charles E. Niemier, President, EBI Spine
Gregory D. Hartman, Sr. VP, Finance, Treasurer and CFO
Joel P. Pratt, Senior VP

NO. OF EMPLOYEES:

6,300

WORLD HEADQUARTERS

: Warsaw, IN

Biomet, an orthopedic reconstruction product manufacturer with operations in 50 locations and distributions in more than 100 countries, has seen some major changes in the past several months. Former CEO and founder Dane Miller, 60, abruptly resigned from his post in March, announcing his early retirement after serving as president, CEO and a director of the company since its formation in 1977. He will continue to serve as a director and consultant.

The board of directors named Daniel Hann as the interim president and CEO.

Mostly known as a “premier franchise,” Biomet has not been without struggle in competing against larger players like Zimmer and Stryker. After all the recent reshuffling, Biomet confirmed in April that it hired investment banker Morgan Stanley to help explore future strategies, including a possible move to put itself up for sale. Analysts have cited Medtronic and Smith & Nephew as potential buyers. The asking price for Biomet, should it decide to sell, could be more than $10 billion.

Conflicting numbers in 2005 and 2006 are showing signs of potential problems ahead if the company doesn’t sell. The fourth quarter had a 5% decrease in net profit, in part because of Biomet’s $9 million severance package to Miller after his retirement as well as expenses related to reorganization of EBI operations and discontinuation of the Acumen surgical navigation product line. Overall sales are up, however, particularly for knees and hips.

In its 27th consecutive year of record revenues, in FY 2005 (ended May 31, 2005) Biomet was aided by a 16% increase in sales ($1.88 billion vs $1.62 billion in 2004), which is keeping in line with prior years. In addition, net income was up 8%, from $326 million to $352 million.

In the past six fiscal years, Biomet has introduced more than 500 new products to the market. Continuing this product launch streak, 2006 will see many new additional introductions to the market. Biomet is hoping to make a splash with its C2a-Taper Acetabular ceramic-on-ceramic hip system and its Porous Plasma Spray technology, both approved by the FDA last December. In May, the FDA gave Biomet another nod, this time for the Regenerex porous titanium artificial hip product; the expected launch date is December 2006 or early 2007. The company plans to use the Regenerex brand to introduce a series of products made from porous metal.

Other offerings on the horizon include the ExploR Modular Radial Head as well as the Cobalt Bone Cement, which offers high optical contrast in Biomet’s Microplasty Minimally Invasive Programs.

In FY 2005, overall domestic sales grew 15%, while international numbers climbed 20%—many of these sales were positively impacted by currency translation; European sales, for example, were up 17%.

In the reconstructive device market, sales were up 19%, exceeding $1.25 billion total.

Spinal product sales increased 34%. Spinal hardware and orthobiological products used in spinal procedures grew a whopping 118%; however, spinal stimulation products decreased 9%. Biomet’s first top-loading spinal product, the Array Degenerative System, launched in 2005 and has since become the company’s best-selling spinal hardware system. Other spinal products introduced in 2005 include the ESL Spine Spacer System and the Interpore Nexus Curved Spacer System. In 2006, the company plans to roll out Interpore’s Altius M-INI Spinal Fixation System, the Synergy Polaris, Ibex Spine System and SpF MINI Implantable Spinal Fusion Stimulator.

Biomet’s EBI subsidiary faced some changes in 2005, as its sales force was divided into separate spine and fixation groups, all while the Interpore sales force was integrated with EBI’s spine sales force. In July 2006, Charles Niemier, Biomet’s CFO and COO, replaced Bart Doedens, MD as president of EBI. Amid all these changes, fixation sales were flat in 2005.

The knee market saw healthy growth, with sales increasing 29% domestically and 25% worldwide. These percentages were partially achieved by Biomet’s Vanguard Complete Knee System, as well as by the domestic introduction of the Oxford Unicompartmental Knee System, the only free-floating meniscal unicompartmental knee system available in the United States. The Vanguard line will see even more introductions in 2006 for open knee procedures.

The hip market also aided sales, as the company launched the M2a-Magnum Large Metal Articulation, the bone-conserving ReCap Femoral and Total Resurfacing Systems, and the second-generation ArComXL, a highly cross-linked polyethelene that was cleared by the FDA in 2005.

Other products (eg, arthroscopy, softgoods and bracing equipment, as well as operating room supplies) saw a combined increase of 7%. The dental reconstruction segment also strengthened the bottom line with the introduction of the Encode Restorative System (a series of custom abutments) and CAM StructSURE Precision Milled Bars (for overdentures).

Looking ahead, the company increased its R&D expenditure by 25% in 2005, as the company continues to focus its attention on new product development and enhancements to existing products. Biomet is currently also evaluating facility expansion plans, possibly in either Indiana or New Jersey.

Tempering some of the more positive financial news reported earlier this year, former CEO Miller had cautioned before his retirement that the company would most likely see a negative impact from the continued strength of the US dollar on fourth-quarter sales (by as much as $1l million)—in the end, he was right, as net sales only reached $539.9 million.

Biomet surely will have some bigger obstacles on its journey. Ever since being subpoenaed in June by the US Justice Department, which is investigating various companies for possible antitrust violations, the company’s stock has been taking a hit—in late June, the stock had lost 10% of its value within two days and was near its lowest level in almost three years. In March 2005, Biomet had also been subpoenaed by the US Attorney’s Office for documents related to consulting and other agreements with surgeons.


6. Medtronic


$1.8 Billion ($10.1B Total)

KEY EXECUTIVES:


Art Collins, Chairman and CEO
William A. Hawkins, President and COO
Pete Wehrly, President of Medtronic Sofamor Danek
Susan Alpert, MD, PhD, Sr. VP—Chief Quality and Regulatory Officer
Jean-Luc Butel, Sr. VP and President, Asia Pacific
Terrance Carlson, Sr. VP, General Counsel and Corp. Secretary
H. James Dallas, Sr. VP, Chief Information Officer

NO. OF EMPLOYEES:

33,000 (1,300 for Sofamor Danek)

WORLD HEADQUARTERS:

Minneapolis, MN (Memphis, TN for Sofamor Danek)

Founded in 1949, Minneapolis, MN-based Medtronic is no stranger to capitalizing on opportunity while meeting challenges head on. Therefore, it’s not surprising that the manufacturing giant managed to stay the course while increasing net sales to more than $10 billion in fiscal year 2005 (ended April 29, 2005). However, with the overall orthopedic market seeing slower growth this year, Medtronic’s spinal business, operating as Memphis, TN-based Sofamor Danek, could face even more hurdles that may affect its revenues in coming months—though, you’d never know it looking at its healthy numbers.


Surgeons reconstitute the rhBMP-2 powder with supplied sterile water and then apply it to collagen sponges when using the INFUSE Bone Graft. Photo courtesy of Medtronic, Inc.
In the past year since 2005’s earnings were reported, Medtronic hasn’t shown any signs of losing momentum. Recently released FY 2006 numbers show another record for the company as net sales surpassed $11.3 billion (12% growth). Furthermore, net earnings were also up to $2.6 billion, representing an impressive 42% increase.

“Medtronic’s strong annual and fourth-quarter performance reflects the balance of our portfolio and underscores the importance of maintaining a diversified business,” said Chairman and CEO Art Collins. “We are encouraged by the strength of our new product pipeline and continue to make major investments to support growth in the coming fiscal year and beyond.”

In 2005, of the company’s seven businesses, the most newsworthy was the Spinal division (Sofamor Danek). Spinal net sales jumped 22% in FY 2005, reaching a total of $1.8 billion. While FY 2006 didn’t mark the same gain percentage-wise, it still managed to best its previous year’s sales by 19%.

With all this growth comes a continued strategy of investing more dollars in R&D—parent company Medtronic spent nearly $1 billion in 2005. Apparently this paid off in 2005, since as much as two thirds of corporate revenues stemmed from products introduced in the last two years.

Much of the spinal division’s success was due to solid growth among its various product offerings. One new orthopedic product rolled out last year included the Verte-Stack Capstone PEEK (CAPSTONE) Vertebral Body Spacer for spinal surgery. In November, the company also added a new cranial stabilization indication for its Vertex Reconstruction System, which was originally cleared by the FDA in September 2005 for laminar hook placement on C1-C3 vertebrae and pedical screw use on T1-T3 vertebrae.

Adding to its minimally invasive technology was the US launch in October of both the CD Horizon Spire Spinal System and the METRx II Set. Just before these introductions, the company rolled out the CD Horizon Sextant II System, a minimally invasive surgical instrumentation system for placing implants that provide stabilization during spinal fusion surgery, as well as the Vertex Max Reconstructive System. Rounding out these introductions was the unveiling of the first resorbable implant for spinal surgery, known as the Mystique Resorbable Graft Containment Plating System.

The company’s INFUSE Bone Graft devices also have been in the news. In January 2006, the INFUSE LT-Cage, Inter Fix and Inter Fix RP devices for spinal fusion received Australian approval. Two months later, Medtronic announced that it was partnering with the Orthopaedic Trauma Association, which received a grant from Medtronic to fund an independent clinical study that will evaluate recombinant human bone morphogenetic protein-2 (rhBMP-2), sold as INFUSE Bone Graft, in extremity trauma.

Along with product offerings ballooning in the orthopedic sector, Sofamor Danek completed some major facility expansions last year at its Tennessee location. To integrate all of Medtronic’s global operations, which serve more than 120 countries, a new enterprise-wide information system was implemented.

Along the way, the news hasn’t all been rosy for the company, particularly on the litigation front. In February, Medtronic Sofamor Danek announced that it filed suit against Biomet and its subsidiary, EBI Spine, L.P., for infringement on seven patents related to its spine products. Santa Rosa, CA-based Kyphon is another target of Medtronic, as the company filed suit alleging that Kyphon is infringing on at least four of Medtronic’s patents related to balloon dilatation catheters and spinal treatment. The suit also asks for a declaratory judgment that five Kyphon patents are inapplicable to Medtronic’s new osteotome device that treats spinal disorders without the use of a balloon.

In spite of some of these problematic situations, nothing appears to stand in the way of Medtronic achieving its goals. In May, Medtronic announced that it projects overall 2007 revenue to keep climbing to as much as $13 billion, and 2008 projections are between $14 billion and $15 billion.


7. Smith & Nephew


$1.2 Billion ($2.4B Total)

KEY EXECUTIVES:


Dudley Eustace, Chairman
Chris O’Donnell, CEO
Peter Hooley, Finance Director
Peter Arnold, Group Director of Technology
Peter Huntley, Group Director, Indirect Market
Joe Woody, President, Wound Management
Jim Taylor, President, Endoscopy
David Illingworth, President, Orthopedics

NO. OF EMPLOYEES:

8,618


WORLD HEADQUARTERS:

London, United Kingdom


The Birmingham Hip Resurfacing implant was FDA approved in May 2006. Photo courtesy of Smith & Nephew.
From its humble beginnings as a small pharmaceutical chemist shop in Hull, England, Smith & Nephew has grown into one of the largest orthopedic device manufacturers in the world with 2005 revenues of $2.4 billion, a 12% increase over 2004. Not surprisingly, the largest growth in 2005 stemmed from the orthopedic segment, with revenues growing 18% to $1.28 billion.

The orthopedic division contributed half of all Smith & Nephew’s sales in 2005. The company also has Endoscopy and Advanced Wound Management units.

Along with the rest of the orthopedic industry facing healthcare budget restraints in the United States and abroad, Smith & Nephew has been showing some signs of a slowdown this year. Gains for the first quarter of 2006 were only single-digit percentages—in fact, overall sales were flat with only a 2% increase over the first quarter of 2005. In early 2006, the company segmented its orthopedic business into two separate global units—orthopedic reconstruction and orthopedic trauma—to further enhance orthopedic segment growth.

In addition to general industry trends, the company attributed the sales lag to the orthopedic sales force restructuring. In 2005, the orthopedic division increased its sales force by 21%, with the bulk of new sales staff added in the United States. Domestic sales grew 21% in 2005 to $745 million, while international sales revenue grew by 16% to $456 million.

With all the changes occurring internally and externally, Smith & Nephew expects the flatter numbers seen this year to eventually turn around by the second half of 2006 with numerous product launches on tap. The orthopedic trauma division is anticipated to keep growing by double-digits while orthopedic reconstruction will be a bit lower, in line with current overall market trends.

In 2005, the double-digit growth was bolstered by numerous product launches. In November, the orthopedic segment, with US headquarters in Memphis, TN, launched the Legion Revision Knee System, which employs the company’s exclusive Oxinium technology (a substance with the strength of metal and wear resistance of ceramic) and is expected to produce increased revenues in 2006.

Additionally, the PERI-LOC Periarticular Locked Plating System and Mobilab mobile surgical training facility for orthopedic surgeons were introduced.

Last year also saw two important approvals for Smith & Nephew, the most prominent of which later caused a relatively unknown man from Belleville, IL to go down in the annals of orthopedic history. On June 5, 2006, Rick Jones, 52, became the first recipient of Smith & Nephew’s Birmingham Hip Resurfacing technology. Since then, 20 more patients have had the procedure, and now that the technology has been approved by the FDA for use in the United States, the company expects the number of procedures here to increase by as much as 80% in the next 25 years. This expectation is in line with a Goldman Sachs Global Investment market estimate of $400 million in the United States by 2010.

In other regions, the Stride Porous Hip Stern and Genesis II minimally invasive tibial base plates received approval in Japan, the second largest orthopedic market in the world. Additionally, the acquisition of Leading Kabushiki Kaisah (“Leading Medical”), an orthopedic distributor in Japan, is expected to enable Smith & Nephew to double its sales force in that market.

Smith & Nephew, like several of its competitors, has faced some challenges as it was the recipient of two subpoenas in the past year and a half. In March 2005, the US Attorney’s Office requested documents related to consulting and other agreements with surgeons. Last month, the company also received a subpoena from the US Department of Justice as the government is conducting an investigation on antitrust practices.

The company also has been dealing with the fallout from a 2003 recall of a macrotextured version of the Oxinium femoral knee component after the company received reports of an unusually higher number of early revisions (ie, early replacements). Since nearly 3,000 components had been implanted by the time of the recall, the company has been dealing ever since with revision surgeries and settlements for affected patients.

In 2006, Smith & Nephew have been making some strides toward securing future success. In June, the company announced that the orthopedic trauma unit formed a strategic alliance with Swedish company Q-MED to develop and commercialize Q-MED’s proprietary technology for the production of stabilized non-animal hyaluronic acid, NASHA, which may be used for osteoarthritis management as well as other orthopedic uses. Under the agreement, Smith & Nephew would market, sell and distribute Durolane and certain other products in Q-MED’s portfolio.

And on July 11, Smith & Nephew announced that it had purchased Texas-based OsteoBiologics for $72.3 million. OsteoBiologics, a privately held company, provides the only off-the-shelf bioabsorbable implant for articular cartilage repair on the market in Europe.

Also in July, the company launched the Trigen Intertan Intertrochanteric Antegrade Nail utilizing dual screw technology for the treatment of femoral fractures. Looking ahead, a Fall 2006 release is anticipated for the Exogen 4000+, the only bone healing system that uses ultrasound technology.


8. Aesculap


$1.8 Billion

KEY EXECUTIVES:


Dirk Kuyper, President
Michael Ungethum, Chairman of the Board
Luigi Boggio, Sales (Italy)
Christof Hennigfeld, Marketing and Sales (Germany)
Hans Hux, sales Region IV (Great Britain)
Otmar Wawrik, Sales Region I (Germany)
Dieter Wunderlich, Production Sutures (Spain)
Takashi Mikami, (Japan)

NO. OF EMPLOYEES:

4,662

WORLD HEADQUARTERS:

Tuttlingen, Germany

Founded in 1867 by master craftsman Gottfried Jetter in Tuttlingen, Germany, the name Aesculap has been synonymous with surgical instruments manufactured to exacting standards, and as a testament to the company’s dedication to craftsmanship, Aesculap surgical instruments used during World War I can be found on Ebay in mint condition, still functioning as they did when they were first manufactured over 80 years ago.

Today, Aesculap, a subsidiary of B. Braun, is comprised of Surgical Instruments, Surgery Materials, Spinal Surgery, Motor Systems, Neosurgery, Orthopedics and Vascular Therapy groups. By combining Old World traditions with modern technologies, Aesculap has produced some of the most sought after and respected surgical devices available, including the OrthoPilot navigation system used to assist surgeons in orthopedic surgeries.

Revenues for Aesculap reached $1 billion in 2005, a respectable increase of 9% percent over $962 million in 2004, and accounted for 29% of B. Braun’s total revenue. The increase was influenced significantly by business developments in Eastern Europe and North and Latin America. While business in Japan is gaining momentum, and Korea and Australia are showing double-digit growth, sales in China have been hampered as a result of regulatory restrictions.

The most significant development to help Aesculap’s revenue has been the alliances forged with key buyers and distribution outlets. In January 2005, the US business unit of Aesculap, headquartered in Center Valley, PA, announced a suture agreement with Novation, the supply company of national health care alliances VHA Inc. and the University HealthSystem Consortium (UHC). Under the agreement, Aesculap provides VHA and UHC members with access to the company’s complete line of suture products at a substantial cost savings. The agreement, effective through March 31, 2008, includes an option to extend the agreement for an additional two years. As one of the largest purchasing groups in the United States, purchasing $180 million in suture products annually, the Novation alliance represents a large area of revenue for Aesculap.

“Aesculap has built a reputation of delivering exceptional products and value to our customers in the surgical community,” said Dirk Kuyper, president of Aesculap, Inc. “The agreement with Novation provides another opportunity for Aesculap to demonstrate its commitment to providing the highest quality products at competitive prices.”

The Novation agreement is the second GPO contract for suture products signed by Aesculap in the last year. In August, Aesculap signed a three-year supplier agreement with AmeriNet. Since the introduction of Aesculap sutures in the US hospital market in 2004, Aesculap has become one of the largest providers of sutures in the world.

Product launches have also contributed to Aesculap’s growth. In 2005, the division launched several new products, including the Metha hip short shaft prosthesis. The company also launched, in 2006, the aktivL IVD (intervertebral disk) prosthesis, a second generation of intervertebral disk implants, and the Univation knee endoprosthesis system.

Also during 2005, the company’s Aesculap Academy was recognized by Frost & Sullivan as Medical Professional Education Institution of the Year for consistently providing quality education globally. The Aesculap Academy organizes various seminars and symposia and has established e-learning tools that enable students to learn from the location of their choice and upgrade themselves as needed.

Operating in its tenth year, the division opened its newest location in the renovated Langenbeck-Virchow House in Berlin during 2005, enabling the Academy to expand into eastern and northern Europe.

The Academy wasn’t the only division recognized for achievement. In its analysis of the US Wound Closure Devices Market, Frost & Sullivan chose Aesculap to receive the Frost & Sullivan Market Penetration Leadership Award for its rapid gain of US market share, due in part to innovative sales of medical devices to hospitals, surgical centers and physicians.

“While many of its competitors develop alliances with hospital administrators and purchasing managers, Aesculap builds close relationships with surgeons,” said Frost & Sullivan Research Analyst Sheila Ewing. “The company responds to surgeons' needs by modifying existing devices, anticipating technical requirements and obtaining procedure knowledge to assist collaboration with end users.”

In 2006, Aesculap’s goal is to grow revenue in all regions by 20% with the introduction of new products, such as an updated version of the Crainiofix clamping system made of absorbable material.


9. ConMed Corporation


$339 Million ($617M Total)

KEY EXECUTIVES:


Eugene R. Corasanti, Chairman and CEO
Joseph J. Corasanti, Esq., President and COO
William W. Abraham, Senior Vice President
Robert D. Shallish, Jr., Finance and CFO
Jane E. Metcalf, VP—Corporate Regulatory Affairs
Gerald G. Woodard, President—Conmed Livantek

NO. OF EMPLOYEES:

3,100

WORLD HEADQUARTERS:

Utica, NY

Despite a spurt of growth during the first half of 2005, ConMed fell short of its goals by the end of the year after being plagued by product recalls, slower sales in the wake of Hurricane Katrina, fewer elective procedures utilizing the company’s orthopedic equipment and increased manufacturing costs incurred by rising prices for materials, transportation and other factors. In the end, the parent company managed to increase sales by nearly 11% to $617 million, of which the orthopedic business contributed 55% ($339 million). Net earnings, however, were down to $32 million from $33.5 million in 2004.

ConMed, formerly known as Consolidated Medical Equipment, has been growing larger ever since the 1970s. Started 33 years ago in Utica, NY, the company has grown over the years in what’s becoming typical orthopedic fashion: continuously roll out new products and strengthen the portfolio through acquisitions.

The orthopedic sector sat up and took notice of this corporation in 1997, when ConMed acquired Linvatec from Bristol-Myers Squibb for $370 million. This purchase helped ConMed become the second-largest global producer of arthroscopy products and orthopedic powered surgical instruments. The Arthroscopy division also later acquired Bionx Implants in 2003 to broaden the division’s range of bioabsorbable implant offerings.

With 210 sales representatives on the orthopedic side, even that full force could not overcome the stalling market for arthroscopic products and powered surgical instruments in 2005. The Arthroscopy division remains the company’s top performer, though, having brought in 34% of sales last year. With sales of $211 million, the slight (3.2%) increase over 2004’s numbers were attributed to increased sales of procedure-specific, resection and video imaging products for arthroscopy and general surgery, as well as integrated operating room systems and equipment.

Powered Surgical Instruments used in orthopedic surgery contributed 22% to ConMed’s total sales. In 2005, this segment had $132 million in sales, aided strongly by sales of the PowerPro and PowerPro Max powered instrument product lines for large and small bones, respectively.

ConMed also has divisions for patient care, electrosurgery, endosurgery and endoscopic technology, which reached total sales of $75.9 million, $88.5 million, $50.6 million and $58.9 million, respectively. It’s worth noting that the company’s earlier acquisition of Bard Endoscopic Technologies paid off quite handsomely, as the total sales for endoscopic technology increased a hefty 275% compared with 2004.

Three quarters of ConMed’s product offerings are single-use disposables, items that rely heavily on plastics. As the prices keep rising for petroleum, so have ConMed’s woes in manufacturing all the products using plastic. As such, these issues have contributed to earnings declines.

The US-based parent company gains most of its sales domestically, having taken in $390 million in 2005 from US sales. With other facilities in Mexico and Finland, however, international sales contributed approximately 37% of all sales in 2005.

In the manufacturing realm, ConMed received a warning letter from the FDA in June 2005. This action was a follow-up maneuver after a December 2004 inspection of Linvatec’s Largo, FL-based facility that resulted in numerous 483 observations related to inadequate quality systems. The company has since been working toward correcting the problems outlined in the document.

ConMed also has been embroiled in a lawsuit against Johnson & Johnson and its subsidiaries (eg, Ethicon) regarding violation of antitrust laws on both federal and state levels. ConMed has been seeking an injunction restraining J&J from continuing alleged anticompetitive practices, among other relief requests. No decisions have been made yet in the case.

In the quest for rising numbers (ie, profits), ConMed upped its R&D investments last year by 4% to $25.5 million and introduced some of the fruits of its labor at the annual American Academy of Orthopaedic Surgeons meeting in March. With a captive target audience in attendance, the company rolled out its battery-operated MPower and electric-powered MicroPower surgical instrument systems for bone procedures, a Sterile Transfer Battery System, Dry-Doc Cannula System, Spectrum II—Tissue Repair System suture passing device, and the Bio Mini-Revo Shoulder Anchor with proprietary Self-Reinforced polymer technology.

ConMed’s goals for 2006 are simple: improve profit margins while maintaining sales increases. Pricing and manufacturing operations are being evaluated to accomplish this task. Thus far, the company is showing a rebound from last year, with first-quarter sales (through March 31) coming in at the high end of ConMed’s expectations. Numbers are up slightly and, even more encouraging, sales are picking up speed this year compared with the latter half of 2005.


10. Wright Medical


$319 Million

KEY EXECUTIVES:


F. Barry Bays, Executive Chairman
Gary D. Henley, President and CEO
John K. Bakewell, Executive VP and CFO
John R. Treace, Executive VP, North American sales
Paul R. Kosters, President, Wright Medical Europe, SA

NO. OF EMPLOYEES:

750


WORLDWIDE HEADQUARTERS:

Arlington, Tennessee

Disappointment was the characterization Wright Medical’s executives used to describe 2005. Indeed, while the mixed bag shows some bright spots, including a 7% sales increase and success in Asian territories, more worrisome setbacks were the major challenge of the year, which ended with a 6.6% decline in net earnings, cooling sales in Europe and bottlenecking on the regulatory front. 

In a move to right the ship, Wright’s former president and CEO, Laurence Fairey, stepped down in late 2005 after several quarters of lower-than-expected numbers and Gary Henley grabbed the helm in March 2006 as his replacement. Having served in executive positions with larger companies such as Smith & Nephew, Henley moved to Wright from his most recent position as president of the Americas division for Orthofix International.


The CONSERVE Total Hip System mimics the natural kinematics of the hip with Big Femoral Head (BFH) technology. Photo courtesy of Wright Medical.
Among Wright Medical’s good news was its strong numbers in the United States, mostly attributed to sales of hip and knee reconstructive joints as well as upper and lower extremity products. With an overall 10% increase in hip sales, the company recorded a total of $109 million in 2005. Hip implants grew by 18%, aided by the Profemur modular neck implant and high-performance bearings such as ceramic-on-ceramic and larger-diameter metal-on-metal Big Femoral Head (BFH) technology.  The 2005 launch of the A-Class Series metal technology is expected to propel sales in the future, and the company is looking to its Conserve Plus Resurfacing System—currently under PMA review by the FDA—to gain entry into the hip resurfacing market as it gains momentum in the orthopedic industry.

The knee market wasn’t so shabby, either, with 11% sales growth domestically. The company’s focus on the minimally invasive surgery (MIS) market paid off with products such as the Advance line, including Medial-Pivot knee system and Double-High tibial insert. This family of products will be complemented in 2006 by the recent (May) launch of the next generation of Odyssey Distal Cut First (DCF) instruments for minimally invasive total knee replacement procedures.

Further strengthening sales was the extremities division, which grew 12%. Much of its success was due to the introduction of the Charlotte foot and ankle product line, along with distal radius and elbow products. Other contributors included the Micronail internal fixation device, market leader Evolve Radial Head system and the Graftjacket regenerative soft tissue product. Looking ahead, in December Wright entered into a license agreement with the University of Minnesota for intramedullary nailing technology for the treatment of wrist fractures; this technology is expected to complement the company’s Micronail system.

Tempering all these achievements, however, were flat sales for Wright’s biologic products. In particular, sales were downward for Allomatrix products and aren’t expected to rebound in 2006. The good news related to this product line, however, is that the Allomatrix Custom Biocomposite was cleared by the FDA in March 2006 for use in the spine.

Net income was the real worry for the company, having dropped from $26.5 million in 2004 to $24.9 million in 2005. Operating income was also disappointing, having declined by a little over 12% last year.

While domestic sales were generally sound, international worries abound. Accounting for 38% of Wright’s sales in 2005, the company floundered in the international arena, partially because it was rebuilding its European presence in northern Italy in Southern France, where Wright has facilities. France and Italy both declined in sales, though the company is looking for them to pick up later in 2006. The challenging regulatory environment in Europe, combined with dollar fluctuations, also made the company step back in contemplation. In May 2005, the company selected Paul Kosters to serve as the European president, and he is charged with the task of reorganizing sales and distribution to gain ground in newer markets such as Germany, Scandinavian countries, Austria and Switzerland.

While European markets weren’t faring so well for the company, Wright continued to see major gains in Japan, where sales grew by 20%. Hip sales, thanks to growth aided by the Profemur Z and Perfecta RS II lines, increased 43% over 2004. As in Europe, regulatory challenges are affecting business in Japan somewhat, as approvals have slowed. In May 2006, however, the company was pleased to be granted approval for its Micronail fixation system for wrist fractures; the product was originally launched in the United States in 2005.

In an effort to steer the ship back in the right direction, the company is looking into streamlining its infrastructure, increasing R&D investments and product launches.  R&D investments were up by 21% to $22 million in 2005. With the company’s history of introducing three to four new products each quarter, Wright slightly increased its sales force, particularly in the international arena. While the company continues to post sales gains by about 5% to 7%, executives are focusing on getting back to double-digit growth in the low teens range.

“For 2006, we have focused our business strategies and resources into new products and expanded sales distribution that will enable Wright to return to its long-stated longer-term financial objectives of low to mid-teens top line growth and expanding operating margins,” said F. Barry Bays, executive chairman of Wright’s board.

First-quarter 2006 results show the ship appears to be righting its course a bit. Net income exceeded projections and the therapeutic categories posted increases. Domestic sales are still the bright spot for the company, as international concerns remain. In June, the company also purchased a 29-acre site next to its Arlington, TN facility so it can expand its business.

Only time will tell how the company’s reorganization efforts pay off.



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