Gary D. Henley, President and CEO
Frank S. Bono, Sr. VP, Research and Development
Cary P. Hagan, VP, Orthopedic Reconstruction Marketing
John T. Treace, VP, Biologics and Extremity Marketing
NO. OF EMPLOYEES:
Perhaps it’s not the company on ODT’s list with the largest bottom line, but Wright Medical Technology posted significant sales gains for fiscal 2007 and was aggressive about new product development and acquisitions.
The device company has manufactured orthopedic implants and instrumentation for more than 50 years. Its product offerings include large-joint implants for the hip and knee; extremity implants for the shoulder, elbow, hand, wrist and foot; and biologic products including bone-graft substitutes.
Net sales for the fiscal year (ended Dec. 31) were $387 million, an increase of 14.1% compared with 2006. The company’s large-joint products made up the largest percentage of sales. Hips were 34.7% of sales, and revenues increased 10% for the year. Knee products were 26.5% of sales, while sales rose 8.8% compared with 2006. The most significant sales gains, however, came from extremity reconstruction products and biologics—areas in which Wright has devoted considerable attention and resources in recent years. Extremity sales increased 38.3% and represented 16.1% of sales. Biologics sales grew 16.2%, representing 19.7% of total 2007 sales.
Notably, international sales increased 18% to $151 million, helped in part by $6 million in favorable currency exchange, the company said.
Net income decreased to $1 million in 2007 from $14.4 million in 2006, primarily as a result of $18.9 million in restructuring charges related to the closure of the company’s operation in Toulon, France. Costs associated with acquisitions also impacted net income.
In hips and knees, the company cited strong sales of its Advance knee systems, the Profemur line of primary hip stems and the Conserve total hip implant, though sales partially were offset by slower sales of older product lines. For biologics, sales were boosted by the Graftjacket tissue repair product line and the Pro-Dense injectable regenerative graft. Extremity sales were helped by the Charlotte foot and ankle system and the Darco plating system, company officials noted.
For 2007, the company unveiled a number of new hip products, including the Supercap total hip arthroplasty, which does not require the hip to be dislocated during the procedure (minimizing recovery times). In addition, the company rolled out the Profemur Xm hip stem, the Profemur Z hip revision stem and the Profemur TL modular neck system. The new Dynasty acetabular cup system and the Gladiator bipolar system also were introduced.
In a significant step toward approval in the United States, Wright Medical received approval from Japan’s Ministry of Health, Labor and Welfare for its Conserve Plus hip resurfacing system, which currently is available in Europe, Canada and Australia, as well as other international markets. The company's regulatory submission remains under review by the FDA, and the device only is available under an investigational device exemption domestically. Once approved, it would join Smith & Nephew’s Birmingham hip resurfacing system and the Cormet device (marketed by Stryker in the United States), which already received FDA approval.
Other notable product launches included the Evolve Proline system for radial head replacement in complex elbow fractures; the Pro-Dense injectable regenerative bone graft product; Advance Stature femoral implants for patients with a more narrow knee anatomy or smaller skeletal frame; and the Carolina system designed for treatment of Jones fractures of the fifth metatarsal of the foot, which is common in young, athletic patients and geriatric patients.
Product development and expansion in 2007—a particular boost to the company’s extremities business—were the result of strategic acquisitions. For example, in April last year, the company purchased Darco International, Inc.’s reconstructive foot surgery business for approximately $17 million in cash. The company also entered into an agreement with Regeneration Technologies, Inc. (RTI), a Florida-based developer of orthopedic and biologic implants, to develop advanced xenograft implants for use in foot and ankle surgeries. Under the agreement, Wright Medical will design and distribute the implants, while RTI will develop, manufacture and supply Wright’s designs. Wright will market the new foot and ankle implants under the Cancello-Pure brand.
Acquisitions continued in 2008. In June, the company acquired certain assets of A.M. Surgical, Inc., a Smithtown, NY-based firm that develops endoscopic soft-tissue release products for foot and ankle surgeons. Wright has marketed A.M. Surgical’s foot and ankle products since October 2007. The purchase consisted of an initial cash payment of $2.1 million and potential additional cash payments, not to exceed $700,000, based on future financial performance of the acquired assets.
In April, Wright completed the buyout of Inbone Technologies, Inc. for an initial cash payment of $24 million, guaranteed minimum future payments of $3.7 million and potential additional cash payments based on future operational and financial performance. The Inbone acquisition marked the seventh business development initiative targeted for the foot and ankle surgery market by Wright in the past year and a half. Key products for Wright Medical will be the Inbone Total Ankle system and the Inbone Intra-osseous Fusion Rod and Plate system.