Wright’s Losses in Q3 Widen Despite Sales Increase

For the third quarter of 2013 (ended Sept. 30), Wright Medical Technology Inc. posted wider losses due to the write-down of its recent acquisition of bone graft maker BioMimetic Therapeutics Inc. The numbers also were impacted by the sale of the company’s hip and knee business to MicroPort Medical, which Wright now reports as discontinued operations.

While income dropped, the company reported that sales increased 13 percent in the quarter to $57.6 million.

Despite the sales uptick, Wright’s quarterly loss grew to $130 million, or $2.80 per share, from a net loss of $5.3 million, or 14 cents per share, in the third quarter of 2012. The company’s results included a $137.9 million write-down on the value of the company’s BioMimetic acquisition, which was completed in March this year.

Excluding the write-down and other one-time costs, the company would have lost 18 cents per share, which was in line with estimates by Wall Street analysts who expected a per-share loss of 18 cents on sales of $56.3 million, according to FactSet.

Wright maintained its fiscal year 2014 guidance of a loss between 55 and 59 cents per share. Analysts are looking for a loss of 56 cents per share.

Wright has been working to win U.S. regulatory approval for the Augment Bone Graft product as an alternative product for use in foot and ankle fusions. The product was acquired with BioMimetic and is designed to be an alternative to the use of a patient’s own tissue, known as an autograft.

Wright reported on Oct. 4 that the U.S. Food and Drug Administration (FDA) would hold a dispute resolution panel to address the company’s product application, which was rejected in August. The company said it would work with the FDA to schedule the panel as soon as possible.

“Our third quarter results again demonstrated the growth potential of the go forward business with sales from continuing operations and global foot and ankle increasing 14 and 22 percent, respectively, on a constant currency basis. Notably, we were able to accelerate our growth rate in our U.S. foot and ankle business despite the ongoing transition activities as a result of the MicroPort transaction,” said Robert Palmisano, president and CEO. “We were pleased to see another quarter of strong international growth with positive progress in market development in several key countries. In addition, our recent agreement to acquire Biotech International represents another important step in the transformation of our business to a dedicated extremities-biologics company focused on extending our position in this market and is an important addition from which our international business can grow.”

In October, Wright finalized a $75 million deal to purchase Biotech International, a privately held French orthopedic extremities company that makes implants and instruments for foot, hand and trauma surgery, as well as a line of implantable bone substitutes. The transaction is expected to close by the end of the year.

Arlington, Tenn.-based Wright Medical is focused on the foot and ankle market.