Medical technology company Conmed Corporation (CNMD) reported that its Linvatec arthroscopy division has launched the GENESYS Matryx interference screw. The new product is primarily indicated for fixing soft tissue in the reconstruction of the anterior cruciate ligament (“ACL”) and posterior cruciate ligament (“PCL”) of the knee. The smaller diameter screws are also indicated for reattachment of soft tissue to bone, offering flexibility for repair in other parts of the body.
Interference screw fixation is often used in the reconstruction of a damaged ACL or PCL of the knee. The placement of the ligament and interference screw into the bone tunnel facilitates natural healing of the failed ligament. The GENESYS Matryx interference screw supports bone formation, leading to bone reconstruction and integration of the replacement ligament.
The new interference screws represent significant advancement in biocomposite material technology. Leveraging a proprietary microfiltration process, Linvatec is able to make one of the smallest biocomposite interference screws currently available on the market for fixation of ACL and PCL grafts.
Conmed is a medical products maker specializing in surgical instruments and devices. Its second-quarter fiscal 2011 adjusted earnings of 35 cents a share matched the Zacks Consensus Estimate while profit surged roughly 19% year over year on the back of higher revenues and lower restructuring costs.
Revenues rose narrowly year over year to roughly $183 million, missing the Zacks Consensus Estimate. Growth across Powered Surgical Instruments, Electrosurgery and Endosurgery businesses was partly masked by lower Arthroscopy sales. Management’s cost-cutting initiatives contributed to an expansion in operating margin.
Conmed is experiencing healthy growth for its single-use disposable products. A large percentage of the company’s products are designed for minimally invasive surgery, a trend that is extremely popular these days.
However, Conmed operates in a highly-competitive orthopedic surgery market against much larger, more technically-competent companies, such as Johnson & Johnson (JNJ), Smith & Nephew (SNN) and Stryker Corporation (SYK). Moreover, it is exposed to pricing pressure and a still weak hospital capital purchasing environment.
Given the challenging capital purchasing backdrop, the company has trimmed its revenue expectation for fiscal 2011. Currently, we are Neutral on Conmed.
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