Integra Launches New Vet Products - Analyst Blog

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Medical products company Integra LifeSciences Holdings Corporation ( IART ) recently launched its new Integra Miltex Veterinary Orthopedic Implant line. The step marks an attempt to consolidate its position in the surgical instruments market, which has witnessed disappointing sales performance in the recent past. Presently, the company offers a full line of surgical instruments to the animal health market.

While veterinarians largely adopt dental and surgical instruments under the existing Integra Miltex portfolio, the new implant line is expected to add further strength to the company's surgical instruments range, thereby improving the company's performance in future. Integra's new series is intended for the repair of torn cruciate ligaments and broken or fractured bones in companion animals and comprises plates, screws, lateral suturing products and instruments.

Currently Integra's medical instruments segment is the largest in the US with more than 60,000 instrument varieties and surgical products for hospitals, surgery centers, dental, podiatry, veterinary and physician offices. Its Miltex brand has successfully incorporated the company's regenerative medicine materials into its oral surgery and periodontal offerings.

However, over the past few quarters, Integra has been witnessing several headwinds in the form of weakness in the acute care setting. In the fourth quarter of fiscal 2011, Integra registered lower sales in Instruments, which was down 4% year over year.

Additionally, the challenging macroeconomic environment in Europe and continued softness in the US has resulted in lower sales of surgical instruments for animals. The company is also facing stiff competition from large-cap players like Medtronic ( MDT ), Johnson & Johnson ( JNJ ) and Stryker Corp. ( SYK ) in the specialty instruments market.

To worsen the situation, Integra recently received a warning letter from the US Food and Drug Administration (FDA) pertaining to quality systems and compliance issues at its collagen manufacturing facility in Plainsboro, New Jersey. Earlier in August 2011, the company had received a Form 483 observation from the FDA regarding manufacturing concerns at the collagen manufacturing facility. However, Integra has been prompt in taking action by initiating a remediation plan. It has additional capacity in Puerto Rico, a new plant, where it plans to transfer various operations from its existing facility at Plainsboro.

Although the company is taking several steps like planned product launches and acquisitions to navigate through these difficulties, the challenging macroeconomic environment remains a headwind. Currently, Integra retains a Zacks #4 Rank (Short-term Sell). Considering the company's business model and fundamentals, we have a long-term Neutral recommendation on the stock.


 
INTEGRA LIFESCI ( IART ): Free Stock Analysis Report
 
JOHNSON & JOHNS ( JNJ ): Free Stock Analysis Report
 
MEDTRONIC ( MDT ): Free Stock Analysis Report
 
STRYKER CORP ( SYK ): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: IART , JNJ , MDT , SYK

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