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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