Wright Medical Group, Inc.
) is continuing with its fight for obtaining pre-market approval
(PMA) for its Augment Bone Graft, a bioengineered bone graft for
foot and ankle fusion surgeries.
Recently, the global orthopedic device company reached an
agreement with the Office of Device Evaluation (ODE) of the U.S.
Food and Drug Administration (FDA), where ODE will accept a
further amendment to the PMA application for Augment Bone Graft
in lieu of proceeding with the Dispute Resolution Panel (DRP),
scheduled for the week of May 19, 2014. However, the agreement
with ODE is subject to final approval by the FDA appeal
authority, which is expected shortly.
The PMA amendment will be submitted on Mar 31, 2014. It will
consist of analyses of pre-existing radiographic films of
clinical study patients at pre-operative and post-operative
ODE has promised an expeditious review of the PMA amendment and
plans to decide on the PMA within 180 days after its submission.
Wright Medical Group plans to renew the DRP process if the PMA
amendment fails to result in a reversal of ODE's previous
decision of non-approval.
Augment Bone Graft is designed as an alternative to autograft
(use of tissue from another part of a patient's body) in
orthopedic surgeries. It is produced by medical device maker
BioMimetic, acquired by Wright Medical Group earlier last year
for roughly $190 million in cash and stock.
Last year, FDA had issued a "not-approvable letter" in response
to the PMA application submitted by Wright Medical Group for
Augment Bone Graft, indicating problems with the clinical study.
According to FDA, the clinical study supporting Augment Bone
Graft engaged low risk population, who may not have needed either
autograft or Augment Bone Graft. FDA suggested that Wright
Medical Group may need to execute a new study of Augment Bone
Graft with a high-risk population.
Wright Medical Group posted a broader loss of $7.9 million or 17
cents per share for the fourth quarter of 2013 compared with $1.9
million or 5 cents in the same quarter of 2012. However, the loss
was narrower than the Zacks Consensus Estimate by a penny.
For full year 2013, Wright Medical Group posted a wider adjusted
loss of $25.2 million or 56 cents per share compared with $3.8
million or 10 cents per share in 2012. It is also narrower than
the Zacks Consensus Estimate of a loss of 57 cents per share.
Revenues in the quarter went up 16.2% (17% in constant currency)
to $67.8 million, exceeding the Zacks Consensus Estimate of $65.0
million. The revenue growth was driven by strong sales of foot
and ankles product line.
Revenues in the year grew 13.2% to $242.3 million, higher than
the Zacks Consensus Estimate of $239 million, solely driven by
higher foot and ankle, and other product line sales.
For 2014, Wright Medical Group expects revenues in the range of
$305-$312 million, reflecting a growth of 26 to 29% (including
Solana, OrthoPro and Biotech acquisitions) and an organic growth
of 13 to 15% (excluding Solana, OrthoPro and Biotech) over 2013.
The current Zacks Consensus Estimate is pegged at $305 million.
Currently, the company retains a Zacks Rank #4 (Sell). Some
better-ranked medical product stocks include
). Enzymotec carries a Zacks Rank #1 (Strong Buy), while Covidien
and Stryker carry a Zacks Rank #2 (Buy).
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