Recently, leading orthopedic medical device giant -
) has won Food and Drug Administration's (FDA) 510(k) clearance
for its latest Patient Specific Instruments (PSI) Shoulder
system. Since May 2013, Europe has been enjoying limited
availability of this shoulder system and with the 510 (k)
clearance, this device will now be easily available to orthopedic
surgeons across the U.S.
According to the company, this PSI Shoulder device complements
the Trabecular Metal Reverse Shoulder system for reverse shoulder
arthroplasty (RSA) procedures. This advanced shoulder
device with its 3D visualization software allows patient-specific
surgical plans and customized instrument guides to facilitate
placement of the implant.
Zimmer's Trabecular Metal Reverse base plate implant system
has been leading the RSA market for the last two years and each
year, more than thousands of patients benefit from the Reverse
Shoulder Arthroplasty. Thus, the success of this PSI device,
which complements the Trabecular Metal Reverse base plate implant
system, is unquestionable and its contribution will prove
indispensable to the future expansion of the company's growing
At present, Zimmer is strengthening its product portfolio to
drive its top line. Moreover, the ongoing shift in demand to
premium products, such as Prolong and Vivacit-E Highly
Crosslinked Polyethylene, Trabecular MetalTM Technology products,
high-flex knees, porous hip stems, and the introduction of
patient specific devices, is expected to continue to advance
sales growth. Along with the focus to drive Reconstructive and
emerging businesses, Zimmer is exploring opportunities to expand
its reach into early intervention products.
We are also encouraged with the favorable long-term trend that
points toward sustained growth for Zimmer, driven by obesity,
wear and tear of joints from more active lifestyles, growth in
emerging markets, new material technologies, advances in surgical
techniques, and proven clinical benefits of joint replacement
More importantly, the percentage of population over the age of
65 in the U.S., Europe, Japan, and other developed regions is
expected to nearly double by 2030. In the U.S., the oldest baby
boomers are now pushing retirement age. We believe that Zimmer is
benefiting from this aging demography since knee and hip joints
tend to wear out with age and therefore require replacement.
Meanwhile, in order to streamline its business, Zimmer plans
to continue with its global restructuring program. Several new
products are slated for launch that will have a positive impact
on the top line. However, macroeconomic uncertainties and
unfavorable currency continued to adversely impact sales during
the last reported quarter.
Zimmer has a Zacks Rank #3 (Hold). Other medical stocks such
), with a Zacks Rank #1 (Strong Buy) and
MWI Veterinary Supply Inc.
), both carrying a Zacks Rank #2 (Buy), are worth
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