Zimmer Holdings Inc.
) introduced its first lateral plate system for the spinal trauma
segment titled Zimmer V2F Anterior Fixation System. The company's
new implant system can be used as a remedy for thoracolumbar
burst fractures, tumors, disc degeneration and other pathologies
of the anterior spine.
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Zimmer's V2F system, built on the company's proprietary
technology, includes a wide range of plates and screws to suit
the varying anatomy of the thoracolumbar spine. The system offers
flexibility for placement of screws at different angles to fit
the patient's anatomical structure. Based on the unique
variable-to-fixed screw and cap technology, the V2F system is
expected to improve patient outcomes.
The company currently enjoys 3% share in the $9 billion spinal
market. This is expected to improve going forward as Zimmer is
working on portfolio expansion and works to gain a foothold in
the emerging markets.
We note that revenues from spinal products (accounting for
approximately 5% of total revenues) have been languishing over
the last few quarters. We are encouraged by Zimmer's attempt to
expand its spinal portfolio to provide some cushion to its
Neutral on Zimmer
Given the challenging macroeconomic conditions, the company's
strategy of new product launches, employment of new technologies
and expansion into emerging markets is likely to pay off. Its
peers in the reconstructive market
Smith & Nephew
) have adopted the inorganic route to battle macroeconomic
The situation is expected to improve as procedural deferrals
reduce with time. As the situation gradually improves, Zimmer is
well poised in the industry to reap the benefits of a recovering
economy. Given the lack of positive driving events, the stock
carries a Zacks Rank #3 (Hold).
Though we remain non-committal on this provider of reconstructive
implant and trauma products we look forward to other players in
the orthopedic space such as
c (HGR) which carries Zacks Rank #2 (Buy).