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Integra Faces Multiple Headwinds, SeaSpine Spin-off Strong

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On Sep 9, 2015, we issued an updated research report on Integra LifeSciences Holdings CorporationIART - developer and manufacturer of cost-effective surgical implants and medical instruments. Integra has been witnessing weak revenues across its U.S. Spine and Others segment owing to continued pricing pressure and challenging market conditions.

Although the company delivered impressive second-quarter 2015 financial results which beat the Zacks Consensus Estimate of both earnings and revenues, foreign currency fluctuations continued to adversely affect Integra's international business in the quarter.

To add to the woes, government and private sector initiatives, undertaken to check growing healthcare cost reimbursement issues and the Affordable Care Act (to extend insurance coverage to maximum patients) continue to weigh on Integra's financials. The competitive landscape also remains as an overhang.

However, in Jul 2015, Integra completed the spin-off of its loss making Spine and orthobiologics business and created a new publicly traded company called SeaSpine Holdings Corporation. We believe the spin-off decision stands in good stead for Integra as it will help the company invest more in top-line growth initiatives, allowing for a healthier balance sheet.

On the international front, the company witnessed strong sales during the second quarter, particularly in the regions of Western Europe, Japan, China and Brazil. The successful integration of the MicroFrance acquisition also fueled growth internationally.

Integra has adopted several near-term objectives to align with its 3-pillar strategy. In this regard, the recent acquisitions of MetaSurg, MicroFrance and TEI and their successful integration will likely be a vital contributor to Integra's growth in 2015.

Currently, Integra carries a Zacks Rank #4 (Sell).

Key Picks in the Sector

Some better-ranked stocks in the med-biomed/generic space are Regeneron Pharmaceuticals, Inc. REGN , Gilead Sciences Inc. GILD and Neogenomics Inc. NEO . All the three stocks sport a Zacks Rank #1 (Strong Buy).

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INTEGRA LIFESCI (IART): Free Stock Analysis Report

REGENERON PHARM (REGN): Free Stock Analysis Report

GILEAD SCIENCES (GILD): Free Stock Analysis Report

NEOGENOMICS INC (NEO): 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 Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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