On May 31, 2016, we issued an updated research report on Plainsboro, NJ-based Integra LifeSciences Holdings CorporationIART - one of the leading regenerative medicine manufacturers in the world. The company develops, manufactures and markets cost-effective surgical implants and medical instruments.
Integra commenced 2016 on a mixed note. While earnings missed the Zacks Consensus Estimate, revenues were ahead of the same in the first quarter. Moreover, the strong year-over-year improvement in revenues is indicative of the company's healthy growth via organic and inorganic means across all its segments. However, foreign exchange headwinds continue to pose a threat to the stock.
Despite a challenging foreign exchange scenario, the company witnessed strong 8.5% revenue growth at constant exchange rate or CER in the Specialty Surgical Solution business in first-quarter 2016. This was largely driven by higher sales in its dural repair franchise, which grew in low teens year over year on increased volumes stemming from new customer wins for both DuraGen and DuraSeal.
Additionally, Integra is successfully emerging through certain key developments on the overseas front. In the first quarter, despite challenges in Brazil and Mexico, the company's international business grew 7% organically with high-teen growth in the Asia Pacific on strong performance in China, Japan and Korea. Integra also witnessed considerable progress in its Specialty Surgical Solutions business on account of the French medical device line, MicroFrance's buyout and nice uptake of MAYFIELD 2 cranial stabilization device in the Asia Pacific.
Integra is currently running its business per a three-pillar strategy − optimize, execute and accelerate growth. According to management, these three pillars support the company's strategic initiatives to optimize its infrastructure, deliver its commitments through improved planning and communication, and grow by introducing new products through internal development, geographic expansion and strategic acquisitions.
On the flip side, many of Integra's manufacturing, development or research facilities are vulnerable to natural disasters or unwanted events, which depending on the extent of their severity, might force the company to cease the development and manufacturing of some or all of its products. Moreover, it faces tough competition in the surgical implants and medical instruments market. Further, consolidation trends in the industry could lead to intense pricing pressure and competition for Integra.
Integra currently carries a Zacks Rank #3 (Hold).
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