VOL. 128 | NO. 217 | Wednesday, November 06, 2013
Sales Can’t Save Wright’s Quarter
By Amos Maki
Memphis-based Wright Medical said that while sales soared in the third quarter, its quarterly loss swelled to $130 million due to the write-down of its recent acquisition of bone graft maker BioMimetic.
While sales soared in the third quarter, Arlington-based Wright Medical said its quartely loss swelled to $130 million.
(Daily News/Andrew J. Breig)
Sales for the medical device maker’s knee and ankle business helped sales in the third quarter jump to $57.6 million, up 13 percent. Wright Medical said sales through the first nine months of the year totaled $174.5 million, up from $155.7 million over the same period last year.
Sales for Wright Medical’s core foot and ankle business in the quarter hit $35.2 million, up from $29 million in the same quarter last year. For the year, foot and ankle sales increased roughly 23 percent to $107.6 million.
“Our third quarter results again demonstrated the growth potential of the go-forward business with sales from continuing operations and global foot and ankle increasing 14 percent and 22 percent, respectively, on a constant currency basis,” Wright Medical president and CEO Robert Palmisano said in a release. “Notably, we were able to accelerate our growth rate in our U.S. foot and ankle business despite the ongoing transition activities as a result of the MicroPort transaction.”
While sales increased, Wright Medical said its financial losses increased in the third quarter due to the write-down of its recent acquisition of bone graft maker BioMimetic. Wright's quarterly loss grew to $130 million, or $2.80 per share, from a net loss of $5.3 million, or 14 cents per share, in the third quarter of 2012.
The company reported a $137.9 million write-down on the value of the company's BioMimetic acquisition, which became final in March.
Minus the write-down, and other one-time costs, the company would have lost 18 cents per share.
Wright maintained its fiscal year 2014 guidance of a loss between 55 and 59 cents per share, which is in line with analysts’ expectations.
Wright is awaiting U.S. regulatory approval for the Augment Bone Graft product, which would be used as an alternative product for use in foot and ankle fusions. Augment Bone Grant was acquired with BioMimetic and was designed to be an alternative to the use of a patient's own tissue.
“We were pleased to see another quarter of strong international growth with positive progress in market development in several key countries.”
Wright Medical, President and CEO
Wright said the Food and Drug Administration intends to hold a dispute resolution panel to address the company's product application, which was originally rejected in August. The company said it will work with the FDA to schedule the panel as soon as possible.
“We appreciate the FDA’s willingness to grant our request to convene a Dispute Resolution Panel in connection with our appeal of the not approvable decision for Augment Bone Graft,” Palmisano said. “We look forward to working with the FDA to schedule the panel meeting as soon as possible.”
Wright Medical announced in October that it had reached a $75 million agreement to buy the French company Biotech International, a privately held manufacturer of surgical implants and advanced fixation technologies that deal with fractures.
In addition, Wright Medical and MicroPort Scientific Corp. are awaiting regulatory approval for the proposed $290 million sale of Wright’s knee and hip division, OrthoRecon, to a division of Shanghai-based MicroPort.
“We were pleased to see another quarter of strong international growth with positive progress in market development in several key countries,” Palmisano said. “In addition, our recent agreement to acquire Biotech International represents another important step in the transformation of our business to a dedicated Extremities-Biologics company exclusively focused on extending our leadership position in this fast growing and underpenetrated market and is an important addition from which our international business can continue to grow.
“During the fourth quarter, we look forward to closing the transactions with MicroPort and Biotech and exiting the year as a high-growth, pure play Extremities and Biologics company. We will continue to focus on accelerating growth opportunities in this area, including increasing U.S. foot and ankle sales productivity and extending the global reach and penetration of our products in key international markets.”
Wright Medical won approval earlier this year to relocate its corporate headquarters from Arlington to Memphis. The company will maintain its manufacturing facilities in Arlington.