The skies got a little brighter for the orthopedic industry Friday after Warsaw-based Biomet Inc. reported strong quarterly sales growth of 3.4 percent. That news sparked a small surge in the stock prices of two other Warsaw-based orthopedics companies.
Sales in the industry have been depressed since 2008 by the recession, which caused many jobless Americans to hold off on elective hip and knee surgeries. Also, an industry settlement with the U.S. Department of Justice tightened rules on the industry’s marketing of products to orthopedic surgeons.
But Biomet’s results were greeted as a signal that the chill on industry sales may be thawing.
Biomet, which is privately held but has public debt, reported $739.5 million in sales for the three months ended May 31, up from $715.2 million in the same quarter a year earlier.
The company enjoyed 7-percent growth in the United States, including an 8-percent bump in sales of hip implants and a 6-percent rise in sales of knee implants. European sales fell 2 percent, excluding the impact of changes in currency exchange rates.
The results augur well for the whole group of orthopedic companies, Piper Jaffray & Co. analyst Matt Miksic wrote in a research note. Most other orthopedic companies will report financial results in July.
"While the group has not always tracked perfectly with Biomet, the results last quarter were directionally consistent with improving market trends, and therefore we are encouraged by the continued sequential improvement from Biomet,” Miksic wrote, according to MarketWatch.
Investors shared the sentiment. They traded up shares of Warsaw-based Zimmer Holdings Inc.—the industry’s biggest player—4.2 percent on Friday. Zimmer shares closed at $63.20 on Friday.
Also, Warsaw-based Symmetry Medical Inc., a supplier to the orthopedic implant makers, saw its stock rise 3.7 percent on Friday to $8.22 per share.
Biomet will release details of its quarterly profit on July 17.
The company also reported that it completed the initial closing of its $280 million acquisition of DePuy Orthopaedics Inc.’s worldwide trauma business. The closing includes the unit’s operations in the United States, the United Kingdom and four other countries.
“Trauma is one of the fastest-growing market segments in orthopedics and at the core of orthopedic care,” Biomet CEO Jeffrey Binder said in a prepared statement.