FinancialRecon

Replacement-Joint Market Shows Signs Of Improvement In 3Q

The $11 billion market for replacement hips and knees is showing signs of improvement after a recession-caused slowdown in orthopedic procedures, another subtle indication of an economic recovery.

It may be a slow and steady recovery, but third-quarter reports from big industry players including Zimmer Holdings Inc. (ZMH) hint that it’s underway. As Zimmer explained, after watching procedure rates dip three to four percentage points earlier this year, it looks like there was a one-point recovery in the third quarter.

Procedure volumes are “beginning to thaw in the ortho reconstructive market,” said Joanne Wuensch, an analyst with BMO Capital Markets.

Replacement joints fix often debilitating arthritic problems, but people can push off treatment if they’re concerned about lost insurance, high out-of-pocket charges or taking time off work. These effects have slowed the market this year, although industry executives have said they believe procedures have been deferred rather than canceled.

Zimmer’s better-than-expected third quarter, reported Thursday, came on the heels of reports from Stryker Corp. (SYK) and Johnson & Johnson (JNJ) that also pointed to modest signs of market recovery. Together those companies comprise the bulk of the replacement-joint market. Smaller Biomet Inc., which is privately held and tends to take market share, has also reported for its most recent fiscal quarter, and the U.K.’s Smith & Nephew Plc (SNN) reports on Nov. 6.

Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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