Synthes Reports 9.6% Sales Growth in Local Currencies (3.1% in US$) for First Quarter 2009

 

 

 

Synthes (SWX: SYST.VX) today announced its First Quarter 2009 sales results.

 

    Global sales of US$ 805.0 million increased by US$ 24.0 million vs. prior year

    Increased penetration of new products, sales force expansion, and ongoing educational efforts contributed to growth

    Lower procedure volumes, primarily in the U.S. and Asia Pacific, resulted in slower growth in these reporting regions

    Setup of a manufacturing facility in China is on track

    Product development processes and organizations have been strengthened to enhance Synthes' product offerings with new technology platforms and more differentiated products

    «In-Space» interspinous spacer patient enrollment was completed in pilot U.S. FDA IDE study

 

Michel Orsinger, President and CEO of Synthes, comments on the performance:

 

 

 

* Local currency: 2009 results translated at 2008 foreign exchange rates

 

 

North America achieved single-digit growth in a challenging recessionary U.S. economy. Synthes' continued efforts behind new product introductions and sales force expansion have been partially offset by reduced procedure volumes and increased pricing pressure.

 

In Europe, Synthes continued to gain market share with double-digit local currency growth. The growth was fueled by the ongoing expansion of the sales force, increased educational offerings and the continued success of proven products such as the LCP (Locking Compression Plate) portfolio, PFNA (Proximal Femoral Nail) in Trauma, and Click'X in Spine. A strong winter contributed to the region's growth with increased weather related accidents and associated fractures.

 

Asia Pacific grew at a high single-digit rate in local currency despite two government mandated price decreases for Trauma in Japan. India and Korea had strong performances that helped to fuel the region's growth, which was partially offset by the mild winter and the high unemployment rate in North Asia. The LCP and the PFNA platform continued to deliver attractive growth.

 

Rest of World (Latin America and Middle East) experienced strong growth across all product groups, mainly as a result of the major Latin American countries growing at a double-digit rate in local currency. New product launches across all product groups contributed to the momentum.

 

 

 

 

An important growth contributor in Trauma included the LCP (Locking Compression Plate) platform. Trochanteric Fixation Nail (TFN) and the PFNA (Proximal Femoral Nail), both femoral nails for the treatment of common fractures of the upper leg, also continued with strong performances, benefiting from widespread surgeon acceptance.

 

New products launched included the Variable Angle LCP Two Column Distal Radius Plate, the LCP Hook Plate, and the Headless Compression Screw line extensions. The VA-LCP Two-Column Distal Radius plate, including the variable angle locking plate technology, provides the surgeon with increased flexibility in plate contouring. The LCP hook plate offers controlled compression and a fixed angle construct for smaller osteopenic bones such as the radius, ulna, tibia and fibula. The headless compression screws are used in joint fusions of the foot and for the fixation of intra-articular fractures providing minimal tissue irritation.

 

SynFix-LR, Synapse, Zero-P and the ProDisc®-Total Disc Replacement systems continued to be major contributors to Spine's growth. The ORACLE Spacer System was an important new product launched during the quarter. ORACLE is a lumbar spacer designed to support implantation through a direct lateral approach, with unique instrumentation yielding a minimally invasive surgical procedure. ORACLE is Synthes' first product to address this growing segment.

 

The completion of patient enrollment in the In-Space interspinous spacer pilot U.S. FDA IDE study is a milestone for submitting data to the FDA for a multi-year pivotal trial. The pivotal study enrollment will include more than 500 patients with the goal of seeking FDA approval for commercial sale in the U.S. In-Space has been available in Europe since late 2007, enjoying surgeon acceptance and yielding good clinical results.  

 

CMF's growth resulted to a large extent from the continued growth of its Matrix product portfolio. Matrix is a comprehensive system of plates, screws, and instrumentation for complete craniofacial treatment. MatrixNEURO, for neurosurgical fixation, and MatrixMIDFACE, for plating the midface and craniofacial skeleton, and MatrixMANDIBLE, for oral, maxillofacial and orthognathic surgeries, were significant growth contributors.

 

Condylar Head Add-on (CAS) and Orthodontic Bone Anchor (OBA) systems further enriched CMF's portfolio. CAS for MatrixMANDIBLE is for temporary reconstruction of the mandibular condyle, and OBA is intended to be implanted intraorally and used as an anchor for orthodontic procedures.

 

 

 

 

Synthes continues to remain focused and committed to its core strategies of innovative new product launches, sales force expansion and education. Considering the global economic uncertainties, Synthes remains cautiously optimistic for the future.

 

 

 

Synthes is a leading global medical device company. We develop, produce and market instruments, implants and biomaterials for the surgical fixation, correction and regeneration of the human skeleton and its soft tissues.

 

For details about today's Financial Analyst Phone Conference at 2.00 PM CEST please refer to the Investor Relations Calendar on http://www.synthes.com/html/index.php?id=7326&L=0.

 

A selection of product and company images can be found on

 

 

Gilgian Eisner, Investor Relations, Synthes, Inc.

Phone +41 32 720 4745, Fax +41 32 720 4811

Email: investor.relations@synthes.com

 

 

  

 

Synthes, Inc. management believes certain statements in this media release may constitute "Forward-Looking Statements" within the meaning of the "Private Securities Litigation Reform Act of 1995". These statements include but are not limited to those with respect to the potential for Synthes to offer new products and market existing ones, as well as the expected sales and sales growth of Synthes. These statements are made on the basis of management's views and assumptions regarding future events and business performance as of the time the statements are made. Actual results may differ materially from those expressed or implied. Such differences may result from the ability of Synthes to successfully develop and introduce new products and services and market existing products and services in a competitive marketplace and changes in the economic conditions that may affect the performance of the operations of Synthes. In addition, changes in competitive conditions and regulatory developments may affect future business performance, and changing market conditions may affect the valuation of Synthes securities.

In addition, it should be noted that past financial and operational performance of the company is not necessarily indicative of future financial and operational performance. Synthes undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

The securities of Synthes have been offered and sold outside the United States and have not been and will not be registered under the U.S. Securities Act of 1933, as amended ("Securities Act"). Such securities may not be offered, sold or transferred in the U.S. or to U.S. Persons (as defined in the regulations of the Securities Act), except pursuant to a registration statement filed under the Securities Act or under an applicable exemption under the Securities Act. Hedging transactions involving such securities may not be conducted unless in compliance with the Securities Act. The Synthes securities are deemed "Restricted Securities" as that term is defined in Rule 144 under the Securities Act.