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FDA Nod for Orthofix's G-Beam to Boost Extremity Fixation SBU
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Fortifying the Extremity Fixation portfolio, Orthofix International N.V. (OFIX - Free Report) recently announced the receipt of FDA 510(k) clearance for the G-Beam Fusion Beaming System. This is in line with the company’s strategy to gain traction in the Charcot and Diabetic foot market segments.
G-Beam system, an internal fixation system, aids in treating the Charcot foot condition. The G-Beam devices provide proper alignment, fixation and stabilization, when implanted in the medial and lateral columns of the foot and hence, reduce chances of an amputation.
Per management, leveraging on the existing product lines, like TrueLok and the TL-HEX, the FDA approval for G-Beam devices will boost the internal fixation segment for Charcot foot treatment, as well as the top-line contributions from the Extremity Fixation SBU.
Extremity Fixation SBU at a Glance
Orthofix’s Extremity Fixation strategic business unit (SBU) manufactures and distributes orthopedic products for treating fracture deformity correction, repair and bone reconstruction conditions. The company continues to witness impressive top-line contributions from this unit. In 2017, the segment accounted for 24% of total net sales. The strength in the pediatric, and foot and ankle strategic product areas, along with solid performance in the business in the United States, drove the segment’s performance.
Furthermore, management believes improving instrument set and inventory management in the Spine and Extremity Fixation SBU will expand the company’s gross margins in 2018.
Market Potential
Per the company,severe neuropathy or nerve damage can cause Charcot foot. Moreover, it is a common diabetic foot complication with as many as 0.08-7.5% diabetic patients suffering from the condition. Per some studies, 13% of all diabetic patients and 29% of the neuropathic patients have been reported with this condition.
We encouragingly note that the number of patients aged 18-99 years and diagnosed with diabetes is expected to rise to 693 million by 2045 from 451 million in 2017 (per the International Diabetes Foundation). In view of the above data, we believe the FDA approval has come at an opportune time for the company to cash in on the bountiful opportunities in the niche market.
Price Performance
Over the past three months, Orthofix’s shares have outperformed the industry it belongs to. The stock has gained 6% compared with the industry’s 1.7% rise.
Zacks Rank & Key Picks
Orthofix carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) , athenahealth, Inc. and Varian Medical Systems, Inc. .
athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.
Varian Medical has a long-term expected earnings growth rate of 8%. The stock carries a Zacks Rank of 2.
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FDA Nod for Orthofix's G-Beam to Boost Extremity Fixation SBU
Fortifying the Extremity Fixation portfolio, Orthofix International N.V. (OFIX - Free Report) recently announced the receipt of FDA 510(k) clearance for the G-Beam Fusion Beaming System. This is in line with the company’s strategy to gain traction in the Charcot and Diabetic foot market segments.
G-Beam system, an internal fixation system, aids in treating the Charcot foot condition. The G-Beam devices provide proper alignment, fixation and stabilization, when implanted in the medial and lateral columns of the foot and hence, reduce chances of an amputation.
Per management, leveraging on the existing product lines, like TrueLok and the TL-HEX, the FDA approval for G-Beam devices will boost the internal fixation segment for Charcot foot treatment, as well as the top-line contributions from the Extremity Fixation SBU.
Extremity Fixation SBU at a Glance
Orthofix’s Extremity Fixation strategic business unit (SBU) manufactures and distributes orthopedic products for treating fracture deformity correction, repair and bone reconstruction conditions. The company continues to witness impressive top-line contributions from this unit. In 2017, the segment accounted for 24% of total net sales. The strength in the pediatric, and foot and ankle strategic product areas, along with solid performance in the business in the United States, drove the segment’s performance.
Furthermore, management believes improving instrument set and inventory management in the Spine and Extremity Fixation SBU will expand the company’s gross margins in 2018.
Market Potential
Per the company,severe neuropathy or nerve damage can cause Charcot foot. Moreover, it is a common diabetic foot complication with as many as 0.08-7.5% diabetic patients suffering from the condition. Per some studies, 13% of all diabetic patients and 29% of the neuropathic patients have been reported with this condition.
We encouragingly note that the number of patients aged 18-99 years and diagnosed with diabetes is expected to rise to 693 million by 2045 from 451 million in 2017 (per the International Diabetes Foundation). In view of the above data, we believe the FDA approval has come at an opportune time for the company to cash in on the bountiful opportunities in the niche market.
Price Performance
Over the past three months, Orthofix’s shares have outperformed the industry it belongs to. The stock has gained 6% compared with the industry’s 1.7% rise.
Zacks Rank & Key Picks
Orthofix carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) , athenahealth, Inc. and Varian Medical Systems, Inc. .
Bio-Rad Laboratories sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.
athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.
Varian Medical has a long-term expected earnings growth rate of 8%. The stock carries a Zacks Rank of 2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>