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Recently, leading orthopedic medical device giant Zimmer Holdings (ZMH - Analyst Report) launched a new injectable gel to treat osteoarthritis of the knee. This single injection medicine, known as Gel-One Cross-linked Hyaluronate, is expected to be a big relief for the knee arthritis patients, helping them improve knee join function and restore mobility.
The company is optimistic about this new invention, which is expected to procure better result in the challenging US knee market. According to Zimmer, Gel-One Hyaluronate will act as a supplement to natural synovial fluid. This product is particularly effective on patients who are not responsive to conventional treatments like non-pharmacologic therapy, non-steroidal anti-inflammatory drugs (NSAIDs) or simple analgesics such as acetaminophen.
We are also encouraged to find the result of a clinical study, which showed efficacy of Gel-One Hyaluronate over a Phosphate Buffered Saline control (PBS). Result showed that, on an average, there is almost 40% reduction in pain from baseline in patients who are being treated with Gel-One Hyaluronate.
Zimmer is making continuous efforts to strengthen its pipeline with the launch of new products under the reconstructive implant division. Moreover, the ongoing shift in demand to premium products, such as Prolongand Vivacit-EHighly Crosslinked Polyethylene, Trabecular MetalTM Technology products, high-flex knees, porous hip stems and the introduction of patient specific devices, is expected to continue to positively affect sales growth. Along with the focus on driving Reconstructive and emerging businesses, Zimmer is exploring opportunities to expand its reach into early intervention products.
The company should benefit from favorable long-term trends that point toward sustained growth driven by obesity, wear and tear of joints from more active lifestyles, growth in emerging markets, new material technologies, advances in surgical techniques and proven clinical benefits of joint replacement procedures.
More importantly, the percentage of population over age 65 in the U.S., Europe, Japan and other regions is expected to nearly double by the year 2030. In the U.S., the oldest baby boomers are now pushing retirement age. We believe that Zimmer is benefiting from this aging demography since knee and hip joints tend to wear out with age and therefore require replacement.
However, the intense competition in the orthopedic market and pricing pressure remain areas of concern. The company faces tough competition from players such as Stryker Corporation (SYK - Analyst Report).
Zimmer currently carries a Zacks Rank #3 (Hold). However, other medical device stocks worth a look are Given Imaging (GIVN - Snapshot Report) and Cytokinetics Incorporated (CYTK - Snapshot Report). Both these stocks carry a Zacks Rank #1 (Strong Buy).