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Recently, leading orthopedic medical device giant – Zimmer Holdings (ZMH - Analyst Report) launched its full range of ankle replacement system and instrument system at the 2013 American Academy of Orthopaedic Surgeons annual meeting in Chicago. This innovative ankle replacement product, known as Trabecular Metal Total Ankle replacement and instrument system, designed to repair disorder, reduce pain, and preserve the flexion and extension movement of the ankle joint is likely to be a big relief for the orthopedic patients in regaining mobility.
The company is optimistic about this new invention, which is expected to procure better results even amid the challenging US extremity market. According to Zimmer, this ankle replacement and instrument system is the first of its kind ankle replacement system that combines cutting-edge techniques of knee and hip replacement with total ankle arthroplasty, including advanced bearing materials and customized shapes and sizes.
Further, Zimmer encouragingly noted that the modular articular surface of this new product is built with Prolong Highly Crosslinked Polyethylene, which has an excellent history of more than 10 years as a bearing material in total knee arthroplasty. In addition, as the system is implanted through a lateral surgical approach, it provides the full view of the ankle joint leading to accurate implantation.
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 the 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 and Cytokinetics Incorporated (CYTK - Snapshot Report). Both these stocks carry a Zacks Rank #1 (Strong Buy).