Earnings Calls In Brief
This article was originally published in The Gray Sheet
Executive Summary
Stryker resolves one of four FDA warning letters: Stryker is one step closer to resolving its ongoing FDA compliance issues now that the agency has lifted one of four warning letters received since March 2007, the company reported Oct. 20. The orthopedic device maker's biotech division received the warning letter, which cited quality system and compliance violations, in April 2008 (1"The Gray Sheet" May 18, 2009). "We view this as an important first step in our goal of resolving all of the outstanding warning letters," CEO Stephen MacMillan said during the firm's third-quarter earnings call. Stryker initiated a three-year, roughly $200 million plan in 2008 to overhaul its quality standards (2"The Gray Sheet" Feb. 2, 2009). "The investments we're making seem to be paying dividends ... but we still have work to do," commented Katherine Owen, VP of strategy and investor relations. Stryker reported third-quarter sales were flat at $1.65 billion. The total includes a 5.5% increase in orthopedic implant sales to $1.02 billion, offset by a 7.7% dip in MedSurg equipment revenue to $637 million. "Clearly, reduced hospital capital spending continues to impact the MedSurg business," which makes up 39% of the company, noted CFO Curt Hartman
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Piper Jaffray Healthcare Conference In Brief
Boston Scientific strategic review: Firm expects to complete a strategic review of its business, including "redoing the pipeline," by year-end, CEO Ray Elliott said during a Dec. 1 presentation at the Piper Jaffray Healthcare Conference in New York. Elliott, who took over the chief executive role from Jim Tobin in July, has cited improving marketing operations as a main priority; however, he also has signaled an interest in product diversification to include more women's health and urology projects (1"The Gray Sheet" July 27, 2009). While the company aspires to grow sales in the mid-single digits, "that's going to require some product mix changes and some emphasis changes, because it's very tough to get mid or even higher single-digit numbers with two-thirds of the business obviously positioned" in drug-eluting stents and cardiac rhythm management markets, which have lately experienced slower growth, he said. Boston Scientific recently reported third quarter sales of $2.025 billion, up 2% (2"The Gray Sheet" Oct. 26, 2009)
Stryker Unit Charged With Fraud, Misbranding For Illegal Marketing Scheme
Stryker's biotech division and four former and current executives face charges of wire fraud, conspiracy, device misbranding and false statements related to the marketing of its OP-1 orthopedic bone growth biologic/device combination products