Stryker reported a 7.9 percent sales increase in the third quarter of 2018, hitting $3.2 billion. The company reported success with its Mako Total Knee technology as well as discussed the future of its spine business after acquiring K2M during the quarterly earnings call.
The call included Chairman and CEO Kevin Lobo, Vice President of Strategy and Investor Relations Katherine Owen and Vice President and CFO Glenn Boehnlein. Here are seven key quotes from the call, as transcribed by Seeking Alpha.
Katherine Owen on Mako: "Looking at U.S. procedures in Q3, Mako Total Knee procedures approximated 11,300 bringing the year-to-date total to over 30,000 with all Mako procedures topping 18,700 in the quarter, total knees represent the majority of roughly 60 percent. Utilization rates also continue to increase, up about 40 percent year-over-year. We are also pleased with the increasing Mako Total Knee data supporting both the clinical and economic benefits."
KO on Mako's competitive advantage when asked about Zimmer Biomet potentially launching a robot: "We've got close to 600 globally and continue to sell new robots with a healthy pipeline. And now you see the clinical data, the early clinical data come in with our clinical and economic benefit that is specific to our robot. And so obviously, competition is coming. You don't grow ahead of the market at the rate we are without people thinking that maybe they need a robot, but this is a very sticky business once we get a robot in there."
KO on hospitals purchasing a second robot: "The challenge also becomes maybe with the surgeon champion that he could get the robot whenever he wanted, but then slowly his colleagues start to close in and want to use it. Sometimes they are limited in how many cases they can do on a robot because they don't have enough robot time and that's usually the precursor to the hospital bringing on another robot."
Kevin Lobo on the Invuity acquisition: "With Invuity, it is a slightly different technology, but it is a call point. We already have our sales force calling in that area. And so it's not broadly different. We'd love to bring technologies into existing sales forces. That has been a real key formula for success for Stryker for a long time."
KL on winning in spine: "If you provide a good cadence of innovation, you will win in the spine business. There's still a huge amount of unmet needs. It's the biggest market within orthopedics and that's why we like K2. Obviously [the acquisition] gives us a bit more market share. They are stronger in certain parts of the country where we are weak. And so you have a sales force that can sell a broader range of products that is exciting and should increase our growth."
KO on integrating K2M and related synergies: "We have [similar products] but the sales force is really thrilled to have a refresh to their product portfolio and then broader footing in the degenerative deformity segment of the market that really drives a lot of thought leaders. So when you add that altogether along with our experience in doing deals and integrating deals, we think that will help to limit the dissynergies and ensure that this integration goes well and we get back to above-market growth."
Glenn Boehnlein on robots in the ASC: "Medicare still doesn't, as you know, cover procedures in the surgery centers. If that change were to occur, I think that would create a more meaningful shift. But we're already starting to place MAKOs in surgery centers and that's the space we know fairly well from our sports medicine franchise."