Johnson & Johnson sets sights on robotics in 2020 in orthopedics and beyond


Johnson & Johnson reported flat orthopedic sales for the fourth quarter of 2019, and the full year orthopedic sales took a 0.5 percent dip.

During the fourth quarter and full year earnings call, executives including Vice President of Investor Relations Christopher DelOrefice and Chairman and CEO Alex Gorsky, discussed the orthopedics line's performance as well as the company's focus on robotics for 2020.

Mr. DelOrefice attributed the 5.8 percent fourth quarter decline in spine sales partially to a one-time favorable pricing-related true-up during the fourth quarter of 2018, which he said negatively impacted global growth by 250 basis points. "Excluding this impact, performance for the quarter was in line with the full year," he said, according to a transcript by Seeking Alpha. "While we lost share in the quarter, we continue to see positive uptake of newer products and are pleased with the strong start of our newly launched Symphony surgical system for use in posterior cervical spine procedures."

He also mentioned pricing pressure will continue to impact orthopedics lines, and the U.S. pure price in spine dropped around 3 percent for the quarter. Trauma prices dropped 2 percent in the fourth quarter, which was consistent with third quarter declines as well. However, hip and knee sales were both flat, which was up from third quarter sales.

Beyond orthopedics, Mr. DelOrefice focused on robotics and digital surgery as an area with strong growth potential in the next year. The company acquired Auris Health, a robotic technology developer, as well as the remaining stake in Verb Surgical last year to strengthen the line.

Johnson & Johnson CEO Alex Gorsky also touched on robotics during the question and answer section of the call. He said the acquisitions were "off to a great start" and he was thrilled with the work Dr. Fred Moll has done with the robotics section.

"We think combining Auris and Verb really helps ensure that we have a very strong role in the next generation of the digital surgery platform and ongoing development," he said. "Our teams are working now together in a really comprehensive way. We do look at this as a platform that is something that will be in place for the next several decades. Therefore, it's really important that we step through this the right way, and what I would say is the early results from the collaboration and partnership that we're seeing between these teams is very encouraging."

He also said Johnson & Johnson's orthopedics robotic platform Velys is making progress. "We think that it's going to offer a portable, low-cost system that's easy to use [and] will improve accuracy," he said. "It is also a nice combination to ensure the surgeon remains intimately involved. And if we look at the training and technical support, it's something that will be easily coordinated between ORs and surgeons."

He expects the company to make regulatory submissions on Velys mid-year. The company also noted that on May 13 at the company's Medical Device Business Review Day event in New York, it plans to provide more information about its digital platform.

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