Zimmer Biomet CEO Bryan Hanson: Growth in 2019 goes beyond the knee & hip markets, product launches

Spinal Tech

Zimmer Biomet CEO Bryan Hanson gave a presentation at the 37th Annual J.P. Morgan Healthcare Conference in San Francisco Jan. 8.

Mr. Hanson discussed the current state of the $7.9 billion company and where it's headed in the future. Here are seven things to know about Zimmer Biomet in 2019:

1. The company's revenue is weighted toward the knee and hip lines; it aims to diversify further in the future. Thirty-five percent of the company's revenue comes from knee sales and 24 percent is attributable to hip sales; just 10 percent of the revenue comes from spine sales while dental accounts for 5 percent. However, Mr. Hanson plans to change that. Hips and knees are a slowing market, and the company is poised to grow other segments.

2. More than half — 61 percent — of company revenue comes from the Americas. Mr. Hanson says the company aims to grow revenue from other markets, including Europe which accounts for 23 percent of its revenue and the Asian Pacific accounting for 16 percent.

3. While Zimmer Biomet is a No. 1 player in the hips and knees markets, it has significantly less presence in sports medicine and trauma. Mr. Hanson sees this as an opportunity to leverage brand recognition for a deeper presence in those markets.

4. For the first year of his tenure, Mr. Hanson spent significant time examining the company's culture and making leadership changes. He restructured several aspects of the organization and appointed new leaders to align the company with its core mission and values.

5. In mid-2018, Zimmer Biomet received a warning letter from the FDA about its North Campus facility. At the conference, Mr. Hanson reiterated the company's commitment to remediation and updating the facility to align with the FDA's standards for another inspection at the end of the year.

6. Over the next year, Zimmer Biomet expects to achieve FDA clearance for the Rosa Robotic system applications in the spine and knee; the system is already approved for brain surgery applications. After achieving clearance, the company aims to have a limited release before rolling out a full launch at the end of the year.

7. Mr. Hanson plans to transform the company and become a top quartile performer in total shareholder returns. "We have to stabilize the business and get 2 percent to 3 percent growth in 2020, and then focus on the five-year plan that changes the trajectory of revenue growth," he said. He sees increasing free cash flow as the ammunition to stimulate further growth.

8. In 2018, Zimmer Biomet formalized a relationship with Apple to develop an application for joint surgery patients. The company aims to double down on this collaboration and focus on the "unique ecosystem" Zimmer Biomet brings to the table. In the future, Mr. Hanson sees the company focusing more on building the customer platform than product launches. "We are moving away from product launches to solutions that will differentiate us from our competitors," he said.

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