The COVID-19 pandemic has led to a steep drop-off in elective arthroplasty procedures, affecting Conformis' core knee and hip surgery products "in unprecedented ways," President and CEO Mark Augusti said in a March 23 announcement.
What you should know:
1. As the novel coronavirus spreads, Conformis withdrew its 2020 revenue guidance, as well as its 3 to 6 percent product revenue growth target for the year.
The company had projected that global product revenue would be down 3 percent year over year in the first quarter of 2020, but up 8 percent year over year in the second quarter. These estimated improvements in commercial performance were largely based on a successful knee product launch.
2. Additionally, Conformis furloughed about 80 employees and "substantially" all of its temporary workforce, effective March 23. They will be recalled as needed. Conformis did not furlough employees essential to its development and supply partnership with Stryker.
3. As part of its business contingency plan, Conformis has reduced operational expenses in sales, marketing, quality, clinical, regulatory and administrative areas, and is eliminating, limiting or deferring nonessential expenses. The company has established teams dedicated to addressing the COVID-19 threat and to gathering information from hospital and physician customers.
4. Conformis discovered "low risk" in its supply chain, with the only concerns related to the supply of masks and gowns used in clean-room processes. It ordered extra 3D-printing powder to have on hand. At its facilities, Conformis is enhancing cleaning, restricting vendor and visitor access, cross-training employees, and expanding remote working capabilities.
5. Conformis was unable to provide details about a new product launch schedule, but the device company is preparing for "a potential scenario where capital expenditures by hospitals are constrained, operational efficiency is at a premium and ASC arthroplasty procedures accelerate." Because Conformis' delivery model doesn't rely on limited numbers of instrument sets, the company is well-positioned to help surgeons work through a backlog of cases when elective surgeries resume as normal, Mr. Augusti said.
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