Biomet predicted ‘strong growth’ results

Analysts are predicting strong and steady growth results for medical device maker Biomet, as ageing populations boost demand for orthopaedic devices.

Investors in Biomet have enjoyed on average around a 23 per cent return on their capital during the last five years, a trend which is set to continue into the future with demand for Biomet’s products remaining high.

Morningstar analyst Debbie Wang told Forbes: “The entire orthopaedic industry should benefit from increased demand as seniors become a larger segment of the population. Hip and knee replacements account for more than
95 per cent of all orthopaedic implants and Biomet holds about 12 per cent of this market which accounts for 63 per cent of the company’s sales.”

Manufacturers of replacement joints are benefiting from materials advances and improved surgical procedures, which mean that knee and hip joint replacement units last longer. As a result younger patients with arthritis or other diseases affecting joints and bones can be considered for joint replacement surgery at a younger age. The knock on effect is a sales boost for joint replacement manufacturers, and Biomet is well placed to take advantage of this trend.

Biomet recently received approval for its harder-wearing polyethylene hip liner, which according to Forbes has produced gross margins of over 70 per cent.

In recent weeks it hasn’t been all plain sailing for Biomet, which is facing two class-action suits for alleged US anti-trust violations. Biomet’s senior vice president of corporate development and communications told Dow Jones newswires that the lawsuits were filed by companies and individuals. But the details of where they were filed, and the damages sought remain undisclosed.

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