Wright Intros DARCO in Japan - Analyst Blog

Orthopedic devices maker Wright Medical (WMGI) has introduced the DARCO foot and ankle plating system in Japan. The launch represents an important milestone for the company's foot and ankle surgical products business. The product is marketed in the U.S. and other major international markets since 2007.

The DARCO plating line includes more than 40 different locked plates designed to address the requirements of foot and ankle surgeons while performing surgery. According to Wright Medical, it is the first indication-specific fixation product for reconstructive foot and ankle procedures in Japan.  

Wright Medical is a leader in the U.S. and German markets for foot and ankle surgical products. The company obtained the DARCO product line through its acquisition of the reconstructive foot surgery business of foot and ankle care products maker Darco International Inc in 2007 for roughly $17 million. The acquisition has enabled Wright Medical to offer the broadest range of foot and ankle products in the industry.

The DARCO plating system is a part of Wright Medical's extremity hardware franchise. Higher sales from foot and ankle products contributed to the healthy double-digit sales growth in this business in third-quarter 2010. Wright Medical possesses a strong extremity product line in Japan including the MICRONAIL fracture repair system.    

Wright Medical is a global orthopedic devices company specializing in the design, manufacture and marketing of reconstructive joint devices and bio-orthopedic materials. It is a leading provider of surgical solutions for the foot and ankle market.

We feel, future revenue growth will be supported by new product (including internally developed and those from acquisitions) launches. Moreover, new deals in extremities, Wright Medical's fastest growing segment, are expected to bolster growth in this business.

Our views are moderated by intense competition from larger players, pricing pressure and slowdown in U.S. orthopedic reconstruction. Wright Medical competes with much larger players such as Zimmer Holdings (ZMH), Stryker (SYK), Johnson & Johnson's (JNJ) De Puy and Smith & Nephew (SNN). We are currently Neutral on the stock, backed by a short-term Zacks #3 Rank (Hold).

 
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