Djimitry Dzemidovich
Needham estimates that medical expertise gross sales grew lower than anticipated within the first quarter, however Boston Scientific (New York Inventory Alternate:BSX), Conmed(New York Inventory Alternate:CNMD), ResMed (New York Inventory Alternate:RMD) and thermodics (NASDAQ:SRDX) Ought to have the ability to beat Road even once they roll They’re scheduled to launch their respective quarterly reviews later this month.
The funding agency mentioned that in line with its mannequin, the medical expertise market grew by solely 5.3% within the first quarter of 2023, in comparison with 8.3% within the fourth quarter of 2023. However Needham added that searches for elective surgical procedures have slowed to (2%) year-over-year, in line with the corporate's Google Development Tracker. ) 4% within the fourth quarter. This might imply extra medical expertise corporations fail to realize their targets.”
Needham mentioned that regardless of the financial slowdown, trade standard-bearer Boston Rhino, which is scheduled to report on April 24, is in good condition because of new product launches and administration's “conservative” steerage. We anticipate to beat consensus and lift our 2024 forecast.
Consensus income estimates are presently $3.68 billion and $15.59 billion in Q1 and 2024, respectively. Boston Scientific expects 2024 income to be between $15.45 billion and $15.59 billion, Needham mentioned.
Needham mentioned he sees Boston Science's lately authorized FARAPULSE PFA system as “an essential development driver and supply of upside in 2024 and past.” He added that he’s “assured” that the corporate's Watchman merchandise are experiencing “sustained sturdy development” regardless of the launch of Abbott's (ABT) Amulet.
CONMED is equally anticipated to beat consensus in its first quarter report, additionally scheduled for April twenty fourth. Needham additionally expects CONMED to boost its 2024 steerage regardless of the launch of Intuitive Surgical's (ISRG) da Vinci 5 robotic surgical system.
CONMED's consensus estimates presently report first-quarter income of $307 million and 2024 income of $1.35 billion, however the firm expects 2024 income to vary from $1.34 billion to 13. It’s anticipated to be value $70 million.
Needham mentioned that though there are issues that CONMED's AirSeal faces competitors from da Vinci 5, AirSeal “has the potential to take care of a aggressive benefit attributable to its distinctive properties and mental property.” He mentioned he believed that “the typical worth is excessive.”
He additionally sees CONMED's new orthopedic merchandise permitting the corporate to “keep and even achieve market share in sports activities drugs,” whereas Biorez will create new relationships with surgeons for CONMED representatives. It’s purported to act as a “halo or door opener” to spice up gross sales of different merchandise. product.
ResMed, which has benefited from a recall of rival Philips (PHG) CPAP machines, can also be anticipated to beat consensus when it releases its third-quarter report on April 25. The consensus income estimate for the quarter is $1.17 billion. Needham famous that the corporate has not issued steerage.
Needham additionally famous that ResMed's inventory worth has been weighed down by ongoing issues that the recognition of the GLP-1 weight reduction drug will in the end damage the corporate's sleep apnea gadget enterprise. .
“Nonetheless, ResMed has proven that it’s monitoring 1000’s of sufferers who’re taking GLP-1 and utilizing CPAP, and thus far the information has proven that it does certainly improve compliance charges and resupply charges. , which we expect is encouraging,” Needham mentioned.
That mentioned, Needham mentioned that Eli Lilly's (LLY) high-profile scientific trials of its drug tirzepatide, also referred to as Maunjaro and Zepbound, confirmed that the ensuing weight reduction was “a symptom of sleep apnea”. We hope that it is going to be proven that the severity of the illness may be diminished to some extent. We anticipate ResMed's earnings name to focus partially on the potential influence of its analysis, together with the Philips recall.
Thermodics can also be anticipated to beat the Road, which estimates the corporate's second-quarter gross sales at $28.9 million. Needham additionally expects administration to boost its 2024 outlook. The Road presently expects his fiscal 12 months 2024 income to be $120 million. Surmodics has guided him to $121 million from his $117 million.
In the meantime, medtech shares have additionally lagged in efficiency, with large-cap shares up 3.3% because the starting of the 12 months and the S&P 500 (SP500) up 9%. Giant-cap orthopedics shares had been the very best performers, up 3.2% because the starting of the 12 months. This was adopted by cardiovascular shares and medical provides shares, which rose 2.9% and 0.5%, respectively. Then again, diagnostic shares fell 2.2%.
Small- and mid-cap shares have additionally underperformed, rising simply 0.5% year-to-date in comparison with the Russell 2000's 0.8% achieve. Cardiovascular shares and medical provides shares had been the large winners, up 7.6% because the starting of the 12 months, whereas orthopedic shares had been down 5% and diagnostic shares had been down 11.3%.
Enovis (ENOV) and Alphatec (ATEC) stay Needham's high medical expertise gamers, together with SI-BONE (SIBN), Paragon 28 (FNA), Boston Rhino (BSX), and Glaukos (GKOS). , Atricure (ATRC), and Alcon. (ALC), OrthoPediatrics (KIDS), and CONMED (CNMD) spherical out the highest 10. Veracyte (VCYT) is ranked eleventh, adopted by RxSight (RXST), NeoGenomics (NEO), Azenta (AZTA), Dentsply Sirona (XRAY), iRhythm Applied sciences (IRTC), Inari (NARI), LivaNova (LIVN), ResMed (RMD). ) and Artivion (AORT).
