Smith & Nephew's CEO Olivier Bohuon spoke on a range of topics during the company's quarterly earnings call, discussing 2017 results as well as the potential for growth in 2018. In particular, Mr. Bohuon described the company's research and development strategy as well as progress with the Navio robotic knee system.
In 2017, Smith & Nephew reported a 2 percent increase in revenue, to $4.7 billion, with the knee implants line up 6 percent year-over-year. Here are six key quotes from Mr. Bohuon, according to the transcript from Seeking Alpha:
1. "New pioneering products are at the heart of our business and we are in a period of many important launches. So starting with 2017, we are seeing the fruits of our increase R&D spend and investment in technology acquisitions which we initiated a few years ago…2017 is the first year that our R&D organization has operated as a global function under one leader. I'm very pleased with the increased rigor of our resource allocation and delivery in this new structure."
2. "Innovation in itself is not enough in today's environment of constrained budget and we need to provide more robust proof of value for our innovations. This has been a focus for us in 2017 and we are delivering results. The number of journal publications has tripled compared to 2016 and we expect an even higher number in 2018."
3. "In terms of approach, we are moving to a disease-based model and we will be placing increased emphasis on selling our whole portfolio, both our pioneering and more value-oriented products."
4. "In terms of new business, we have the XR in knee development as well as the combination of the XR in Navio, which will be showcased at AAOS, which I believe will be very strong. By the way, we have started to realize how important the Navio device is in the centers where we have placed or sold the robot. We see an increasing demand for our knees. So there is a correlation between placement and the knee expansion, which I think is very important for the products."
5. "We have decided not to disclose many data points on Navio, but I can give you a few data points. We have been growing almost at a 50 percent compound annual growth rate, so things are exactly aligned with our expectation. We disclosed last year we are expecting 50 percent, and we are almost there. Remember Mako has announced a training of 800 doctors, surgeons. We have been able to train in 2017 more than 500 surgeons with Navio, 500 surgeons. We have double utilization since introduction of TKA."
6. "Navio is today used for the knee and is going to extend its scope potentially to hip or sports medicine."