Despite COVID-19 spikes during the third quarter that delayed elective surgeries, medical technology company Stryker saw continued demand for its surgical robots and progress with its Wright Medical integration.
Five takeaways from the company's third quarter earnings call, as transcribed by Motley Fool:
1. Increased hospitalizations and elective surgery pauses, driven by spikes of the coronavirus delta variant, primarily impacted Stryker's implant-related business, Preston Wells, vice president of investor relations said. Mr. Wells said since Stryker primarily treats degenerative diseases, patients deferred their procedures to a later date instead of canceling them.
"Our assumption for the fourth quarter is that deferrable procedures will gradually return, starting with a low base in October before returning to more normal levels by the end of the quarter," he said.
2. The integration of Wright Medical is now focused on business process improvements and system efficiencies in the U.S., Mr. Wells said. Teams also developed a long-term product pipeline strategy. Outside of the U.S., the company is continuing to work on integration activities.
"Overall, we remain pleased with the progress and the pace of integration over the past year. Including Wright Medical, the combined U.S. trauma and extremities business has grown 8.1 percent year-to-date."
3. Stryker's third-quarter strengths were in the demand for its Mako robotic technology, Mr. Wells said.
"[It] continues to help surgeons improve patient outcomes by knowing more and cutting less. This trend across capital is expected to continue as hospitals take advantage of flexible financing and prioritize capital products like those within our portfolio that are critical to providing emergency care, driving profitable procedures and ensuring safe working environments for caregivers and patients."
4. CEO Kevin Lobo said he's optimistic about Stryker's ASC growth, but the pace of growth is the main challenge.
"Capacity takes time to build, and every hospital system is in the process of trying to increase their capacity," Mr. Lobo said. "So it is improving, and certainly, that will be a trend that had started prior to the pandemic and is continuing. We feel very good about our position in the ASC."
5. Mr. Wells addressed the orthopedic backlogs in the last 18 months, saying that recovery will be slow and sustained rather than a sudden rebound..
"It's safe to say the backlog still exists," Mr. Wells said. "... We think that over time, as we get back to more normal levels, that backlog will begin to work down. So you'll see some improvement in terms of growth rates over time that will be sustained."