Zimmer Biomet Strong on Positive Data From PROGRESS II Study

Zimmer Biomet Holdings, Inc. ZBH recently announced positive results from PROGRESS II for treatment of knee osteoarthritis (OA). Data from the study (based on 46 patients with symptomatic knee OA pain from the four trial sites across Europe) demonstrated the safety and efficacy of the nSTRIDE Autologous Protein Solution (APS) Kit for the therapy.

Per the company, investigators prepared APS by using Zimmer Biomet's nSTRIDE APS Kit, which concentrates anti-inflammatory cytokines and growth factors from a sample of the enrolled patient's blood for delivery via a single intra-articular injection into the knee joint. The outcome showed a significant improvement in the percentage change from baseline in pain scores along with comparable safety to saline.

Notably, nSTRIDE APS Kit is marketed in Europe, Japan and Asia-Pacific as well. However, the kit is commercially unavailable in the United States. It is under clinical evaluation in the country. Furthermore, positive findings confirm the basis for two more trials namely, PROGRESS IV and PROGRESS V.

 

Developments in Knee Business

Last quarter, revenues derived from Knees were down 1.7% year over year. However, the company is putting in consistent efforts to improve its knee business. In this regard, we note that Zimmer Biomet announced the global launch of the Persona Partial Knee System on Aug 31, an advanced addition to the company’s portfolio of personalized and anatomically designed knee implant systems.

Another major development in Zimmer Biomet’s Knees business is the unveiling of an X-ray-based Patient Specific Instrument known as X-PSI Knee System in June. This is the world's first CE Marked surgical planning system, enabling patient-specific implant positioning through the sole use of X-ray technology.

Market Prospects

Per a report by GlobalData, the OA market is expected to reach a value of $3.5 billion by 2026 across the seven major markets at a CAGR of 8.1%. The United States will continue to dominate the OA market even at the end of that target year as 75% of the total sales will be accredited to the country’s accounts. Taking the growing OA market into consideration, we believe this latest development to boost the company's sales in the segment.

Solid Stock Performance

In the last 30 days, Zimmer Biomet has been trading above the broader industry. The company has gained 5.9% versus the broader industry’s 0.3% decline. Also, the company has outperformed the S&P 500’s 3.1% gain over the same time frame.

Zacks Rank & Key Picks

Zimmer Biomet carries a Zacks Rank #4 (Sell).

A few better-ranked medical stocks are Bruker Corporation BRKR, Align Technology, Inc. ALGN and Chemed Corporation CHE. Notably, Bruker and Align Technology sport a Zacks Rank #1 (Strong Buy) whereas Chemed carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bruker has a long-term expected earnings growth rate of 9.9%. The stock has rallied roughly 57.1% over a year.

Align Technology has a long-term expected earnings growth rate of 28.9%. The stock has skyrocketed 126.1% in a year.

Chemed has a long-term expected earnings growth rate of 10%. The stock has soared 50.9% in a year.

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