Economic uncertainty appears to have produced a wide variety of medtech earnings stories during the most recent round of quarterly results.
Some medical device companies received massive boosts from their quarterly performance, while others saw their stocks sink amid missed projections and other various issues. The phrase “macroeconomic headwinds” was a common phrase. Medtech faces a strong U.S. dollar (a hurdle for American companies selling overseas), supply chain disruption and inflation.
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MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — has mostly been on the rise over this period, getting as high as $90.10 per share (a 6.5% increase from the price of $84.60 at the start of the period). It is now at $85.27 for the last month, representing a 0.7% rise overall.
Here are 10 medtech earnings stories that caught the eye over the past several weeks, plus a look at how the companies have performed since:
Philips (NYSE:PHG) stock took a hit after its CEO confirmed that the U.S. Department of Justice, acting on behalf of FDA, provided a proposed consent decree on July 18 following an inspection of the Dutch medtech giant’s U.S. Philips Respironics facilities in 2021.
Shares of PHG were down more than 8% to $20.37 apiece on the news of the company’s earnings. The company’s stock is now trading at $18.07 for a decline of 11.3% since the quarterly results were released.
The company’s connected care business also saw a 13% sales decrease, mainly as a result of its massive Respironics recall and the impact of supply chain headwinds.
Since the company’s earnings were released last month, the company announced plans for Roy Jakobs to succeed Frans van Houten as president and CEO in October, while the FDA confirmed that it has received reports of 44 more deaths associated with the Respironics recall.
Zimmer Biomet (NYSE and SIX: ZBH) reported second-quarter results that easily topped projections on Wall Street.
The orthopedic device company beat EPS forecasts by 17¢ and proceeded to increase its full-year forecast for 2022, with expectations for between $6.70 and $6.90, up from $6.65 to $6.85.
Investors reacted by sending ZBH shares up more than 5% to $115.93 apiece. The company’s stock reached as high as $117.53 per share (Aug. 15) in the period since but eventually regressed to $112.02 per share.
The company’s recently spun-out ZimVie (Nasdaq:ZIMV) business, however, fared differently in its first quarter independent from Zimmer Biomet.
ZimVie shares were down more than 11% to $17.56 apiece on the back of the news that its losses roughly doubled year-over-year to $8.7 million, or 33¢ per share, while sales were down 11.5% year-over-year to $233.4 million. Shares of ZimVie haven’t quite recovered and are now sitting at a price of $17.11.
Abiomed (Nasdaq: ABMD) was forced to scale back revenue projections due to tough foreign exchange rates for U.S. companies.
The Danvers, Mass.–based maker of circulatory and oxygenation support devices saw its shares dip more than 2% to $294.82 after it released its earnings report as a result of the tempered expectations. Matters have not improved for Abiomed, which now has shares priced at $263.73 apiece.
Within three weeks of the company’s earnings release, its shares are down 10.5% in total.
Despite the reduced guidance and sinking shares, Abiomed’s performance was still relatively strong, with adjusted EPS beating The Street by 19¢, while sales came in just about even with analysts’ projections.
Edwards Lifesciences (NYSE:EW) shares suffered after the company reduced its 2022 guidance amid foreign exchange headwinds and hospital staffing challenges.
The company posted a bottom-line slide of 17% for the quarter, while its sales and adjusted EPS both came in just shy of expectations on Wall Street.
CEO Michael A. Mussallem said “we continue to have confidence in our longer-term outlook,” but Wall Street didn’t share his sentiment as shares went down more than 4% to $101.95 on that day.
Edwards’ stock has not improved since then (July 28), with EW shares now trading at $96.83 apiece, representing a 5% total decline over the last few weeks.
Axonics (Nasdaq:AXNX) posted record sales during its 2022 second quarter and it only expects things to get better on that front.
The Irvine, California–based sacral neuromodulation technology developer posted revenues of $69 million for the three-month period, with sacral neuromodulation sales growing 39% year-over-year thanks in large part to the April launch of the F15 recharge-free sacral neuromodulation system.
Now it projects full-year revenues of $253 million, rising from the previous guidance of $238 million. That amount of sales would represent a 40% increase from fiscal 2021.
With this news, shares of AXNX were up more than 5% to $70.52 apiece. They have risen as high as $73.72 per share since and now sit at $72.24.
Questions arose following a June announcement that Outset Medical (Nasdaq) was holding shipments of its Tablo hemodialysis system for home use as a result of a pending FDA review and clearance of a 510(k) submitted for changes made since the Tablo system’s original March 2020 clearance.
However, in announcing its second-quarter results, Outset Medical alleviated fears for people who needed dialysis technology for home use by confirming that the FDA has cleared the system changes, allowing shipments of Tablo for home use to resume, even amid a shareholder lawsuit claiming that the company and its top executives made false and misleading positive statements leading up to the shipment hold announcement.
Investors responded by sending OM shares up 21.5% at $18.77 apiece. Share prices rose as high as $22.01 and are now at $19.27 three weeks after the announcement.
The Tablo shipment news helped to offset what could have been more trouble for Outset, which performed below expectations for the three-month period, missing sales projections by $2.4 million and EPS expectations by 7¢.
Inspire Medical Systems (NYSE:INSP), a maker of a minimally-invasive, implantable, pacemaker-like device that uses neurostimulation to treat obstructive sleep apnea, topped Wall Street revenue projections by more than $13 million, thanks to a better than 70% year-over-year sales improvement.
The company revealed more good news by pointing to ongoing technology and digital development activities and positive reimbursement tailwinds resulting in projected sales of $354 million to $362 million in revenue for the year year. That represents a sizeable rise from the company’s previous $336 million to $344 million revenue guidance.
Inspire Medical Systems recently picked up two FDA approvals with one for expanded, full-body MRI compatibility. The second had to do with new stimulation and sensing silicone leads that company officials think will enable improved manufacturability, easier system implantation, increased long-term performance, and enhanced reliability.
Shares of INSP were up to $218.57 apiece after its earnings were announced. They reached heights of $227.78 but have since hit a slight skid and are now trading at $210.13.
Butterfly Network (NYSE:BFLY) had an interesting response to its second-quarter results, with investors bringing its stock price up despite negative news around workforce reductions.
Shares of BFLY were up more than 16% at $5.66 apiece by the close of trading that day (Aug. 3), but have since regressed to $5.11 apiece. In between, share prices reached as high as $8.65.
The positive response from The Street likely surrounded the company’s strong performance, with sales of $19.2 million just beating analysts’ projections, while EPS was 9¢ ahead of the consensus forecast.
CEO Dr. Todd Fruchterman said that the company adopted a plan to extend its cash runway that includes “improved efficiencies and targeted reductions in our workforce.”
The Form 10-Q that Butterfly Network later filed with the SEC said it plans to reduce its workforce by 10%, incurring $2 million in cash charges in the process. The company had 463 employees at the end of 2021, according to its most recent annual report.
San Clemente, California-based ICU Medical posted losses of $7.5 million on sales of $561 million during the second quarter. That sales total was $4 million shy of Street projections, while the company’s adjusted EPS of $1.37 came in a whopping 49¢ behind projections.
The company went on to make large cuts on in its 2022 full-year guidance, reducing adjusted EBITDA projections from between $450 million and $500 million to between $350 million and $370 million.
Additionally, the company slashed its adjusted EPS outlook from a range of $9 to $10.50 to a range of $6.20 to $6.80.
Shares of ICUI were down 6.4% at $176 per share on the news of its quarterly performance and have continued to decline. Over the past two weeks, the share price is down 8.3% at $161.32.
Shares of DXCM were down 7.2% at $80.69 upon the news of second-quarter results that came up shy of the consensus forecast, plus a major delay in the regulatory timeline for a next-generation product, the Dexcom G7 continuous glucose monitor (CGM).
Revenues were more than $2 million behind expectations, while adjusted EPS came in 2¢ shy of the Street’s forecast.
The biggest hit for the diabetes technology company came through the confirmation that changes had to be made to the Dexcom G7 as it navigates the FDA’s regulatory pathway, meaning the clearance that was expected at some point this year will be put on hold for a while.
Dexcom Chair, President and CEO Kevin Sayer explained that the company has — based on feedback from the FDA — been tweaking the software of its next-generation G7, “slightly delaying” the expected timelines for FDA 510(k) clearance and the subsequent U.S. launch.
“We expect FDA clearance and a limited launch later this year and a large commercial launch in the U.S. in the first quarter of 2023,” Sayer said.
The company has rebounded since the initial dip on the back of the news, though, with shares now trading at $84.68 apiece.