Shares in Royal Philips NV fell by almost 10% on July 25 after the company stated that its second quarter Q2 sales deteriorated amid supply shortages and prolonged lockdowns in China. Group sales for Philips amounted to €4.2 billion (US$4.29 billion) in the second quarter of 2022, representing a 7% year on year decline. Management reduced its 2022 outlook to 1%-3% organic sales growth from a previously estimated 3% to 5% growth and said it expects growth of between 6% and 9% for the second half of 2022.
Medtronic plc and Davita Inc. have agreed to form a new company focused on therapies for renal disease, which will require Medtronic to donate its current kidney care business to the new company. Davita in turn would have to produce $75 million in cash and another $25 million in other assets, but would also have to make as much as $300 million in other payments, depending on the accomplishment of certain milestones. The news comes as Medtronic reports mildly disappointing sales results for the company’s fourth quarter while opening a new front in the two companies’ presence in the renal disease space.
Before filing financial statements with the U.S. SEC, public companies will need to think about how their business has been impacted by Russia’s invasion of Ukraine and, perhaps, update filings they’ve already submitted.
With one-quarter of China’s population affected by rolling shutdowns, manufacturers worldwide are preparing for a summer of supply chain nightmares. Shanghai and its normally bustling port have been closed now for a month and the nation’s COVID-Zero policy is now threatening Beijing. So far, though, the med-tech industry remains minimally affected, but the coming months may tell a different story.
After a challenging 2021, nerve repair company Axogen Inc. is focusing on building clinical data to turn around its luck. The Alachua, Fla.-headquartered company reported disappointing fourth quarter results, with procedure volume negatively impacted due to COVID-19 and hospital staffing. The Nasdaq-listed company is anticipating results from a major phase III pivotal study comparing its flagship nerve graft product Avance to commercially available products in the second quarter of 2022.
While a number of companies cited continued supply chain issues in recent investor calls and earnings reports, few med-tech leaders have expressed concerns about serious disruption to operations or loss of revenue because of the destruction wrought by the invasion of Ukraine or the associated sanctions on Russia. Most companies derive less than 1% of their revenue from the two countries.
The U.S. SEC reported a settlement Feb. 23 with Baxter International Inc. and its former treasurer, Scott Bohaboy, and former assistant treasurer, Jeffrey Schaible, resolving charges involving years of improper intra-company foreign exchange transactions that resulted in the misstatement of Baxter’s net income.
Stryker Corp.’s analyst day provided comfort to those concerned about the company’s ability to return to its strong pre-pandemic revenue and earnings growth after its lower than expected third-quarter earnings results. Management offered positive reports of fourth-quarter trends and a long-term strategy unfolding according to plan.
The COVID-19 testing rebound driven by the Delta variant’s extended surge pushed Abbott Laboratories’ earnings per share for the third quarter nearly 50% higher than consensus estimates. Sales climbed to $10.928 billion, up 15% from expected estimates of $9.564 billion. COVID-19 testing accounted for $1.9 billion in sales, but even without that boost, the company posted year-over-year growth of 11.7% compared to the third quarter of 2019. With COVID testing included, Abbott had organic sales growth of 22.4% compared to the same quarter of 2020 and up 35% compared to the third quarter of 2019. With the third-quarter results, the company announced an increase in the full-year guidance to $5 to $5.10, nearly 40% higher than last year.
Boston Scientific Corp. has said pressure from the Delta variant in the U.S. means it is unlikely to hit the lower end of its current third-quarter sales guidance, which calls for 12% to14% organic growth vs. Q320 and 5% to 7% organic growth vs. Q319. Boston Scientific said it expected to still hit the full year sales guidance of 6% to 7% organic vs. 2019 that it issued on July 27 but would continue to monitor the economic and financial impacts of COVID-19. The company noted that the impact of Delta had been mostly in the NW and SE parts of the U.S. while the impact in EU/APAC region had been more modest.
