Corin Share Discussion Threads

[trixter] 07/12/2011 08:05

Thanks for the info, wan. CRG picking up a bit of buying interest in the past few days.

[wan] 05/12/2011 07:16

More analysts have upgraded S&N -

Smith & Nephew plc (SNN) Shares Upgraded to a "Overweight" Rating by Morgan Stanley (MS) Analysts.
Posted by LUSA Staff on Dec 1st, 2011

[ducatiman] 02/12/2011 11:19

this thread is a wan man show, charts will definately help. SN. are doing well in this sector, they are a takeover target, they also acquire.

[trixter] 02/12/2011 11:15

Thanks wan...interesting that the big boys are valued at 2 - 3 x annual sales and Corin is < 0.5 x annual sales....room for significant share price growth provided profitability can be improved...AIMHO, DYOR, etc. I hold.

[wan] 02/12/2011 07:34

Mako is still small relatively speaking, but their growth has been quite explosive and importantly this growth looks set to continue (as reported further above). I expect Mako to update that they have installed more than 100 systems by year end, the important bit will be the continued adoption/upgrades of the hip system. Recall that Mako expect that hip adoption will occur on at least one third of their installed base of Mako systems, so 2012 should see a very steep rise in hip procedures.

An intersteing article -

Why I Am Buying MAKO Surgical
December 1, 2011

[wan] 26/11/2011 09:13

I not too that Corin has had a number of patents published recently, with one as recently as last Thursday.

Patents list -

[wan] 25/11/2011 14:12

Interesting article on Smith and Nephew -

Smith and Nephew shares lower after "uninspiring" meeting with analysts
Credit Suisse keeps neutral rating after seeing company's management, saying acquisitions were more likely than buybacks



Recall that Corin's has a supply agreement with Mako Surgical for certain Corin Trinity options, and it would appear that Corin are already seeing healthy demand from Mako, and considering that Mako have only recently launched the hip procedure (in late September) this is very encouraging. What could be the reason for such early success? Well I think it is a strong chance that a relatively new technology offering is only available with Corin's Trinity products -

Next generation vitamin E technology

ECiMa™ technology from Corin

Published Orthopaedic Product News, July 2011

Corin has had the unique opportunity to collaborate closely with Massachusetts General Hospital (MGH) in the development and commercialisation of a next-generation vitamin E polyethylene. ECiMa™ is the most advanced polyethylene of its kind, and is only available with Corin's Trinity advanced bearing acetabular system. David Simpson (Research Manager, Corin) talks to Dr Orhun Muratoglu about the latest advancements in this technology.
Full article -


I further note that recently researchers have revealed that E-CIMA significantly outperform conventional alternatives -

3rd November 2011
TECHNOLOGY Researchers at Cambridge Polymer Group and the Massachusetts General Hospital have developed a novel and highly crosslinked ultra high molecular weight polyethylenes that incorporate Vitamin E. Our research results indicate that these new UHMWPEs exhibit lower wear than conventional UHMWPE by a factor of 5 to 10, better mechanical properties by over 30% compared to first generation highly crosslinked UHMWPE, and are highly resistant to oxidation.

APPLICATIONS The E-CIMA technology can be used as liners for hip, knee, shoulder, and spine arthroplasty implants. ADVANTAGES - The technology have already received CE marking, and are patented and patent pending with worldwide coverage. - These new UHMWPEs exhibit lower wear than conventional UHMWPE by a factor of 5 to 10. - Better mechanical properties by over 30% compared to first generation highly crosslinked UHMWPE, and are highly resistant to oxidation. - Improve wear and fatigue resistance by 130% compared to irradiated and melted Ultra High Molecular Weight Polyethylene (UHMWPE). - The technologies have received CE marking, and are patented and patent pending with worldwide coverage. - Protected against adhesive/abrasive wear, delamination and risk of cracking or fracture under normal and adverse conditions. - The vitamin E reservoir feature enables the continuous redistribution of vitamin E to the surface, thereby maintaining the integrity of the entire implant component. - Prolong the life of the implants and lessen the chances of additional implant replacements

[trixter] 20/11/2011 13:49

wan - thanks for the article and your extensive comments. I like the fact that management is particularly positive about the US at this time. Bodes well IMHO.

[wan] 20/11/2011 08:32

Trixter...On momentum in the US and few other points see below -

I still find this investment very interesting. Below is a recent article on the sector, albeit on focused on the larger players.

Orthopedic Device Makers Take a Step Back
Competitive advantages appear to be weakening.


It is interesting how the mood/investment case swings between paragraphs. However, I believe the overall thrust is a positive one for Corin i.e. more surgeons switching suppliers, reducing moats for the larger players, long R&D/product lead times, and Corin appears quite advanced with regard to new product development. I also think that the sales agreement with Mako is giving Corin another 'underestimated' edge. Although Corin's sales agreement with Mako is 'not exclusive', the Mako system is a closed system i.e. the surgeons must buy the implants from Mako (apart from one implant item, but this could also be bought direct from Corin too). With Corin's products apparently highly regarded and the additional increased awareness/profile from the Mako agreement, their direct marketing in the US will feel the benefit, indeed as the IMS indicated, this looks to have already started to feed through; "The strongest geographical sales performance was in the USA".

You will note that the three large players quoted are trading significantly below the analyst's worst case scenario, so affording a good degree of safety. On this note it is worth plotting a graph for Corin with an overlay of Stryker (SYK) and Smith & Nephew (SNN) (J&J are too diversified). The larger players have bottomed and in fact have started to diverge away (up) from that of Corin (which gives me further reassurance that I am not too wide of the mark on valuation measures). This might be highlighting the difference at being able to cope with a challenging market place, but I don't think that Corin are in trouble, far from it. Corin is too small to be covered by the analysts, and the analysts are starting to see value/opportunity in the sector. I believe that Corin has similar defensive traits and excellent long term prospects, and being smaller and arguably more nimble (with new products coming through) and given the changing environment referred to in the article above, they might in fact have an 'edge'. Plus with Corin's sorry experience with Stryker, they are unlikely to quickly, if ever, agree to another 'exclusive' supply agreement (especially they now have a direct marketing presence in the US), which might be another reason that puts them in play as a potential acquisition target.

[trixter] 18/11/2011 10:08

wan - agreed. The CRG share price hit £6 4 years ago, largely (?) based on the promise of conquering the USA. The agreement with Stryker didn't work out, but it now looks like they are building momentum. Could be very interesting especially if the new knee product comes through as expected. AIMHO, DYOR etc.

[wan] 18/11/2011 08:02

Today's IMS confirms that Corin's strategy now appears to be gaining some real traction. "There has been strong growth in sales of our new hip products in all of the group's geographies where they are approved for sale."

Top line growth has advanced quite nicely despite being tempered by a LARS sales decline, which could yet prove to be temporary.

Product development continues to advance too, so with the rebalancing of the portfolio already starting to deliver, this bodes well going forwards.


As I expected, Mako is indeed worth watching.

[wan] 16/11/2011 08:09

Market Report: Reason to reconsider the Smith & Nephew story
Tuesday 15 November 2011

Bargain-hunters moved into Smith & Nephew yesterday after analysts called on investors to reconsider the growth prospects for Europe's biggest manufacturer of artificial hips and knees.

[wan] 15/11/2011 07:13

Mako's CEO makes a few interesting comments regarding the sector and growth-

Mako Surgical CEO Dr. Maurice Ferre on Health Care Technology
Monday, November 14, 2011

FERRE: You know, I am going to say, you know there is over a million people that have some form of knee or hip implant in the United States. It's estimated by the year 2030 it's supposed to go up to three million. That's a significant number. And I think right now that's the way we treat these diseases. And you know, what we're about is focusing on using technology to improve outcomes. And I think that's the focus. And I think there's a lot of growth in the sector. Health care is a very important part of it. And we need to figure out not only to make it more efficient but more cost effective.

Worth a read the full interview -

[wan] 10/11/2011 08:04

Ducatiman...I did think about that, but unusually for me I saw the thread as being a transitory one, with limited easy to read info regarding the main thrust. If I prove to be anywhere near right I will start another one with more information/content included.

[ducatiman] 10/11/2011 07:44

you could do with some charts in the header wan.

[wan] 10/11/2011 07:41

I have listened to Mako's webcast this morning and it was both interesting and enlightening. For obvious reasons I was particularly interested in how Mako's Total Hip Arthroplasty launch had gone and what was the expectations going forwards. Between 19th September and 30th September (Mako's quarter end) they sold 12 hip systems, which were a combination of new Mako system sales that included the hip option and sales from upgrades to existing systems. They have an order back log of another 9 hip systems, but expect/forecast that by the end of this year (Dec 2011) that hip adoption will occur on one third of their installed base of Mako systems. This is a faster adoption rate than most analysts had thought and Mako sees hips as a key engine to growth in 2012.

Although the following is broad, it confirms that Mako is taking stock of hip products; Mako spent $9.4m in the quarter, which included inventory and instruments for the commercial launch of hips. Given the rapid adoption rate expected, and the run rate of hip procedures, they will obviously need a good continued level of implant inventory to support that roll-out.

An interesting aspect (compared to the environment others have reported) was that Mako saw strong growth in procedures performed in the quarter, again not what analysts were expecting from a traditionally weak quarter. During Q & A Mako stated that they are not seeing too much change at the macro level and that they have a lot of visibility from their relationships with hospital CEO's.

Mako's installed systems performed an average of 6.5 procedures per month, which as indicated was higher than analysts were expecting. Mako's guidance is for a 'conservative' 1-2 hip procedure per month. But none of the analysts appeared to pick up on the already much higher rate of hip procedures (albeit I appreciate it is early days in the roll-out), 88 hip procedures were performed across 12 systems, but this was over less than two weeks, which gives a run rate of circa 15 p/month! I am sure this run rate will average down from this much higher rate, but it perhaps helps to explain why Mako is already 'excited' about the roll-out of the hip opportunity at such an early stage.

Webcast -

[wan] 09/11/2011 09:07

It still strikes me that we must be at or near to a point in share price terms, and indeed considering product development and future prospects, where the downside is limited and the upside has plenty of head room. In other words, Corin will surely come onto a few radars at these very low levels. Anyway, I took the opportunity to add further to my holding.

Point of interest, US company Mako Surgical, who Corin have a supply agreement with (for hip replacement products), report later today, and they have recently announced the introduction of their Total Hip Arthroplasty –

September 19, 2011
MAKO Surgical Corp. Introduces MAKOplasty(R) Total Hip Arthroplasty


This is perhaps more important than first seems, previously Mako only performed knee replacements (with huge success), so this is a departure and one that represents a much larger opportunity than knees, so I will be interested to see if we get any more colour on this aspect from Mako.

[wan] 02/11/2011 08:12

Managed to pick up even more of these on the cheap!

[wan] 28/10/2011 07:48

I note the larger late reported trade from yesterday.

Corin's IMS is in a few weeks time (mid November), so this will give some flavour of what to expect. My view fwiw is that the downside appears limited and the longer term appears to be offering significant upside potential.

[wan] 27/10/2011 16:21

Corin is clearly not in favour at the moment and the shares are currently trading at a 20% discount to NTAV and a 40% discount to NAV.

Anyone taking more than a cursory look will see that Corin's traditional markets are facing headwinds from austerity measures, along with the industry-wide decline in metal-on-metal (MoM) hip products (which now represent a relatively small percentage of Corin's revenues) and the challenge from their mature knee portfolio. However, the management are a good way through implementing a growth strategy, which includes a rebalancing of the portfolio and there are early signs that this strategy is starting to bear fruit, with the non MoM hip portfolio seeing accelerating sales growth which more than offset the declines seen elsewhere, as perhaps can also be seen by still achieving some marginal top line growth despite what is arguably a challenging market and a transitional period for the company (which included the transition to direct marketing in the US).

So, yes I can see the downward trend in some of Corin's traditional markets, but I can also see what looks like a strong underlying growth trend coming through. An area that has caught my attention is the supply agreement with a US company called Mako Surgical, which Corin has already highlighted, is weighted to the second half and will contribute to the stronger sales growth that the company expects; "Sales to distributors (including MAKO) are weighted more towards the second half this year than has recently been the case." With the Mako supply agreement firmly in mind, it's worth considering that the increase in net dept from £4.2m to £6m was driven by some significant stocking orders from MAKO for the third quarter of this year, but this trend is not expected to continue in the second half of the year.

Keeping the Mako agreement in mind, a commercial release in the US by MAKO of the Corin hip implant system was currently planned for the second half of 2011, and I note that Mako announced the introduction of the MAKOplasty(R) Total Hip Arthroplasty on September 19th 2011 –


So we should hopefully start to see the early impact of this agreement in the FY Results. What further caught my attention was that to date Mako's success has been driven by initially targeting 'partial' knee procedures, but the hip opportunity is much larger than knees. I also note that the agreement with Mako allows for the potential future integration of other Corin implant systems. Obviously Corin's new 'total' knee system, for which commercial launch is expected in 2013, springs to mind. However, I note that Corin has received two further FDA approvals for additional hip products 'beyond' those that were required for the initial Mako agreement (see below), none of which has been reported yet, but may feature in the results and some of which could be included within the Mako agreement -

Decision date 29th June 2011 – Corin Minihip Femoral Stem


Decision date 6th February 2012 - Corin TRrinity Acetabular System ECIMA Liners


With further rebalancing of the portfolio and product launches scheduled for 2011 and 2012, growth should become the main theme and not the underlying one, which should have a notable impact on earnings going forwards in the medium term (2012) and a significant impact on the longer term (2013 and beyond). In my opinion it should be a case of when and not if the market re-rates the shares.

Although Corin is experiencing some headwinds, it strikes me that it is a case of some joint replacements are made by choice, in other words 'wanted', but the higher percentage is 'needed'. So given that the demographics are hardly changing in a way that would imply an underlying reduction in demand (quite the reverse), there will always be a solid if not growing market to go after and indeed in the current situation one could argue a case for a significant build in pent up demand, as what can be put off today, in most cases cannot be put off tomorrow!

With Corin Group broadening their portfolio and positioning the business for growth and with the shares trading below NAV, this arguably puts Corin in play as a potential bid target, which may act as either a floor or a catalyst. But for those with a longer term investment horizon, other solid reasons provide the main investment rationale and hopefully far higher returns compared to an opportunistic bid at these low levels.

[mctmct] 23/8/2011 09:17

23 August 2011

Corin Group PLC

Hip product sales up 14%; non metal-on-metal hips up 50%

Corin Group PLC (LSE: CRG, "Corin" or "the Group"), a leading manufacturer and supplier of orthopaedic devices, has today published its half year results for the six months to 30 June 2011.

Highlights

-- Group sales up 1% to GBP22.1m (H1 2010: GBP21.9m), 1% decrease on a constant currency basis*

-- Hip product sales up 14% to GBP11.7m (H1 2010: GBP10.2m)

- Accelerated growth in non metal-on-metal (MoM) hip portfolio, up 50% (H1 2010: 16%)

-- Operating profit, before exceptional items, GBP0.5m (H1 2010: GBP0.9m); Operating profit GBP0.1m (H1 2010: GBP0.9m)

-- Earnings per share, before exceptional items, 0.38p (H1 2010: 0.56p); Loss per share 0.56p (H1 2010 earnings per share 0.56p)

-- Maintained interim dividend of 0.48 pence per share (H1 2010: 0.48 pence per share)

-- Good progress on strategy to complement growth in new hip products

- Building critical mass in the US with direct distribution; investing behind portfolio

-- Post period end, LARS distribution agreement extended until December 2013

Peter Huntley, Corin Chief Executive, said:

"These results reflect the continued rebalancing of our portfolio towards our non MoM products. The encouraging level of growth demonstrates that the strategy is on course. We are now well positioned to be able to support and grow our products and are pleased with the momentum that we are building in the US market.

"We are excited about delivering the next stage of our strategy, the total knee system, which is progressing well, with evaluation surgeries on schedule for Q4 this year."

*Constant currency is calculated by translating 2010 revenue at the average exchange rates used for the six month period ended 30 June 2011

[mctmct] 17/5/2011 07:07

nterim Management Statement

Corin Group PLC (LSE: CRG, "Corin" or "the Group"), a leading manufacturer and supplier of orthopaedic devices, is today publishing an Interim Management Statement for the period from 1 January 2011 to 16 May 2011.

Corin has made a steady start to the 2011 financial year. Sales trends by geography and by product as outlined in the Group's final results in March 2011 remain largely unchanged.

The recently launched hip range, including Trinity, Metafix and Minihip has generated strong growth during the period. Corin's other non metal-on-metal ("MoM") hips have also grown, but at a more modest rate, and MoM hip sales have, as expected, continued to decline.

Corin's Japanese business has traded above expectations and was unaffected by the disaster in March. Australian sales have continued to grow, led by sales of the LARS artificial ligament, but, as expected, growth rates have been more moderate than in the recent past. The UK market has been weak as a result of uncertainty over NHS reforms and the deferral of elective surgeries by Trusts in the last quarter of their financial year.

Invoiced sales to the Group's export markets have been weak in the early part of the year but the order book is very strong and increasingly weighted towards the group's new hip products.

There has been no material change in the financial position of the group since 31 December 2010.

Corin received 510(k) approval from the FDA for highly cross-linked polyethylene liners for its Trinity acetabular system earlier this month enabling sales of this product to US customers, including its new US distribution partner Mako Surgical Corporation, to commence.

Corin expects to publish its interim results for the six months ending 30 June 2011 on 23 August 2011.

Peter Huntley, Corin's Chief Executive, commented

"As we stated in our full year results, we continue to make strong progress in implementing our strategy, positioning Corin for accelerating growth in the broadened hip portfolio and the launch of further new products. The FDA approval of our polyethylene liners for the Trinity cup system is another important step."