Corin Share Discussion Threads

[wan] 12/3/2012 16:58

The MoM issues, which are predominantly centred on the Johnson & Johnson Depuy product, were around long before the recent media coverage, but I acknowledge that the recent coverage has served to lower sentiment. However, I believe that Corin's long term growth trend is intact with demographics providing compelling support.

[wan] 12/3/2012 12:46

Smarkmmm...There is always a risk, but Corin's excellent long term clinical data (lack of failure/issues) along with the fact that their MoM (albeit representing a small fraction of revenues) was still deemed suitable for some patients suggest that litigation is a low risk. However, it is unlikely that sales for MoM will increase. Given that the MoM issues is old news, even though only recently reported in the press, it was not surprising (and a relieve to shed a restrictive agreement) that Stryker no longer saw MoM as a long term product.

[smarkmmm] 12/3/2012 12:29

wan

Are surgeons going to be wary from now on about choosing new materials, after the MoM problems?

My worry is that it's just a question of time before Corin get dragged into MoM litigation. They may only do 5% MoM now but they were a major player & there are many many Corin joints in the "field" - some of which will have developed problems. Will these patients be tempted to join the bandwagon & sue?



"Patients suing Wright Medical say they were not warned about the real risk of early failure of the medical devices."

I wonder whether MoM litigation was why Stryker severed relations with Corin?

Also the LARS debate.

There's more risk with Corin IMO than of past.

[wan] 12/3/2012 07:49

Smarkmmm...Thanks for the link. If anyone reads back through the thread, you will note that Corin has been providing excellent clincal data for their MoM products, which aligns with the comments in the article you highlight. Corin's MoM products are still selling (as the article also appears to suggest), but now only represents a small fraction of Corin's revenues (5%).

[wan] 10/3/2012 15:04

I am in catch up mode as I have been on holiday for over two weeks.

Corins results were broadly in line, but with some disappointment in not recommending the final dividend, albeit to invest further in the growth opportunities, and an extra degree of uncertainty surrounding LARS in Australia going forwards. However, I still buy into the overall growth strategy, particularly in the US, which also includes the MAKO distribution agreement, which looks set to include additional Corin implant systems that are coming through development and evaluation surgeries. On this point it is worth highlighting that MAKO's RIO System is a platform technology i.e. it is not limited to total hips and 'partial' knees. Interestingly Corin confirmed that the first new Unity 'total' knee evaluation surgeries have recently been successfully completed, which is a very interesting development considering that to date MAKO have only performed 'partial' knee implant procedures and are forecasting around 11,000 partial knee procedures for 2012. It is perhaps worthy of note then that partial knees represent less than 10% of the knee procedures carried out today (see article below), which bodes well for roll out in 2013 of Corin's new Unity total knee implant (MAKO integration or not).

I have also listened to MAKO's Fourth Quarter Results webcast which was broadcast on 6th March and is available on their website, which again makes for interesting commentary given the distribution agreement mentioned above and the fact that the hip application completed its first full quarter of availability –



Although MAKO's procedures will be virtually double that of 2011, MAKO appear to be being quite conservative regarding procedures for 2012, indeed they were challenged on this aspect during Q&A (including hip procedures per system) and I wonder if the likes of Piper Jaffray thinks likewise -

MAKO Surgical Corp. (NASDAQ:MAKO): Piper Jaffray believes Mako Surgical remains on track after posting in-line Q4 results and reiterating 2012 guidance for robot placements and implants of 56-62 and 11,000-13,000, respectively. The firm said it would be an aggressive buyer of the stock at current levels and reiterates an Overweight rating on the name with a $50 price target.


The following article is worth reading in full, if not to only realise that Corin's strategy of direct distribution in the US is the right one "Within this strategy, emphasis is being placed on the opportunity to develop the Group's US business" i.e. no exclusive distribution agreements! And that MAKO RIO System has further potential applications -

MAKO Surgical: Growth Investors Should Buy On Pullback
March 7, 2012

A Market Worth Having
Right now the MAKO story is largely about partial knee replacement and hips. It will not be surprising, though, if MAKO launches additional total knee and total hip options in the relatively near future. Years down the road, applications in spine, shoulder, and other joints should add even more potential to MAKO's addressable market.


As I originally stated (in the title post), an investment in Corin is about medium (2012) to long term (2013 and beyond) growth, so I remain confident that Corin are on track, albeit with some uncertainty for 2012 regarding LARS in Australia. I note that commentary in the IC incorrectly state that LARS is Corin's biggest market by sales, but I believe that this should have read "The initial success of LARS saw 'Australia' become Corin's biggest market by sales", which in turn needs to be read in conjunction with Corin's commentary in their F/Y Results under the subtitle Geographic Results –

"The very strong growth in Australia of recent years suffered from the decline in LARS sales, with sales of GBP12.5m (2010: GBP12.7m). Despite the overall decline, there was very encouraging growth in the sales of Trinity, Metafix and MiniHip as this range was rolled out in the market."

So the £12.5m is not all about LARS and indeed LARS sales are less affected in other markets such as the UK, indeed the detailed commentary elsewhere in the results would suggest that there was significant sales growth in Australia for Corin's other products given that the overall decline in Australia was only 200K. However, I duly appreciate and understand (hopefully in more detail) the need for the cautionary note, but I don't believe that LARS alone will derail Corin's multi-year growth prospects and LARS (in Australia and use in anterior cruciate ligament ("ACL") repair) may prove to be more of a bump in the road.

[smarkmmm] 29/2/2012 11:49

Corin are holding up well this morning after the sobering BBC Newsnight piece last night and the news that 50000 UK metal hip implant patients will need life-long checks. If after the DePuy ASR fiasco medical device regulation is tightened requiring long term studies then this will surely hit small firms like Corin that don't have the resources of the giants. Corin are introducing a new knee joint and tightened regulations would delay this. Together with the unfavourable publicity with LARS, Corin certainly seem to have some headwinds.

[wan] 22/2/2012 08:29

Corin's stated strategy is to generate growth by broadening its hip and knee portfolio, developing innovative implant solutions and building its sales and marketing teams in a focused set of international markets. The broadening of the hip and knee portfolio is addressing high volume and high growth segments where Corin has been underrepresented. It is being implemented via in-house product development and licensing.

It's also worth re-reading and scrutinising the distribution agreement with Mako, which is a 5 year global distribution agreement that also allows for the future integration of other Corin implant systems –


The recent Mako webcast (16th Feb) provided for some more interesting commentary, namely the confirmation of the introduction this year of two more 'incremental' hip implants, one of which is a vitamin E cup liner, which would obviously align with Corin's recent 510k approval that I highlighted, but of course is no guarantee until we hear it directly from Corin.

The other bit that also caught my attention, and where Mako describe themselves as being most excited about, was regarding several new hip products (including the vitamin E cup liner) that have been developed in conjunction with a very experienced team in the area of medical implant and materials development. These new products (again one of which is a vitamin E liner) incorporate the best features of the most highly utilised implant systems in the market place today. Mako go on to state that by the end of the year they will have three implant offerings capable of addressing 70% of surgical preference for hip implant systems. 'If' these new products are predominantly from Corin, it would bode well indeed for growth to accelerate beyond 2012, a year which looks set to be an inflection point in terms of a return to a profitable and sustainable multi-year growth period. But I also like the fact that Corin is not reliant on Mako alone to achieve this return to growth.

I am not suggesting that the following is related to the Mako agreement (yet), but Corins recent patent publications also make for very interesting reading, in particular a new hip prosthesis system published on 24th November 2011. I will cut and past the main thrust, but for those with a penchant for detail please follow the link provided -

Hip Prosthesis System

The present invention relates to a hip prosthesis system and method particularly for use with a hip-resurfacing procedure and a total-hip replacement procedure.

A type of hip joint replacement is determined prior to surgery, and this may typically be either total hip arthroplasty or hip-resurfacing arthroplasty. Surgery is then prepared based on this decision, and the necessary prosthesis is organised.

However, once surgery begins, and particularly during trialling, it can become clear to the surgeon that the bone quality at the patient's hip may have deteriorated far more than anticipated during pre-surgery diagnosis, or vice versa that the bone quality is actually far better than initially thought. This then causes difficulties for the surgeon since different prosthetic component parts, and even prosthetic parts for a different type of arthroplasty are not readily available.

Furthermore, with the present state of the art, should it be decided intra-operatively that a different kind of hip arthroplasty is required, then the current procedure must be terminated and a full set of different hip prosthetic components for the different kind of arthroplasty must be obtained and the trialling and fitment procedures restarted, leading to a significant wastage of time.

Additionally, ordering and stocking complete sets of prosthetic components for two completely different kinds of hip arthroplasty is costly in terms of materials and space. The present invention seeks to provide a solution to these problems.

The hip prosthesis system of the present invention allows the surgeon many benefits. Firstly, the system offers the surgeon the intra-operative choice of being able to decide that if the bone quality of the patient at the time of surgery is insufficient, he can then choose to revert to a total hip arthroplasty utilising the second adaptor with the common femoral cap. Further, dependent on the amount of bone available in the acetabular socket, the surgeon may choose to opt intra-operatively for a total hip arthroplasty to be able to then make the acetabular socket smaller and preserve bone. Additionally, the hip-resurfacing femoral component allows the surgeon to better visualise the acetabular socket during preparation, subsequently fitting the common femoral cap to the selected adaptor. Additional benefits of the system of the present invention are that the surgeon may intra-operatively decide that, after making bone cuts, the leg length may be reduced by proceeding with the resurfacing option. If it is discovered during the surgical procedure that a patient has an, or an excessive, leg length deficiency, since it is known that leg length deficiency is a risk factor for hip resurfacing and as such may create an imbalance leading to premature failure of the prosthesis, the surgeon can opt to revert to total hip arthroplasty utilising the common femoral cap. The hip prosthesis system of the present invention also has advantages in that it can allow a hospital to carry less stock and parts, and in light of private hospitals and National Health Service trusts aiming to provide more services with increasingly restricted budgets, allows hospital storage space and costs to be reduced. Furthermore, materials and manufacturing costs are reduced.



All food for thought at present, but in any event 2012 looks set to be an interesting year for Corin.

[wan] 21/2/2012 07:40

A recent news item from Corins website -

We look forward to developing the use of the direct anterior approach with world-renowned educators and leaders such as Dr Kreuzer as part of Corin's educational platform and responsible innovation for its products. By helping surgeons develop an understanding of the direct anterior approach this could in turn help patients mobilise earlier and lead to higher levels of patient satisfaction and better long term results.



Although we have already seen the selected operating results and 2012 annual guidance from Mako back in January, it will still be interesting to listen in on their conference call 6th March -

[wan] 18/2/2012 09:25

Recall that the supply agreement with Mako also allows for the potential future integration of other Corin implant systems, and that as part of Corin's growth strategy they are developing and broadening the hip (and knee) portfolio. And that there was interesting commentary in one of Mako's webcasts regarding adding additional implant systems (which starts at 17mins 33secs) but specifically (18mins 10 secs) slide 33, which states that in 2012 at least two more hip implant systems will be added -

January 11th, 2012 30th Annual J.P. Morgan Healthcare Conference -


Previously I noted (and reported) that researchers had recently 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


So it should be of interest that 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. At this point it is well worth reading Corin's website information, including the interview article and indeed downloading the ECiMa flyer –


I further note that Corin has very recently (6th Feb 2012) received 510k approval for their Trinity Acetabular System ECiMa Liners –


Obviously this bodes well indeed for further growth in US sales given Corin's own direct sales operation and the fact that the strongest geographical sales performance was in the USA, not to mention the further rebalancing of the portfolio away from MoM.

This US approval could obviously provide the catalyst that would allow the integration of Corin's new ECiMa implant system to the Mako distribution agreement (and would fit with that stated in Corin's original distribution announcement 22nd March 2011). In any regard, as ECiMa is only available with Corin's Trinity advanced bearing acetabular system, for which the initial Mako supply agreement is for, it would appear that ECiMa could provide for yet another significant driver of growth!

[wan] 13/2/2012 07:34

Most will know that I am mainly interested in companies with long term growth prospects, the following sums up why I am invested here –

Boomer Demand For Knees And Hips Should Boost Medical Devices ETF
February 10, 2012
In the 2/10/2012 edition of USA Today, journalist Janice Lloyd presented a number of sobering stats for baby boomers. For example, the demand for knee replacements in the 45-64 age bracket has tripled over the past 10 years. What's more, nearly one-fifth of the 4.5 million Americans who have already experienced total knee replacements may eventually require revisions due to loosening, fractures and/or general wear and tear.

Why do these numbers matter? For one thing, prosthetic joints from knees to hips should be extremely profitable for manufacturers for decades to come.


Twin demand effects from favourable demographics, and demand from revisions due to products reaching the end of their useful life. Not a razor blade model, but nonetheless solid and sustainable!

[wan] 12/2/2012 08:08

A few thoughts -

Corin has (and had) a range of new products in evaluation surgeries, including the new total knee system and various enhancements to the hip portfolio. Commercial roll out of these products, range from the second half of 2011, through to the second half of 2012, so we can expect new product launches to be another significant growth driver in 2012 and beyond.

The IMS has already flagged that in the four months ended 31 October 2011 underlying constant currency sales growth (excluding the Group's discontinued Chinese operations) has increased to 7%, compared to the 1% level achieved in the first half of the financial year. Which should translate to Group sales increasing by a larger percentage, probably nearer to 10%, and they still had another two months of the year left (during which Mako beat expectations). In other words/numbers –

2010 - Group sales increased by 10% to GBP44.8m (2009: GBP40.6m), increase of 6% on a constant currency basis*.

Plus 7% on a constant currency basis, plus 2 months (November and December) equates to Corin perhaps beating some expectations. We will know more conclusively of course on 8th March.

Corin's growth strategy is only just starting to have any real effect, but with new product and product enhancement roll outs to come through too, we have much further to go for the patient investors.

At this point it's worth again mentioning Mako's 2012 guidance of 11,000 to 13,000 MAKOplasty procedures anticipated to be performed in 2012, which is virtually double the procedures performed in 2011(I think this may even prove to be conservative). Recall that Corin's supply agreement with Mako allows for the potential future integration of other Corin implant systems, if other Corin products are indeed integrated, then Corin's growth could accelerate significantly through 2012 and beyond. Importantly though, Corin is not dependant on Mako alone to achieve growth, but it is easy to see that Mako is set to be at least one catalyst.

[wan] 10/2/2012 08:24

An Unexpected Change In Leadership At Stryker
February 9, 2012

If there is any short-term fallout, it may be that it serves as a distraction during the current American Academy of Orthopedic Surgeons meeting in San Francisco. This meeting often serves as an opportunity for companies to show off and preen, but there may be a fair bit more interest in gossip and speculation around the Stryker booth.


Still, this wasn't going to be a huge meeting for Stryker this year anyway. Stryker was probably looking to stoke some momentum in its hip franchise, but there wasn't a lot in terms of new products. By comparison, Zimmer (ZMH) was displaying some new smart tools and MAKO Surgical (MAKO) was talking up its opportunities in hip arthroplasty, but Stryker didn't have a lot going
Full story -


Mako's webcast is available here -

[wan] 07/2/2012 07:56

Is the playing field becoming more level, especially for the smaller yet arguably more nimbler players? I read the following as indicating such -

February 6, 2012 8:00 pm

Smith & Nephew in $22m bribes fine

The UK-based medical devices company agreed to a settlement with the Department of Justice and the appointment of an official to supervise its compliance procedures over the coming 18 months.

with probes continuing against rivals including Biomet, Stryker, Zimmer and Medtronic.

Full story, FT.Com -

[wan] 06/2/2012 15:18

An interesting webcast coming up -

February 6, 2012-MAKO
Surgical Corp. (Nasdaq: MAKO) announced today that the Company will host an event for research analysts and investors where surgeons will discuss their experience with MAKOplasty. This event will be held concurrent with the American Academy of Orthopaedic Surgeons 2012 Annual Meeting in San Francisco on Wednesday, February 8 at 6:00 pm Pacific Time.

Interested parties may access a live webcast by visiting MAKO's website at
www.makosurgical.com under the Investor Relations section. A replay of the webcast will be available immediately after the conclusion of the presentation. Due to space constraints, in person attendance is limited and by invitation only.


Recall that Corin are exhibiting and hosting two meetings at the AAOS Annual Meeting too -

[trixter] 04/2/2012 15:18

wan - agreed.

[wan] 04/2/2012 07:05

Recent commentary from the large players has been a mix of comforting to mildly positive. I note that most have stated a similar line with regard to the US market that jobs and job security would be a key element to a return to growth for elective surgeries such as hip and knee replacements, and no doubt most will have noted that recent news regarding US jobs growth has certainly being very encouraging. However, I would add that in any regard Mako already appeared to have been bucking the trend, but with an improving jobs picture now in the mix as well, this appears to bode well indeed.

[wan] 03/2/2012 07:38

If anyone is interested in the detail from S&N's earnings call the transcript is available further below, the Q & A page is worth reading too -

Regarding acquisitions they are looking for bolt-on acquisitions. You will also note the Metal-on Metal hips (MoM) gets specific mention, even though their product, just like Corin's, is receiving good clinical data and no problems. The CEO stated the following "Regarding metal-on-metal, we are actually pretty disappointed that some commentators do not differentiate BHR (Birmingham Hip resurfacing system) than the global metal-on-metal. And I think it's for patient, I mean this could be a potential distress, which is not necessary. When I see the article I read on Sunday, when it said poisoning patient, it's a big anxiety. Actually, we know that BHR is a good product. We have been following this product for 10 years in a row. We do not see any problem. Actually, all the data we have received recently, independent data, one is the English and Welsh joint register is showing that BHR as the best survivor rate after 8 years, which is roughly 98.5%."

Recall that in my post 43 that Corin's Metal-on Metal clinical overview, Corin reported more than 95% at 8 years i.e. very similar. The difference is that Corin appear to be well in front of the curve with regard to moving away from MoM products.

Smith & Nephew plc Management Discusses Q4 2011 Results - Earnings Call Transcript
February 2, 2012

[trixter] 02/2/2012 14:50

wan - thanks for all the recent info. I think CRG is only going one way in the medium to long term. AIMHO, DYOR, etc.

[wan] 02/2/2012 09:24

Smith & Nephew Quarterly Profit Beats Estimates on Orthopedics
February 02, 2012

[wan] 02/2/2012 07:56

Yes Smith & Nephew repoted this morning. The bit we are interested in -

I note that Orthopaedics revenue was flat but profitability improved -

"Orthopaedics delivered significant improvement in profitability quarter-on-quarter"

Turning to their startegic priorities -

Six months ago we set out the five strategic priorities which will drive Smith & Nephew's future success:

-- established markets
-- emerging markets
-- innovate for value
-- simplify and improve our operating model
-- supplement the organic growth through acquisitions

I further note "Our global hips franchise performed in-line with recent quarters, as headwinds in the metal-on-metal sector remain a challenge."

Metal-on metal(MoM) headwinds is something that is abating for Corin due to the rebalancing of the portfolio away from MoM, but it still sounds as if S&N need to do the same. Have Corin already got what the likes of S&N need?

[essentialinvestor] 01/2/2012 20:25

SN. reporting tomorrow for anyone interested in the sector.

[contrarian2investor] 01/2/2012 20:24

wan, that over-reaction is certainly impacting on CRG. It has led me to wait and see where it will find support. Negative sentiment also needs to be allayed. I will then consider making an investment.