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Can Zimmer Biomet Recover after Disappointing 3Q17?

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Part 7
Can Zimmer Biomet Recover after Disappointing 3Q17? PART 7 OF 10

Attractive Product Pipeline Could Revive Zimmer Biomet’s Growth

Overview

With the acquisition of Biomet by Zimmer Holdings in 2015, the company has positioned itself as a strong medical device player in the United States with a comprehensive musculoskeletal portfolio. The company has been integrating the two legacy brands and is focused on providing a portfolio of products that provide value to its customers. Since the acquisition, the company has been further expanding its product portfolio through inorganic as well as organic growth. Since the merger, the company has invested more than $1.5 billion on mergers and acquisitions and has added more than 60 products to its product portfolio. Let’s check out some of the key products in the pipeline that are expected to drive the company’s growth going forward.

Attractive Product Pipeline Could Revive Zimmer Biomet’s Growth

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Product pipeline

Zimmer Biomet Holdings expects to launch its Persona cementless knee implant in the second half of 2018. Stryker (SYK) recently received FDA (U.S. Food & Drug Administration) clearance for its cementless Mako total knee system with triathlon tritanium. The company expects to gain significant market share in the knee implant market with this technology. ZBH’s other competitors in the reconstructive implants market include Johnson & Johnson (JNJ) and Smith & Nephew (SNN). ZBH’s Persona revision knee system is expected to be launched in the second half of fiscal 2018. Thus, the company is focused on expanding its Persona portfolio and providing a comprehensive knee offering to customers.

ROSA robots for spine surgery are expected to be launched in the second half of 2018. That’s expected to drive significant growth in the company’s performance. The company expects the product to be highly competitive with other spine robotic systems in the market. ZBH is also working on a knee application of ROSA robots.

Investors who want to add Zimmer Biomet Holdings to their portfolios but with a diversified exposure can consider investing in the Vanguard Value ETF (VTV), which holds ~0.19% of its total holdings in ZBH.

In the next part, we’ll look at the updated company guidance for 4Q17 and 2017.

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