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Recent Product Launches Expand Stryker’s Orthopedics Business

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Overview

In 1Q17, Stryker (SYK) reported YoY (year-over-year) growth of ~18.5%. One of the contributing factors to its growth is the company’s innovative product portfolio. Stryker has been expanding its product portfolio through strategic acquisitions and internal research and development. Stryker invests ~6.5% of its total revenues in research and development.

Orthopedics is the second-largest contributor to the company’s sales. The MedSurg segment is the largest contributor. Foot and ankle sales are one of the strong growth businesses in Stryker’s Orthopedics segment. It has been registering double-digit growth in sales for the last few years. Stryker has positioned itself as the leader in the foot and ankle device business in the US. Zimmer Biomet Holdings (ZBH), Smith & Nephew (SNN), and Integra LifeSciences (IART) are some of the other leading players in the foot and ankle business.

Investors seeking exposure to Stryker can invest in the Vanguard Dividend Appreciation ETF (VIG), which holds ~1.5% of its total holdings in Stryker.

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New product launch

On June 28, 2017, Stryker announced the launch of its Hoffmann LRF Hexapod application and hardware. The product features an advanced measurement tool that provides solutions for correcting deformities and limb reconstruction by uploading the patient’s x-rays into the software.

The product is seen as the “first of its kind.” It offers top actuating struts instead of side struts, which enables easier reach and management of hardware.

According to Tom Popeck, vice president and general manager of Stryker’s foot and ankle business, “Our team is excited to showcase the benefits of the Hoffmann LRF platform and its intuitive software at AOFAS. We believe this modern deformity correction platform helps streamline the surgical planning process and demonstrates our dedication to moving technology forward with our surgeons and patients best interest in mind.”

In the next part of this series, we’ll take a look at the lawsuit that the company recently won against Zimmer Biomet Holdings.

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