Conformis’ Surprising Strategic Shift to Standard Knee Implants

Will Conformis inadvertently diminish the value of its customized knee implants it’s known for by adding a “standard” knee to its portfolio?

The orthopedic company known for its customized knee implants now plans to sell a standard off-the-shelf knee in parallel to its higher-cost customized knee implants.

Ryan Zimmerman, a medtech analyst at BTIG, says the benefits will be a lower average selling price and faster lead times, but he worries it could diminish the value of the customized knee implants.

“This may open a few doors in [ambulatory surgery centers], but we worry it will also poke holes in the case for knee customization, which has been foundational for [Conformis] since inception,” Zimmerman said in an investment report. “All told, it will take considerable resources and time to build this strategy.”

Conformis has taken a hard hit during the pandemic. In March the company had to furlough 80 employees (about one-third of its workforce) due to a sharp decline in elective procedures. In April, the company received a $4.7 million loan through the Paycheck Protection Program, and was able to bring most of its furloughed staff back to work.

Conformis CEO Mark Augusti said the second quarter was also impacted by the pandemic, but the company has seen a “fairly quick” resumption of scheduled orthopedic procedures, going from April when the company was down 94%, to being down 39% in May, and then down just 9% in June.

“Conformis does not have any revision, oncology, or trauma orthopedic products that are considered essential surgery,” Augusti said during the company’s second-quarter earnings call, according to Seeking Alpha transcripts. “Therefore, we are heavily weighted towards pure primary elective total joint replacement.”

By Amanda Pedersen | MD+DI

Image Credit: New York Times

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About Peter Coffaro 808 Articles
A growth-driven and strategic executive, Peter Coffaro commands more than 20 years of progressive management success within the orthopedic industry. Recognized by MedReps.com as one of the top medical sales influencers in the industry; he has 10 years of combined sales management experience and has held positions as a Director, General Manager and Distributor. Peter has worked for some of the top orthopedic companies in the world - Zimmer, DePuy and Stryker. He is also the founder of OrthoFeed: a popular blog that covers orthopedic news and emerging medical technologies. Peter is a three-time Hall of Fame award winner at Johnson and Johnson and has an extensive background in organizational development, business development, sales management, digital marketing and professional education. Peter holds a B.S. degree in Biology from Northern Illinois University.

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