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The 10 Worst Performing Medtech Companies of Early 2016

Out of 91 of the world's largest medical device companies, these 10 have had the worst stock performance so far this year.

Chris Newmarker

From tougher price bargaining from customers to uncertainty over a next-generation LVAD, some medical device companies have had an especially rough time selling their stories to investors this year.

In fact, 56 out of 91 major medical device companies analyzed by Qmed saw their stock values decline during the first three months of the year. (Download Qmed's full spreadsheet of the 91 stocks.)

This year's volatile start in global stock markets played an important role, but there were some medical device companies that took an especially tough hit to their stock prices. Here are the top 10:

1. Lantheus Holdings Inc.: -44.08%

A maker of diagnostic imaging agents and products, Lantheus (North Billerica, MA) expects $285 million to $290 million in revenue this year, down from $293.5 million in 2015 and $301.6 million in 2014. Lantheus appears to be especially hard hit by the tougher price bargaining taking place throughout the U.S. healthcare industry.

One of Lantheus' major products is Xenon gas used in lung imaging. Lantheus has inked new Xenon contracts with key customers that specify committed volumes at lower prices. The new contracts, however, are expected to provide additional revenue and unit volumes in 2017. Plus, the company has had success growing sales of its key product, the echocardiography contrast agent Definity.

2. HeartWare International Inc.: -37.66%

Shares of LVAD maker HeartWare International took a 35% plunge on January 12 amid news of lower earnings and uncertainty about the future of its new MVAD system. The next day, St. Jude Medical--the owner of HeartWare's chief competitor Thoratec--announced better-than-expected fourth-quarter sales for Thoratec.

3. Greatbatch Inc.: -32.11%

The markets have not been kind so far this year to Greatbatch, a major medical device manufacturing outsourcer. The Frisco, TX-based company recorded a loss of 29 cents per share during the fiscal year ended January 1, though it would have been a $2.90 per share profit excluding costs related to Greatbatch's $1.73 billion acquisition of Lake Region Medical, an intellectual property lawsuit against against AVX Corp., and other costs. Sales fell short of expectations but were still up 16% for the year, to $687.8 million.

CEO Thomas Hook expressed optimism in February that last year's Lake Region acquisition will start to produce results: "The combination of the two companies under the new Integer brand establishes the company as the premier global medical device outsource partner, with the scale and breadth of capabilities to meet the demands of our customers and the patients they serve."

Greatbatch this year also rebranded its QiG Group subsidiary as Nuvectra and spun it off. The move was characterized as a refocusing for the contract manufacturer, since Nuvectra has its own proprietary neurostimulation technology platform.

4. Nxstage Medical Inc.: - 31.58%  

The Lawrence, MA-based company--which makes renal and kidney failure devices including the System One portable daily hemodialysis device--expects another year of losses in 2016, even as it grows sales. Nxstage expects a net loss in the range of $7 million to $12 million for fiscal year 2016, with sales growing to nearly $360 million. "As we continue to scale the higher margin System One segment and align our business in support of our growth opportunities, we remain on track to achieve our long-term growth and profitability targets," chief financial officer Matt Towse said in February.

5. Shinva Medical Instrument Co. Ltd.: -29.02%

A major Chinese maker of medical equipment founded in 1943, Shinva's poor stock performance this year could likely be exacerbated by the major correction taking place in Chinese stock markets. The Shanghai Stock Exchange A Share Index, for example, is down 15% so far this year.

The 5 Next Companies on the List

?      Agfa-Gevaert N.V. (Antwerp, Belgium): -25.19%

?      Invacare Corp. (Elyria, OH): -24.27%

?      Hitachi Ltd. (Tokyo): -23.85%            "

?      Natus Medical Inc. (Pleasanton, CA): -20.02%        

?      Novartis AG (Basel, Switzerland): -19.70% 

(Download Qmed's full spreadsheet of the 91 stocks.)

Learn more about cutting-edge medical devices at MD&M East, June 14-15, 2016 in New York City.

Chris Newmarker is senior editor of Qmed and MPMN. Follow him on Twitter at @newmarker.

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