Among the world's largest medical device companies, these 10 had the worst stock performance during the first nine months of 2016.

Chris Newmarker

An increasing number of major medical device companies are actually seeing their stock prices increase this year. But count the following 10 companies as exceptions to the rule. 

Many of these companies appear to be struggling with change, whether it involves new product launches or grappling with a classic film products business or transforming into a company focused more on post-acute care.

And while the company with the largest stock decline--Integer Holdings--is a U.S. company, the majority of the 10 have stock traded outside the United States. It's a sign of how the U.S. is a relative oasis of economic stability these days. (Download Qmed's full spreadsheet of the 88 stocks.)

Here are the 10 medical device companies with the greatest percentage declines in stock price over the first nine months of 2016:

1. Integer Holdings (Formerly Greatbatch): -59%

Bad new continues for Frisco, TX-based Integer--a major medical device contract manufacturer that changed its name from Greatbatch and its New York Stock Exchange ticker symbol to ITGR earlier this year. S&P over the summer slashed its own expectations for Integer by about 10%, to $1.38 billion in sales and $300 million in earnings, after a number of quarterly results that didn't meet the company's own guidance. 

Integer officials have offered a number of reasons for the less than thrilling results: new product launches that were delayed, existing programs tapering off sooner than expected, the lengthy integration of Lake Region Medical (acquired last year for $1.73 billion), and customers aggressively reducing inventory levels.

The company announced September 14 that its chief financial officer Michael Dinkins will be leaving the company after a replacement is found. This week, there was news that the company's 120-employee Clarence, NY, factory is closing, with operations moving to another Integer facility in Brooklyn Park, MN. 

2. Agfa-Gevaert: -46%

The Belgian multinational is seeking to overcome declining sales of its classic film products across all its business segments, and that includes healthcare products such as imaging films, the company reported in late August. Second quarter revenues year-over-year were down by 6.7% (4.1% excluding currency rates) to 645 million euros ($723 million), even as Agfa-Gevaert squeezed out more profits. 

Despite good IT business performance, Agfa HealthCare's top line was down by 2% on a currency comparable basis. The company reported: "The decline is mainly explained by the Imaging segment's hardcopy business, where sales were exceptionally high in the first three quarters of 2015. The normalization of hardcopy sales in this year's first and second quarter led to a top line decrease compared to the same periods in 2015."

3. Invacare: -36%

The Elyria, OH-based maker of home and long-term care medical products has roots going back to the Worthington Co., which produced wheelchairs in the late 19th century. Recently, company officials have sought to transform Invacare from being a general durable medical equipment company to one more focused on products for clinically complex and post-acute care. Financially, it appears to have been tough going. Losses in the second quarter ended June 30 increased to $20.2 million, up from a loss of $15.7 million for the same quarter a year before. Revenue was down more than 7% to $532.6 million. Meanwhile, the company is still working to a resolve an FDA consent decree and injunction from 2012, related to its related to the company's corporate headquarters and Taylor Street wheelchair manufacturing facility in Elyria. 

As part of the Invacare's transformation strategy, the company on September 30 announced the $13.8 million sale of its Professional Medical Imports (PMI) division, which includes its ProBasics line of durable home medical equipment, to Middleburg Heights, OH-based Compass Health Brands. 

4. Shinva Medical Instrument Co: -35%

Shinva, a major Chinese maker of medical equipment founded in 1943, could see its stock performance decline 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 International Monetery Fund and China Beige Book International are among those who have been raising warnings about underlying problems with China's economy. 

5. Hitachi: -32%

Revenue has been growing in recent years for Hitachi. But the Japanese multinational's profits of about 295 billion yen ($2.9 billion) for the fiscal year ended March 31 was only a little over half what it was two years before. Japan's economy has been recovering at a slower pace, and China's economic slowdown has had negative effects, according to Hitachi. The company's healthcare business, however, actually saw higher earnings, reflecting the effects of business restructuring.

For the first quarter ended June 30, profits were down 16% year over year, to 79.8 billion yen ($776 million). 

The Next 5 Companies on the List

(Download Qmed's full spreadsheet of the 88 stocks.)

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

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