Orthopedic Manufacturers Out in Force at Annual AAOS Meeting

In yet another indication of the strength of medtech's orthopedics sector, the recent meeting of the American Academy of Orthopaedic Surgeons (AAOS; Rosemont, IL) hosted 470 exhibiting companies in what was generally seen as one of the largest AAOS meetings in the seventy-four year history of the annual event. The five-day gathering drew an estimated 13,000 orthopedic surgeons and allied professionals from around the world. The exposition at the San Diego Convention Center featured what many analysts described as some of the most elaborate product displays and demonstrations ever seen at the show.

Medtronic Inc. (Minneapolis) introduced its Synergy Experience Stealthstation System, which combines image-guided navigation with the latest innovative spinal technologies. The system provides detailed 3-D views of the spine and facilitates complex minimally invasive surgeries in a safe and reproducible fashion with smaller incisions and less exposure to radiation.

DePuy Orthopedics Inc. (Warsaw, IN), a Johnson & Johnson company, announced several new products, including total hip replacements with advanced hip-bearing technology, the Agility LP total ankle replacement, an adjustable neck shoulder replacement system, and three new products designed for a less-invasive approach to fracture surgery for the hand, wrist, foot, and shoulder.

Zimmer Holdings Inc. (Warsaw, IN) announced an extension of its gender-oriented marketing campaign. Citing the success of the first knee replacement described as being designed to accommodate the unique demands of the female anatomy, the company will soon introduce two hip reconstruction systems specifically designed for and marketed to women. During the AAOS meeting, Zimmer announced that 10,000 Gender Solutions knees were implanted in the fourth quarter of 2006 and an additional 12,000 will be implanted in the first quarter of 2007.

While most orthopedic firms privately dismiss Zimmer's move as a marketing gimmick, the company will soon have competition. Wright Medical Technology Inc. (Arlington, TN) has applied for FDA approval to market the Advance Stature, a size-specific knee replacement system that is expected to be largely, but not exclusively, targeted to women.

Michael S. Matson, senior medtech analyst with Wachovia Capital Markets LLC (New York City), says that while were there were many product introductions and some surprises at AAOS 2007, "There was little that was really new. Many of the new product offerings were evolutionary rather than revolutionary." Matson noted that direct-to-consumer (DTC) advertising is heating up again, with campaigns under development at many of the major joint-replacement firms.

At the AAOS meeting, several joint-replacement companies featured visits from prominent athletes they have signed as company spokespersons for their consumer marketing campaigns. Making the show rounds were Olympic gymnast Mary Lou Retton for Biomet Inc. (Warsaw, IN); baseball pitcher Randy Johnson, Tour de France cyclist Floyd Landis, and ultra marathoner Cory Foulk for Smith & Nephew plc (London); and former tennis pro Jimmy Connors for Wright Medical Technology.

While DTC advertising is gaining strength in the orthopedic sector, the results of a survey released during the AAOS meeting revealed that more than 75% of surgeons believe that DTC campaigns have adversely affected their relationships with patients and negatively affected their practices.

Kevin J. Bozic, MD, MBA, an orthopedist at the University of California, San Francisco, reported the findings in a presentation titled "Impact of Direct to Consumer Advertising on Physician Attitudes and Behavior in Orthopaedic Surgery." The 36-question survey was conducted among 737 members of the American Association of Hip and Knee Surgeons (Rosemont, IL).

"Advertising related to orthopedic devices and procedures is here to stay," says Bozic. "If used appropriately, in terms of accurate [and] objective information, it can be a useful tool to surgeons, hospitals, and the medical device industry. But the vast majority of surgeons we surveyed believe that the information being transmitted is inaccurate, biased, and misleading."

Reflecting on AAOS 2007 and the potential for sector growth going forward, Wachovia analyst Matson, says, " While we do not expect the market to return to 2004 levels of growth (near 20%), we expect 2007 growth on par with the industry's long term average of 9-11%."

Next year's annual AAOS meeting is set for March 5-9, 2008, at the Moscone Center in San Francisco.

© 2007 Canon Communications LLC

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