Zimmer Biomet saw hip and knee procedure volumes bounce back in the first quarter, but whether or not the recovery is sustained beyond Q1 remains to be seen, given multiple headwinds. Still, the Warsaw, IN-based orthopedic device company raised its 2022 revenue and earnings guidance.
The company's revenue and earnings per share came in well above Zimmer Biomet's own expectations and above analyst expectations, which CEO Bryan Hanson attributed to stronger-than-anticipated COVID recovery in the quarter.
"If I look at the U.S. recovery, it was stronger and faster than I think anyone expected pretty much across the board," Hanson said, according to SeekingAlpha transcripts of Zimmer Biomet's first-quarter earnings call. "And while we continue to see COVID surges in [Europe, Middle East, and Africa] and China, the impact on overall procedure cancellations has been minimal, at least so far."
The company saw strong performance in large joints, especially in its knee franchise, he noted.
"We know it's still early in the year, but based on what we saw in the quarter, and really current trends in the Q2, our confidence in 2022 growth has definitely increased," Hanson said. "And as a result, we're raising and tightening our full-year guidance."
That said, the CEO acknowledged that Zimmer Biomet is facing a number of headwinds, including supply challenges, inflation, and impacts related to the war between Russia and Ukraine. Given the company's revenue dependence on elective procedures, however, Hanson said COVID recovery outweighs those headwinds.
"Our new product pipeline continues to deliver," Hanson said, noting that the company is adding more innovation and value to Zimmer Biomet's ZBEdge ecosystem, such as its first AI-based solution, the WalkAI.
He also mentioned the company's recently launched functionality for Mymobility platform, which is under the umbrella of Zimmer Biomet's exclusive partnership with Apple. The company partnered with Apple a few years back to develop the Mymobility digital care management platform that uses iPhone and Apple Watch to help orthopedic surgeons deliver support and guidance to patients through a more connected experience. Mymobility is designed to deliver continuous data and patient-reported feedback to facilitate care, outcomes, and patient satisfaction about surgical preparation and recovery.
Hanson also noted that early feedback on Persona IQ, Zimmer Biomet's smart knee implant (pictured above) has been positive.
"All of these things combined are highlighting the possibilities around data collection and integration on the patient experience," he said.