Replies to post #177270 on Biotech Values

[DewDiligence]

Possibly bearish finding for SYK, ZMH, and other orthopedic-implant companies:

http://in.reuters.com/article/2014/06/30/us-knee-replacement-inappropriate-idINKBN0F52LC20140630

…Riddle and his team analyzed data from a study of about 4,800 people in the U.S. with knee osteoarthritis or at high risk of the condition. During the study period, 205 of them had total knee replacement surgery.

…Less than half of knee replacements - 44 percent - were classified as appropriate, according to findings published in Arthritis & Rheumatology. That left about 22 percent in the inconclusive category, which included patients with severe symptoms who were either younger than 55 years old or had less joint damage and normal mobility.

[DewDiligence]

ZMH -3% on lowered 2014 sales and EPS guidance:

http://finance.yahoo.com/news/zimmer-holdings-inc-reports-second-113000877.html

Full-year revenues are now expected to increase between 2.0% and 3.0% on a constant currency basis from 2013. Previously, the Company had estimated full-year revenues would increase between 3.0% and 5.0%, constant currency.

…The Company now projects full-year 2014 diluted earnings per share to be in a range of $4.65 to $4.75 on a reported basis [GAAP] and $6.00 to $6.10 on an adjusted basis [non-GAAP]. Prior guidance for full-year 2014 reported and adjusted diluted earnings per share was $4.90 to $5.10 and $6.00 to $6.20, respectively.

This updated guidance reflects estimated charges for inventory and manufacturing related expenses, quality and operational excellence initiatives, certain claims and special items of $250 million on a pre-tax basis, and an additional $70 million for expenses related to the pending Biomet merger, totaling $320 million or approximately $1.35 per diluted share, on an after-tax basis.

I.e. the midpoint of the guidance range for 2014 revenue growth (excluding FX) has been reduced by 150 basis point from 4% to 2.5%, while the midpoint of the guidance range for non-GAAP EPS has been reduced by $0.05 from $6.10 to $6.05. (The guidance for GAAP EPS includes a lot of moving parts, as described above.)

[DewDiligence]

Following the merger with Biomet, ZMH will be known as Zimmer Biomet:

http://finance.yahoo.com/news/zimmer-announces-executive-leadership-team-120500086.html

[DewDiligence]

Observation: ZMH-Biomet deal is taking a looong time to close. (ZMH reported 4Q14 results today.)

[DewDiligence]

ZMH-Biomet deal finally closes—merged company called Zimmer Biomet Holdings with ‘ZBH’ ticker symbol (starting 6/29/15)

http://finance.yahoo.com/news/zimmer-completes-combination-biomet-170600752.html

It took 14 months(!) from deal announcement (#msg-101076573) to closure.