Zimmer Biomet Holdings, Inc. ZBH has received the FDA approval for its first spinal tether device — The Teather — for the treatment of scoliosis in young patients. Per the company, this is the first nod over the past 15 years for a device of humanitarian use in spinal pediatrics. Considering the untapped potential of this space, we expect this development to fortify the company’s Spine segment.
What is Scoliosis?
Going by OrthoInfo’s definition, Scoliosis is a condition that causes the spine to curve sideways. Idiopathis Scoliosis is the most common type and can develop in toddlers and children. However, the disease strikes during puberty in most cases.
Traditional treatment of Scoliosis involves large incisions, extensive disruption of soft tissue and restriction of the spinal motion with metal rods inserted along both sides of the spine to secure and align the vertebrae. However, the medical practitioners have always searched an alternative non-fusion surgical option to cure Soliosis without limiting the skeletal development of the young patients.
How Effective is The Teather?
According to Zimmer Biomet, its anterior vertebral body tethering (AVBT) solution, The Tether, uses a strong, flexible cord rather than traditional metal rods to pull on the outside of a scoliosis curve. This time, the inside of the curve is left free to grow. In this growth modulation approach, the treatment helps achieve a straighter spine without the limitations of spinal fusion. Additionally, unlike fusion metallic rods, the Tether is positioned between the ribs utilizing an endoscopic minimally invasive approach through a few small openings.
Considering the importance of this innovative treatment approach for the pediatric patients, The Tether is available through the FDA's humanitarian device exemption (HDE) pathway.
Huge Market Prospect
Per Persistence Market Research report, the global scoliosis management market has been estimated to reach a value of $2,460.4 million in 2018 and is expected to see a CAGR of 3.6% over the forecast period of 2018-2028.
Given the fact that unlike traditional treatments, growth can be harnessedto gradually correct the tethered portion of the spine under Zimmer Biomet’s ABVT procedure, this approach is expected to gain a wide market acceptance.
Spine Arm to Get a Boost
Zimmer Biomet’s Spine business has witnessed sluggish growth over the last few quarters due to several near-term challenges. The company, however, expects recovery on the back of several upcoming product launches including ROSA Spine and Walter (expected in the first half of 2020). Meanwhile, this latest breakthrough under AVBT targeting a select patient population seems well-timed.
Share Price Performance
This leading musculoskeletal healthcare company has outperformed its industry over the past six months. The stock has rallied 11.4% compared with the industry’s 7.7% rise.
Zacks Rank and Other Key Picks
Zimmer Biomet carries a Zacks Rank #2 (Buy). A few other top-ranked stocks in the broader medical space are Medtronic MDT, Baxter BAX and NuVasive NUVA, each carrying the same top Zacks Rank as Zimmer Biomet. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Medtronic’s long-term earnings growth rate is expected at 7.13%.
Baxter’s long-term earnings growth rate is projected at 12.8%.
NuVasive’s long-term earnings growth rate is estimated to be 12.75%.
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