Wright Medical Group N.V. (NASDAQ:WMGI) recently announced the premarket approval (PMA) from the FDA for its AUGMENT Injectable Bone Graft platform. The company will initiate the marketing of the product shortly in the United States and complete the rollout process within the next four to six weeks.
AUGMENT Injectable is the first clinically proven injectable protein therapeutic in the U.S. orthopaedic market. It already has a strong foothold in the Canadian and Australian markets. With the latest development, Wright Medical will expand its AUGMENT franchise in the United States.
Following the news, the company announced plans to update 2018 annual guidance on its second-quarter earnings call scheduled in August. Per management, the latest development will deliver sustained growth for the U.S. AUGMENT Regenerative Solutions platform over the next several years.
Shares Up
Shares of Wright Medical inched up 1.2% to close at $26.10 following the announcement. In fact, the stock has returned almost 7.9% compared with the industry’s rally of 5.7%. The current level also compares favorably with S&P 500 index’s rise of 2.1%.
The stock has a Zacks Rank #3 (Hold).
Why is a PMA Required for AUGMENT Injectable?
PMA is the FDA process of scientific and regulatory review of a Class III medical device. Class III medical devices provide quick recovery but present a potential, unreasonable risk of illness or injury.
For investor’s notice, AUGMENT Injectable Bone Graft is a Class III medical device, which makes it highly unique in comparison with the traditional autologous bone grafts, allograft and synthetic bone growth substitutes that are already available in the market.
The PMA approval for the AUGMENT Injectable has provided Wright Medical with a competitive edge in the niche MedTech space in the United States.
Wright Medical’s AUGMENT Platform
Notably, the AUGMENT Injectable Bone Graft platform has same clinical indications as the company’s flagship AUGMENT Bone Graft. AUGMENT Bone Graft received FDA approval in 2015.
In fact, AUGMENT Bone Graft is the first and only alternative to autograft in hindfoot and ankle arthrodesis. The platform is currently in its third year on the market and has been the fastest growing product in the company’s portfolio.
The AUGMENT line of products fall under the Biologics revenue segment that raked in $23.4 million in the first quarter of 2018, down 1.6% from year-ago levels. While international revenues in the segment rose to $5.3 million, U.S. sales dropped to $18.2 million. It has an estimated market opportunity of approximately $300 million in the U.S. orthopaedic market.
Key Picks
A few better-ranked stocks in the broader medical space are Abiomed, Inc (NASDAQ:ABMD) , Genomic Health Inc (NASDAQ:GHDX) and Varian Medical Systems, Inc (NYSE:VAR) .
Abiomed has a long-term earnings growth rate of 27%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Genomic Health has an expected earnings growth rate of 187.5% and a Zacks Rank #1.
Varian Medical has a projected long-term earnings growth rate of 8%. The stock carries a Zacks Rank #2.
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Varian Medical Systems, Inc. (VAR): Free Stock Analysis Report
ABIOMED, Inc. (ABMD): Free Stock Analysis Report
Wright Medical Group N.V. (WMGI): Free Stock Analysis Report
Genomic Health, Inc. (GHDX): Free Stock Analysis Report
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