5 of the Best Performing Medtech Companies of 2014 (So Far)

Posted in Medical Device Business by Chris Newmarker on June 11, 2014

A better-than-expected royalty payment enabled C.R. Bard to enjoy the largest percent increase in profits among major U.S. medical device companies in early 2014, according to a Qmed analysis of Securities and Exchange Commission filings.

Read on to find out about the top five:

1. C.R. Bard

+63.6%

The Murray Hill, NJ–based makers of catheters, stents and other medical device products earned $148.4 million during the first three months of 2014, a 63.6% increase from a year before. Revenue was up nearly 8% year over year, to $799 million.

A higher-than-expected royalty payment from W. L. Gore & Associates and recent acquisitions helped with the profits boost. But even without them, C.R. Bard’s profits would have still been up 12%, CEO Timothy Ring explained in a conference call transcribed by Seeking Alpha.

The company’s expansion into emerging markets, which now make up 7% of sales, is going better than expected. But Ring is staying conservative in his outlook:

”I would caution you against making any more of these results then a positive start to the New Year. We are sticking with our original guidance for 2014 as we believe our markets continue to experience uncertainty. The organic sales growth in the U.S. was close to flat in Q1 and our investment plan is not expected to start delivering accelerated sales growth in emerging markets until later on this year. So we've got a lot of work in front of us to achieve the objectives of our strategic investment plan.”

2. Johnson & Johnson

+35.1%

Johnson & Johnson’s stock is up about 13% in value for the year after an April earnings report that beat analyst’s expectations.

The New Brunswick, NJ–based pharmaceutical and medical device giant earned $4.7 billion off $18.1 billion in sales during the first three months of 2014, up from $3.5 billion in profits off $17.5 billion in revenue for the same period a year before.

The company's robust performance was actually driven by new and existing drug sales.

J&J said its Medical Devices and Diagnostics division sales of $7.1 billion were flat compared to the prior year, but that was mostly due to negative currency impact related to the overseas sales. Operationally, revenue was up 1.8%, driven by sales of products in the Orthopaedics business; the Specialty Surgery business; and Biosense Webster's electrophysiology products in the Cardiovascular Care business.

3. CareFusion

+21.4%

CareFusion saw profits of $102 million during its third quarter ended March 31, a 21.4% increase from the same period a year before. Revenue was up more than 7%, to $968 million.

Sales were driven by the company’s Procedural Solutions segment, which makes disposable products such as single-use skin antiseptic products and IV infusion administration sets, as well as reusable surgical instruments.

The segment outperformed with $397 million in sales, a 25% increase from the same period a year ago.

4. St. Jude Medical

+11.7%

Even amid a major reorganization and leadership changes, St. Jude Medical was still able to boost earnings by 11.7% year over year, to $249 million during the quarter ended March 29. Sales were up 1.9%, to $1.4 billion, from the first three months of 2013.

The Little Canada, MN–based company benefitted from a 5% increase in U.S. ICD sales driven by what St. Jude described as a “leadership position in quadripolar CRT therapy.” The company also announced four cardiac rhythm management approvals in the U.S., which are expected to drive sales later this year,

“St. Jude Medical delivered a solid first quarter by meeting or exceeding our expectations in each of our technology platforms. These results reinforce our confidence that we are on track to accelerate sales growth as our product mix shifts to faster growing markets and as we continue to launch new products that improve patient outcomes, ensure the highest quality and lower the costs of treating expensive epidemic diseases,” St. Jude CEO Daniel Starks said in the news release announcing the results.

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5. 3M Co.

+6.9%

3M Co.’s health care business played an important role in the manufacturing giant’s 6.9% increase in first quarter earnings off record quarterly sales.

The Maplewood, MN–based company saw a profit of $1.2 billion off $7.8 billion in sales for the first three months of 2014, up from $1.1 billion off $7.6 billion in revenue for the same period a year before.

3M’s health care business saw a sales increase of 4.8%, to $1.4 billion, and it would have been 6.2% if not for foreign currency translation. Sales increased across the health care portfolio. The most robust growth was in drug delivery, health information systems, food safety, critical and chronic care, and infection prevention.

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5 of the Largest Medtech Profit Drops of 2014

Chris Newmarker is senior editor of MPMN and Qmed. Follow him on Twitter at @newmarker.