Can a New CEO Right the Ship Before Zimmer Sinks?

It's been a touch-and-go sort of year for Zimmer Biomet, and the company continues to batten down the hatches. FDA hit the Warsaw, IN-based orthopedic device maker with an unusually long Form 483 last December based on quality control problems at its legacy Biomet facility. In January, the company went back to the drawing board and unveiled plans to invest $170 million to fix its supply chain and manufacturing and quality systems. Then, in July, David Dvorak resigned as CEO.  This week the company cut guidance for the second quarter in a row after missing the mark on both revenue and earnings per share in the third quarter. But at least one analyst seems to think there is still a turnaround on the horizon for Zimmer Biomet. "We still view the manufacturing challenges as ultimately fixable and a question of 'when and not if'. Unfortunately, the 'when' has again been shifted out and management now expects a full resolution in 2Q18," analyst Mike Matson of Needham & Co. wrote in a report Wednesday. Matson said he is "admittedly frustrated with the repeated delays," in the company's remediation progress, but he added that the company's discount valuation and Wednesday's stock sell-off (NYSE: ZBH) adequately account for its issues and that he continues to see Zimmer Biomet as an early-stage turnaround story. The company's share price dropped 5.37% Wednesday to close at $115.09. Slower-than-expected remediation at the Biomet plant caused supply shortages of certa...
Source: MDDI - Category: Medical Devices Authors: Tags: Medical Device Business Orthopedics Source Type: news