On Jan 11, 2015, we issued an updated research report on New Jersey-based Integra LifeSciences Holdings Corporation IART – one of the world leaders in regenerative medicine. The company develops, manufactures and markets cost-effective surgical implants and medical instruments.
In the last reported third quarter of 2015, Integra squarely beat the Zacks Consensus Estimate. The top line shone on the back of healthy growth via organic and inorganic means across all of the company’s segments. However, foreign currency fluctuations continued to adversely affect Integra's international business.
Notably, one-third of Integra’s revenue growth was due to international expansion. The successful integration of MicroFrance fueled growth to a large extent. With MicroFrance’s inclusion into Integra’s business about to complete its first full year, Integra looks well on track with its initial expectations pertaining to the execution and integration of the same.
Further, Integra has adopted several near-term objectives to align with its three-pillar strategy. These include investments in innovative product development, geographic expansion outside the U.S. and strategic acquisition of new products and businesses to develop the company’s operations. In this regard, the acquisitions of MetaSurg, MicroFrance and TEI and their successful integrations will likely be a vital contributor to Integra’s growth in 2015.
On the flip side, Integra has been witnessing weak revenues across its U.S. Spine and Other segment, owing to continued pricing pressure and challenging market conditions. Moreover, competitive headwinds and unfavorable foreign currency translation also continue to pose threat. Based on current rates, Integra expects unfavorable foreign exchange rates to have an impact of approximately 3% to 4% on adjusted earnings for full year 2015.
Currently, Integra carries a Zacks Rank #3 (Hold).
Key Picks in the Sector
Some better-ranked med-biomed/generic stocks at the moment are Anika Therapeutics Inc. ANIK, Baxalta Inc. BXLT and Gilead Sciences Inc. GILD. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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