Last year was transformational for Corin Group, the Gloucestershire-based orthopaedic technology company.
In the summer, the company won key regulatory approval to market its metal-on-metal hip resurfacing product Cormet in the US, a move that opened the door to the world’s largest orthopaedic market.
Corin is one of only two companies authorised to offer hip resurfacing products in the US, the other being fellow UK group Smith & Nephew.
Corin has teamed up with Stryker, a market leader in orthopaedics in the US, where 300,000 conventional hip replacements are carried out each year. It is estimated that hip resurfacing could take up to 15 per cent of the market in the next few years. Stryker said recently that Cormet “ought to be a big driver” for its business in 2008.
Corin’s technology is specifically targeted at a younger, more active age group, the “baby boomer” generation currently in their 50s and 60s.
Recipients of conventional hip replacement devices can suffer from a lack of mobility. Such hip replacements can also have a relatively short shelf life, making them unsuitable for younger patients.
However, Corin’s metal-on-metal technology involves resurfacing the head of the thigh bone with a metal cap that articulates with a metal socket embedded into the pelvis.
The result is great mobility and improved longevity, while the resurfaced hip is also considerably more hard-wearing than a traditional replacement.
“The only way to crack the US market is to have an innovative product – and that’s what we’ve got,” says Simon Hartley, interim chief executive.
“Stryker did not have a metal-on-metal resurfacing product so they were the ideal partner for us,” he adds.
Michael Mitchell, analyst at Oriel Securities, says: “Resurfacing devices are going to offer significant advances for hip replacements to a young, active patient group.
“Resurfacing has been a hot topic in the orthopaedic industry for many years.
“Most of the big players in the industry are looking to introduce resurfacing technology in the US, but only Corin-Stryker and Smith & Nephew have managed to do so – so far.”
Given the length of time it can take to gain US Food and Drugs Administration approval, Mr Mitchell says it may be several years before alternative hip resurfacing products come to market.
One of more than 15,000 people to benefit from Corin’s hip resurfacing technology is Steve Boswell, an army physical training instructor from Lichfield, Staffordshire, who completed the gruelling North Pole Marathon last year despite being a recipient of a double hip replacement.
Corin is also active in other areas of orthopaedics: the group produces total knee replacements and unicompartmental knee replacements (where just a part of the knee is replaced in cases where the whole joint is not affected by arthritis) as well as replacement ankles, shoulders and ligaments.
In addition to the US and the UK, the group sells into other leading markets including Australia, Austria, China, France, Germany, South Africa, Spain and Japan.
Julie Simmonds, analyst at Piper Jaffray, says Corin’s push into the US was likely to gather momentum as more surgeons were trained to instal its devices. She says: “Corin has managed to break into the US market and the key to the company is the growth potential in the US.
“Corin has some good technology and the deal with Stryker is on good terms.”
Corin’s break into the US helped its shares to an all-time high of 635p in October, and the group closed 2007 up 87 per cent on the year.
This compares with a price of 111p when the company was floated in the London Stock Exchange in 2002.
Although pre-tax profits for 2006 were a modest £3.6m ($7.2m), analysts expect growth to accelerate during the next few years. Oriel Securities is forecasting pre-tax profits of £5.6m for 2007, rising to £22m by 2009.
Founded in 1985 by then-chairman Peter Gibson, Corin began by offering old-style total hip replacement and knee systems before evolving into the development of more innovative orthopaedic devices. The group’s products, made from stainless steel, titanium and cobalt chrome alloys, are still manufactured in the Cotswold market town of Cirencester.
Mr Hartley stepped up to the role of interim chief executive late last year following the departure of Ian Paling, who left the company for personal reasons. Finance director since the company floated, Mr Hartley will revert to that position in May when Peter Huntley – who was director responsible for indirect markets at Smith & Nephew – takes over as chief executive.
Among Mr Huntley’s priorities will be to gain access to the US market for other Corin products. The group has already submitted an application to begin US trials of Uniglide, its unicompartmental knee device. Stryker has again been lined up as distributor.
Mr Hartley says: “The orthopaedic industry is dominated by the big US players. Corin was set up to give British surgeons the opportunity to develop products and bring them to market.
“We are a small British company taking on the Americans and beating them with innovative products.”
