[Click eStock] "Osteonic, Record Quarterly Sales... Growth Accelerates Through US Zimmer"

KB Securities forecasted on the 18th that Osteonic's growth will accelerate this year with sales to Zimmer in the United States.

Osteonic recorded its highest quarterly sales ever in the fourth quarter of last year, maintaining a steady growth trend. Jaeyoon Han, a researcher at KB Securities, stated, "Osteonic's fourth-quarter results last year showed sales of 9.7 billion KRW (up 21% year-on-year) and operating profit of 1.9 billion KRW (down 20% year-on-year)." He explained, "Especially, the fourth quarter being the peak season and the smooth ramp-up of its own brand were major factors contributing to the strong performance."

Positive momentum continues in overseas markets as well. Researcher Han evaluated, "Given that sales to key overseas clients such as Zimmer and B. Braun have not yet fully commenced, these results are even more meaningful." However, operating profit decreased compared to both the same period last year and the previous quarter. Regarding this, he explained, "The decline in profitability is due to proactive workforce expansion to increase production volume, which is a temporary issue unrelated to any fundamental deterioration."

Sales to Zimmer in the United States, which was identified as a core investment point for Osteonic, are expected to ramp up starting from the first quarter of this year. Researcher Han stated, "Starting with the first shipment in March this year, we expect to record significant annual sales." He also anticipated that although new medical devices typically require a ramp-up period after launch, this period is likely to be shortened by leveraging Zimmer's strong distribution network.

Entry into the U.S. market is also positive from a profitability perspective. Researcher Han explained, "The U.S. market commands overwhelmingly higher prices compared to other countries, so once sales to the U.S. fully commence, additional profitability improvements are expected." While it is too early to estimate the scale of U.S. sales this year, market attention is expected to focus on this being the first year when sales contributions from this key growth driver begin in earnest.

Meanwhile, Osteonic recently expanded its product portfolio by securing domestic distribution rights for the bone graft material ‘DBX Putty’ from Johnson & Johnson. ‘DBX Putty’ is a product used for reconstructing bone formation in damaged bones or spinal surgeries and has been recognized for its quality after being used in domestic hospitals for the past 20 years. Osteonic secured both the domestic distribution rights and distribution channels for this product, making immediate sales generation possible from the first quarter of this year.

The domestic bone graft material market is estimated to be about 100 billion KRW annually, which is expected to positively impact Osteonic’s sales diversification and performance improvement. Researcher Han assessed, "With the generation of bone graft material sales, an upside in annual performance is also expected."