Analysts Lower Forecasts for Zimmer Inc. Due to Dropping Demand for Hip Replacements

Boston, MAAnalysts at Leerink Swann have lowered their sales and earnings forecasts for Zimmer Inc. due to their reported drop in demand for the hip replacements that are made by this company, according to Mass Device.

The news source reported that the markets for hip and knee implant have been projected to be softer, a development that has led analysts to downgrade the earnings forecasts for Zimmer Inc. and other businesses in this industry.

According to the analysts, the forecasts have been adjusted to the fact that the companies' bottom line would have to reflect a more conservative market for hip and knee replacements.

"In what will probably be a frequent theme this quarter for the med-tech industry as a whole—soft procedure volumes—we are trying to get a little ahead of the curve and we are lowering our 2H11 and 2012 [worldwide] hip/knee growth estimates," Rick Wise and Richard Newitter, analysts for Leerink Swann, wrote in a note to investors.

The analysts went on to say that the number of lawsuits related to hip replacements and an overall cautious stance that people may take could be significant factors in the number of individuals who purchase the products. Along with this estimate, they noted the wider economic implications that could play a role.

Analysts noted the view would be more cautious due to "the possibility global economic pressures lead to an extended period of lower demand for procedures that are typically 'deferrable,' such as hip/knee surgery."

Zimmer Inc. is the target of a class-action lawsuit from a group of Canadian patients, as these individuals pursued the legal action due to an alleged problem with the Durom acetabular hip implant from the company, according to the Vancouver Sun.

Susan Wilkinson, who was designated as the representative plaintiff, alleged that the implant led her to experience significant pain in her left leg, groin and hip. She contended that the procedure left her with a clicking sensation and it felt as though it would "pop out," according to the lawsuit.

Wilkinson alleged that the faulty Zimmer Inc. product led to her trouble with falling asleep and made her seek the use of narcotic painkillers as part of the treatment for her hip pain, according to the news source.