ANALYST: ORTHOPEDIC SURGEONS' MEETING OFFERS HINTS OF MARKET TRENDS

Reporting on the recent American Academy of Orthopaedic Surgeons meeting, Merrill Lynch Research analyst Michael Jüngling highlighted trends in orthopedic surgery and their impact on the orthopedic device market.

For 2007, Jüngling is predicting market growth in joint reconstruction of approximately 9 percent, with growth in 2008 expected to be about the same, "although that could prove conservative with the Japanese price cut annualizing." Further, the patient population entering the U.S. hip resurfacing market should expand.

"We believe the focus on the underdeveloped and growth category of 'small bones' is likely to increase," Jüngling added.

Furthermore, large orthopedic companies "are showing strong interest in the dental implant sector," he said. "But high valuations may only drive small acquisitions."