Growing US CERAMENT BVF in-market sales

Lighthouse | 21 June 2018

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  • In-market sales of CERAMENT BVF in the US continue to show good growth; however, Zimmer Biomet’s existing inventory, and that of its distributor network, are sufficient to meet this increasing demand.
  • Bonesupport has confirmed that its current exclusive distributor for CERAMENT BVF in the US, Zimmer Biomet, has cancelled the majority of its orders for Q318 (the three months from June).
  • In May, Bonesupport announced that it would be terminating its exclusive US distribution agreement and setting up its own US distributor network to market both CERAMENT BVF and other products. Zimmer Biomet retains the exclusive right to sell and distribute CERAMENT BVF until 20 October 2018, with a further six-month non-exclusive period (to 20 April 2019).
  • Bonesupport is making good progress with building its US commercial network, with evaluation of potential distribution partners progressing to plan. We expect a further progress update at Q218 results on July 26. First direct CERAMENT BVF sales are expected in late October.

Trinity Delta view: FY18 is a year of transition for Bonesupport. From H218 onwards, the company’s focus on commercial execution should gain traction and begin to accelerate global CERAMENT sales. In the US, growth in end-user demand for CERAMENT BVF bodes well for the direct US sales model; this new model will generate higher margins, target stronger customer relationships, and have an increased focus on trauma (supported by CERTiFy data expected H218).

Importantly, the US commercial platform will be in place ahead of planned launch of antibiotic-eluting CERAMENT G in 2021. In the interim, it will be leveraged though an expanded offering of complementary products (such as those recently acquired from Collagen Matrix) with the aim of capturing a larger share of the overall US bone graft market. This is a critical step in Bonesupport’s transition from being a one-platform company to a global osteobiologics leader.

Greater clarity on US CERAMENT BVF orders removes uncertainty over Zimmer Biomet’s intentions, confirming our expectation that it would run down existing inventory during 2018. Our model already anticipated limited to zero re-ordering in Q318. This, coupled to the ongoing Zimmer Biomet hardware supply issues, underpins our expectation for lower US sales, and hence lower overall Bonesupport revenues in FY18 vs FY17.

We initiated on Bonesupport on 6 June with a fair value of SEK26/share. We make no changes to our valuation. Shares continue to trade near post-IPO lows, ahead of a number of potential value inflection points. Near-term, we highlight the Capital Markets Day in September.


21 June 2018

Price (SEK)10.0
Market Cap (SEKm)508.1
Primary exchangeOMX Stockholm
Company CodeBONEX
Corporate clientYes

Company description

Bonesupport is a Swedish orthobiologics company focused on developing and commercialising a pipeline of unique injectable drug eluting bioceramic bone graft substitutes based on its proprietary CERAMENT technology.


Lala Gregorek
+44 (0) 20 3637 5043

Mick Cooper PhD
+44 (0) 20 3637 5042


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