Synovis Life Technologies Inc. (NASDAQ:SYNO) may not have generated many headlines this year (which is not necessarily a bad thing), but the St. Paul company has quietly produced a rather impressive annual performance, especially compared to what remains of Minnesota’s shrinking, publicly traded medical device sector.
In a year when ATS Medical and AGA Medical were sold, and SurModics Inc. (NASDAQ:SRDX) sucked wind, Synovis’ fiscal 2010 revenues soared 18 percent to $68.6 million from $58.2 million a year ago, thanks to strong growth from its core Veritas soft tissue repair technology.
“We are pleased with our overall revenue results, [which are] … especially significant in light of the economic climate and the aggressive reaction by healthcare providers to evolving healthcare reform legislation,” CEO Richard Kramp said in a statement. “Synovis’ double-digit revenue growth speaks favorably of our people, our products and our markets. We have robust plans in place to continue on a strong growth trajectory in 2011 and beyond — fueled by our high potential products, particularly Veritas.”
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Synovis has seen countless comebacks and reinventions in its 25 year history. But the company seemingly has found its winning niche: producing implantable biomaterial that helps the body repair and regenerate soft tissue.
Synovis’ signature technology, Veritas, consists of converting cow tissue into a type of scaffolding that attracts the human body’s own cells and blood vessels, enabling it to remodel the repaired tissue type. Synovis hopes doctors will use Veritas to repair kidneys, bladders, breasts, and eventually, hearts.
For the year, Veritas sales rose 64 percent to $14.4 million compared to 2009. Veritas accounted for 21 percent of fiscal 2010 revenue, up from 15 percent the previous year.
If there’s one blemish on Synovis’ 2010 performance, profits fell 26 percent to $4.9 million, or 43 cents a share, from $6.6 million, or 56 cents a share, last year.
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But the profit decline was due to beefed up spending on sales and marketing, and investments in research, development and new technologies, including microsurgery products and orthopedic/wound care treatments.
For the full year, microsurgical revenue totaled $11.0 million, a 27 percent increase over 2009. Orthopedic and wound product sales totaled $685,000 for the fiscal fourth quarter, up 16 percent from the third quarter. (Synovis entered the orthopedic/wound care market when it acquired Pegasus Biologics in July 2009 and relaunched the portfolio earlier this year.)
Investors have rewarded Synovis’ performance, boosting the stock about 23 percent this year to just above $16 a share.
