SK Securities projected on the 19th that Osteonic, a manufacturer of orthopedic implants, will continue its growth trend, bolstered by the full-scale commencement of overseas exports.
SK Securities has set a new investment recommendation of 'buy' for Osteonic, with a target price of 10,300 won, which is 53% higher than the previous day's closing price of Osteonic.
Osteonic produces metal plates, screws, and pins that are inserted into the body when fractures or injuries to joints and ligaments occur. Heo Seon-jae, a researcher at SK Securities, noted, "Since the U.S. Food and Drug Administration (FDA) approval for major product lines such as sports medicine and trauma was completed last year, this year is expected to mark the beginning of a significant increase in overseas exports."
In particular, Osteonic's sports medicine product is a joint preservation product that connects bones and tissues when the cruciate ligament that controls the femur, tibia, or knee joint is ruptured. It is made from biodegradable materials that naturally decompose in the body, eliminating the need for a secondary surgery to remove the implant product after the operation.
Researcher Heo added, "Osteonic secured Zimmer Biomet as an OEM (original equipment manufacturer) partner and began supplying initial shipments (of sports medicine) to Europe, Japan, Australia, and Saudi Arabia from 2023," and noted, "Exports to the United States, the world's largest market, also began in the second quarter of this year."
He further stated, "Since the average selling price of products exported to the United States through Zimmer is approximately 1.5 to 2 times higher than in Korea, it is expected that Osteonic will continue to show gradual improvement in revenue."
Osteonic is also preparing to enter the U.S. market for trauma products through an ODM (original design manufacturer) contract with a global medical device company. It plans to export its CMF (cranio-maxillofacial) product line as it has secured approval from the National Medical Products Administration of China in the second half of this year, in partnership with the German medical device company B. Braun.
The trauma product line refers to implants used to treat fractures, dislocations, and soft tissue injuries of the hands, feet, arms, and legs. CMF products typically refer to plates and screws used to treat fractures, deformities, and tumors in the skull, face, and jaw areas.
Researcher Heo stated, "As Osteonic completed the major expenses necessary for product line expansion and certification last year, it is expected to enter the phase of significant profit leverage due to increased U.S. exports going forward."