Quarterly results round-up: regulatory questions hang over Mindray; CYBX, FME, GB

This week has seen earnings from Cyberonics, Fresenius Medical Care, Greatbatch and Mindray Medical International. Below are the key figures and highlights:

• Vagal nerve stimulation (VNS) specialist Cyberonics has increased its full-year 2013 guidance slightly on the back of its Q3 results: it is predicting sales of $248-250 million (versus $246-249 million previously); adjusted net income of $46-48 million (versus $43-45 million previously); and adjusted diluted earnings-per-share of $1.66-1.72 (versus $1.56-1.62 previously). The firm could be due for another boost: it has submitted a formal request to the US Centers for Medicare & Medicaid Services (CMS), asking it to reconsider covering VNS therapy for drug-resistant depression. Cyberonics previously asked CMS to cover the treatment for depression in 2006, but was turned down in 2007. VNS has been reimbursed for drug-resistant epilepsy since 1999.
• Fresenius Medical Care has bounced back from a "relatively disappointing Q3" to post Q4 and full-year results in line with analyst expectations, according to JP Morgan Cazenove's David Adlington. He noted that "there has been a big increase in US revenue per treatment ($368 million vs $355 million in Q3)", but added that "Q4 will be less important than the outlook". Fresenius is predicting fiscal year 2013 sales of over $14.6 billion, which represents at least 6% year-on-year growth; and net income of $1.1-1.2 billion, almost negligible growth compared with this year. Fresenius was recently hit by a recall of Affymax and Takeda's Omontys injection, which Fresenius supplies to dialysis patients to treat anaemia, after postmarketing reports of serious hypersensitivity reactions including potentially life-threatening anaphylaxis. Fatal reactions have been reported in around 0.02% of patients following the first intravenous dose of Omontys, and over 10,000 patients have been treated so far, noted Morgan Stanley analyst Michael Jungling. However, he believes the "potential litigation risk against Fresenius [are] not a material headwind".
• Implantable medical device firm Greatbatch grew its top line in Q4 and full-year 2012, but swung to a net loss, primarily due to charges linked with the "consolidation" of its Swiss orthopaedic operations. Greatbatch announced plans in July to transfer most of the activities at its sites in Orvin and Corgemont, Switzerland, to other plants in Fort Wayne, Indiana, and Tijuana, Mexico, by the end of 2013. The company is anticipating 2-5% revenue growth in fiscal year 2013, to $660-680 million; and adjusted diluted EPS growth of 7-13% for calendar year 2013, helped by its cost-cutting measures.
• China's Mindray "comfortably" beat analyst expectations in its Q4, "with revenues and EPS ahead by $6 million and $0.03", respectively, wrote Jefferies' Raj Denhoy. However, there are "lingering questions" regarding an FDA warning letter received in November, "the subsequent and seemingly related departure of the prior North American divisional president, David Gibson, and a string of SEC [US Securities and Exchange Commission] inquiries into various accounting practices dating back to June 4 2012", the analyst added. Among the issues still unresolved from the warning letter are questions over the company's medical device reporting procedures, Mr Denhoy noted; while "the various SEC inquiries mainly surround liquidity concerns around receivables accounting". Mindray is expecting 2013 revenues to increase by at least 17% over the $1.06 billion posted in fiscal 2012, with China remaining its "primary growth engine"; it is predicting 2013 non-GAAP net income growth of at least 15% year-on-year. "However, questions on the ability to realise consistent leverage gains are likely to persist given the 200 base points negative disconnect between the top and bottom lines," Mr Denhoy cautioned.

Company	Period	Net revenue	% change	Net income/ (loss)	Previous net income/ (loss)
Cyberonics	Q3	$62.7	+15	$13.2	$9.5
Fresenius Medical Care	Q4	$3,706	+13	$257	$310
	Full year	$13,800	+10	$1,187	$1,071
Greatbatch	Q4	$159.2	+12	($5.6)	$5.6
	Full year	$646.2	+14	($4.8)	$33.1
Mindray Medical International	Q4	$316.1	+20	$55.8	$46.8
	Full year	$1,060.1	+20	$180.2	$166.6

All figures in millions unless otherwise indicated