FDA approves S&N hip system -- Two Germantown surgeons can now begin using technology

May 11, 2006 --

Smith & Nephew's Birmingham Hip Resurfacing system won government approval Wednesday for use in the United States.

The move by the Food and Drug Administration, allowed the British firm, whose orthopedic division is in Memphis, to leapfrog Wright Medical Group Inc., which has a similar product.

It also paved the way for two Germantown surgeons to begin using the technology and help push the price of the U. S. version of Smith & Nephew stock up more than 3 percent Wednesday.

"It will mean surgical options to relieve pain from osteoarthritis for younger patients," said Scott Flora, president of orthopaedic reconstruction at Smith & Nephew in Memphis.

The FDA action won't have an immediate effect on the company's manufacturing in Memphis, he said. For now, the systems will be made in England.

Smith & Nephew has two other versions of the system selling worldwide and two innovations in research, Flora said. As those come to market and use in the U.S. grows, manufacturing may start in Memphis, but that's at least three years away, Flora said.

"It's good for the community to see the ongoing success of that business," said Dr. Steve Bares, president and executive director of Memphis Bioworks Foundation.

Although production won't be done here, sales, marketing and research and development may get a boost from the product, he said.

"The impact is really on the patients the physicians in Germantown operate on," Bares said.

The main advantages of the system, rolled out in England in 1997, are that the surgeon cuts out far less bone than in the standard hip replacement operation and it includes metal ball and socket, reducing wear, said Flora in a telephone interview from Scotland where he was at a management meeting.

"That will be better to use in younger and more active patients, giving them a hip that is closer to the ideal functioning total hip than in the past," said Dr. David LaVelle. He and colleague Dr. James Harkess, both of Campbell Clinic, are the only Mid-South surgeons trained to use the resurfacing.

And the metal-on-metal structure along with the technique of capping the ball on the thigh bone rather than cutting it and other bone off mean the resurfacing will last longer than traditional hip replacements, he said.

LaVelle and Harkess do 350 to 400 hip replacements a year, LaVelle said. About 300,000 are done annually in the U.S.

The surgeons went to Birmingham, England, for a week to train with Dr. Derek McGinn, a pioneer of the system. About two years ago, Smith & Nephew bought Midland Medical Technologies, the Birmingham-based firm that produces the resurfacing system.

The technique has been used in the United Kingdom, Europe, Australia and Canada. The FDA approved U.S. use of the system based on clinical trials overseas. That's rare, said Raj Denhoy, analyst with Piper Jaffray in New York.

"We put a compelling body of research before the FDA," Flora said.

McGinn's experience was 98.4 percent of his operations had no complications over an 8.3 year period, said Victor Rocha, a Smith & Nephew spokesman.

While Smith & Nephew got its go-ahead, Wright Medical has waited two years for FDC approval of a similar product.

Birmingham Hip and Wright's Conserve Plus are comparable but different, said John Bakewell, chief financial officer.

He said he was not in a position to comment on the difference or on the Smith & Nephew approval coming before Wright's device won clearance.

The FDA action will create a $200 million to $400 million U.S. market for Birmingham Hip Resurfacing, Denhoy said.

Flora said use of the product will begin slowly. About 40 surgeons have been trained to use the product and others who want to use it will have to get their training from those doctors.

Edward Ridley-Day of Lehman Brothers put the added revenue for the firm at $18 million this year as he raised his rating on Smith & Nephew stock from equal weight to overweight.

In the United Kingdom and Europe, Birmingham systems are used in 15 to 20 percent of surgeries, Denhoy said.

The announcement Wednesday pushed up the price of the company's American Depository Rights (ADRs), the form in which the stock trades on U. S. markets, by $1.31 or 3.15 percent to $42.88 at the end of normal trading hours.

- David Flaum: 529-2330

This article is ﾩ 2006- Commercial Appeal, The (Memphis, TN)