Goldman Neutral On Stryker (SYK)

Goldman Sachs has a Neutral rating on Stryker Corp.

after the company announced a sale of a division. In a note sent to investors Goldman writes, "This evening, Stryker announced the sale of its OP-1 (spinal biologics, around 1% of sales) for $60 mn to Olympus. The sale includes OP-1 Implant, OP-1 Putty, Opgenra and Osigraft, for use in orthopaedic bone applications as well as the Leblon, NH manufacturing facility. Stryker management indicated that the sale of this business does not impact continuing 2010 EPS guidance of $3.27-3.30 (consensus currently at $3.29, GS at $3.31). The company will take a non-cash charge of $75-80 mn in Q4, or $0.19-0.20 on a GAAP basis. As a reminder, the OP-1 franchise was Stryker's effort to enter the bone morphogenic protein segment (dominated by Medtronic) of the spine market. OP-1 sales are annualizing at $94 mn under a humanitarian device exemption (HDE) and have not been growing since 2008, by our estimates. Management indicated that the proceeds from the sale would be used for other R&D initiatives." Shares of SYK lost 58 cents yesterday to close at $51.53.