Integra LifeSciences Says Transformation Is Working as SurgiMend Relaunch Nears

Key Points

• Integra LifeSciences says its transformation efforts are gaining traction, with Q1 revenue and EPS beating the high end of guidance and internal indicators showing fewer supply disruptions, better yields and improved cash flow.
• The company is keeping its core focus on neurosurgery, tissue reconstruction and ENT, and is preparing to relaunch SurgiMend in the fourth quarter after operationalizing the Braintree manufacturing facility in June and rebuilding inventory in Q3.
• Management is targeting continued recovery in cash generation and margins, with $25 million to $30 million in cost savings, reduced tariff pressure, and goals of about $200 million in operating cash flow and $140 million in free cash flow this year.

Integra LifeSciences NASDAQ: IART is keeping its core strategy intact following a leadership change that returned Stuart to the roles of chairman and chief executive officer, Chief Financial Officer Lea Knight said during a Bank of America med tech conference discussion hosted by analyst Rei Tan.

Knight said the company’s board and former CEO Mojdeh Poul reached a mutual decision for Poul to step down. She said Stuart has backed the operational transformation work already underway, including efforts to strengthen operational capabilities and quality management systems.

“Those are initiatives led by Mojdeh Poul, but they had the approval of the Board, and Stuart has also given it his full force and backing,” Knight said.

She added that the company’s focus areas — neurosurgery, tissue reconstruction and ENT — will remain unchanged. Knight said those markets represent a total addressable market of about $9 billion, with Integra operating in niche categories where it is generally ranked first or second.

Integra Points to Lower Volatility After Q1 Results

Knight said Integra’s first-quarter results offered an early proof point that its transformation efforts are gaining traction. The company reported revenue and earnings per share above the high end of its guidance, which Knight said reflected operational improvements.

She said internal indicators supporting management’s confidence include fewer and less severe supply disruptions, better visibility from a supply chain “control tower,” improved yields and stronger external regulatory audit results. Cash flow also improved meaningfully in the first quarter, she said.

“As we measure all of these indicators, what we’re seeing, in fact, is it is helping to lower the volatility, which is going to be the key to allow us to perform more consistently from a growth perspective,” Knight said.

Knight reiterated that the company views its recent challenges as supply-related rather than demand-related. She said Integra does not expect to expand its commercial sales force in the near term, instead focusing on consistent product supply, returning products to market and using analytical tools to improve commercial execution.

Braintree Facility and SurgiMend Relaunch in Focus

Discussing manufacturing, Knight said issues at Integra’s Boston facility stemmed from “an accumulation of gaps” in the quality management system that were compounded by the physical limitations of the site. By contrast, she described the Braintree facility as a “world-class tissue manufacturing facility” designed to improve process flow and efficiency.

Knight said Integra has revamped its quality management system, reduced manual processes, validated manufacturing protocols and added new leadership at the site. The company remains on track to operationalize Braintree in June, build inventory in the third quarter and support a fourth-quarter launch of SurgiMend back into the market.

She said the market for surgical matrices in breast reconstruction is about $800 million and growing at double-digit rates. Knight also said market trends have become more favorable for Integra, including a shift away from human ADM toward xenografts and resorbable synthetics, areas aligned with SurgiMend and DuraSorb.

Integra expects to pursue PMA labels for SurgiMend and DuraSorb in implant-based breast reconstruction, with Knight saying the company expects those in 2027. She said the relaunch strategy will be “phased and disciplined,” beginning with key prior users.

PriMatrix Relaunch and Reimbursement Dynamics

Knight said Integra is pleased with the relaunch of PriMatrix, which returned to the market in the fourth quarter of 2025 after being off the market for more than two years. She said the initial launch was controlled, with broader expansion in the first quarter, and performance has been consistent with expectations.

Some prior users have returned, while others want Integra to continue demonstrating reliable supply, Knight said. She added that the company does not believe it needs to meaningfully change pricing to regain share because of product differentiation and clinical trust.

On wound care reimbursement, Knight said about 90% of Integra’s business is in the inpatient acute setting, where reimbursement under DRGs has not changed. She said wound reconstruction products delivered double-digit growth in the first quarter.

For the approximately 10% of the business in outpatient settings, Knight said Integra has not seen the same disruption as others. She pointed to the company’s product price, size options and clinical evidence, noting that Integra was already priced in line with the current reimbursement rate of $127 per square centimeter.

Growth Outlook, ENT Pressures and Capital Allocation

Knight said both tissue reconstruction and specialty surgery are expected to contribute to growth, though tissue reconstruction is expected to grow faster as supply reliability improves and products return to the market. She said SurgiMend should contribute to growth in 2026, with PMA labels for SurgiMend and DuraSorb expected to support further growth in 2027.

In ENT, Knight said Integra continues to face reimbursement-related headwinds in balloon sinuplasty, which affected results in 2025 and are expected to continue into 2026. She said growth opportunities are stronger in navigation systems and Eustachian tube products, which could eventually help return ENT to a mid-single-digit to high-single-digit growth trajectory.

On capital allocation, Knight said debt repayment remains the priority. Integra is targeting a leverage range of 2.5 times to 3.5 times, and Knight said the company expects to be just outside the upper end of that range by the end of 2026 and within the range in 2027.

Knight said M&A could eventually return to the strategy, but only after operations stabilize and cash flow improves. Potential deals would likely be tuck-in to midsize opportunities in neurosurgery, tissue reconstruction, ENT or adjacent markets.

Tariffs, Cost Savings and Cash Flow

Knight said Integra recorded a $0.10 first-quarter EPS benefit relative to guidance from tariffs. That included a $0.03 refund for prior-year tariffs and $0.07 of avoided tariff expense after IEEPA tariffs were ruled unlawful.

For the full year, Integra now expects tariff impacts of about $0.10 to EPS, compared with a prior expectation of $0.32. Knight said the company has not reflected a potential additional $0.12 benefit in guidance because tariff policy remains uncertain.

Integra has identified $25 million to $30 million in cost savings initiatives that Knight said are fully implemented. The savings come from manufacturing efficiencies, yield improvements, operating model changes and lower third-party costs in SG&A.

Knight said the company is targeting operating cash flow of $200 million for the year, an improvement of $150 million, and free cash flow of about $140 million after negative free cash flow in the prior year. She cited improved EBITDA, working capital gains, lower EU MDR and Braintree startup spending, and normalized capital expenditures as drivers.

“It feels good to see evidence that the transformation is working,” Knight said in closing. “We still have a lot of work to do.”

About Integra LifeSciences NASDAQ: IART

Integra LifeSciences Corporation is a global medical technology company specializing in products and innovations for neurosurgery, regenerative medicine and reconstructive procedures. The company develops and markets surgical instruments, implants and advanced wound care solutions designed to support tissue repair and functional recovery. Its product portfolio includes collagen-based matrices, dural substitutes, hemostatic agents and specialized spinal and peripheral fixation devices.

Founded in 1989 and headquartered in Plainsboro, New Jersey, Integra has expanded its capabilities through targeted acquisitions and internal research efforts.

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