Wright ends an up-and-down year on a high note

Last year, Wright Medical ($WMGI) was alternately a scandal-plagued orthopedic outfit, a promising regenerative medicine company, an FDA doghouse resident and an in-the-making extremities specialist. But despite all that turmoil, the Memphis med tech outfit's shares finished out the year at a 52-week high, a sign of confidence in its oft-redrawn mission statement and its odds of being acquired.

Wright opened at just above $30 on the first trading day of 2014, 42% ahead of where it was at the onset of 2013, a year riddled with setbacks, deals and opportunities for the company.

The year began with Wright crawling out from under a 2010 kickback scandal that virtually emptied its boardroom and cost millions in settlement dollars. Amid slumping profits, the company struck two deals to deeply alter its model, first paying $190 million for BioMimetic Therapeutics and the Augment Bone Graft, and then selling off its own hip and knee segment for $290 million. After years of declining sales, Wright believed it had found a new and profitable identity as a leaner outfit with a soon-to-be-approved implant and a focus on foot and ankle technology. Its shares leapt as high as $28.22.

But much of that optimism faded in March when the FDA rejected Augment, taking issue with the patient population in the device's pivotal study and demanding Wright undergo more costly and time-consuming trials. The news stirred questions as to whether Wright could afford to carry Augment to the finish line, and the company's shares plummeted more than 10%.

Undaunted, CEO Robert Palmisano stayed committed to Wright's new identity, paying $80 million in October for a French orthopedic extremities company with eyes on expanding his business' share of the European market. That same month, the FDA agreed to reconsider its ruling on Augment, planning to convene a dispute resolution panel and take another look at Wright's application.

Now, Wright is trading at a year-long high thanks to renewed hopes for its latest business model and some speculation that it could be next in line for some M&A. As a specialist in the reliably growing extremities space, Wright is an attractive target for large-scale orthopedics companies, analysts say, and, after Stryker's ($SYK) sky-high valuation of Mako in a $1.7 billion deal, investors seem to think the company might fetch an attractive premium.

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