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Orthopedic and Dental Industry News Complete Archive »

Orthopedic News Roundup 30-Nov-06 BY LAUREN UZDIENSKI, NOVEMBER 30, 2006

Earnings
ORTHOsoft reported 3Q:06 revenues of CAN $3.8 million (US $3.3 million), up 59% from CAN $2.4 million (US $2.1 million) in 3Q:05. ORTHOsoft manufactures computer aided orthopedic surgery devices, and they attribute the 3Q:06 growth to increased navigation systems sales and recurring revenues. 3Q:06 hardware revenue increased 92% to CAN $2.07 million from CAN $1.08 million during 3Q:05. Software applications revenue was CAN $0.94 million, a 127% increase from CAN $0.42 million during the 3Q:05. Recurring revenue increased 238% in 3Q:06, to CAN $0.70 million from CAN $0.21 million in 3Q:05. Net loss including non-cash stock compensation expense was $0.6 million, or $0.01 per share. Excluding the effect of stock compensation expenses, 3Q:06 net loss was $0.4 million, or $0.01 per share, the same as 3Q:05.

BioSyntech reported a loss for the quarter and six months ending September 30, 2006. The company recorded revenues of $3,393 for the second quarter, compared to $821 in the previous year. Research and development (R&D) expenses amounted to $1.1 million compared to $.8 million in the previous year. The increase in R&D expenses was mainly due to the hiring of new clinical development employees and to the increase in expenses incurred for the BST-CarGel® multi-center clinical trial. The loss for the second quarter was $2.0 million ($0.02 per share) compared to $1.6 million ($0.04 per share) the previous year.

Intellectual Property
IsoTis received U.S. Patent 7,132,110 to cover its Accell® technology. The Accell® natural human BMP (bone morphogenetic protein) technology forms the basis of IsoTis' Accell® bone graft substitute product platform. The Accell® products represent two thirds of IsoTis' U.S. sales and around half of its global sales.

Regulatory
Life Spine announced FDA 510(k) clearance to market Kinetic®, an internally dynamized anterior cervical plating system. Life Spine CEO Michael Butler praises the flexibility of the Kinetic, which joins the NEO™ anterior cervical plating system, Pilot® posterior plate, ARX® pedicle screw system and Plateau™ spacers as Life Spine devices recently given market clearance.

LDR received FDA 510(k) clearance to market its LP Multiaxial Screw, part of the Easyspine® Pedicle Screw System. The LP Screw performs a spondylolisthesis reduction in two stages with minimal instrumentation, and CEO Christophe Lavigne calls the product an exciting addition to their line of fusion products.

Service Agreement
Novation awarded dual-source contracts for trauma products to Smith & Nephew and Synthes, effective Dec. 1, 2006 through Nov. 30, 2009. The agreements include internal (plates, screws and nail systems) and external (AO Bilateral Fixators, Jet-X Fixators, Circular Hybrid Rings) fixation products.

Osteotech entered into a license agreement with Bacterin International Inc., a maker of anti-microbial coatings for medical devices. Bacterin will receive a nonexclusive license to Osteotech's U.S. Patents 5,284,655 and 5,290,558 which cover demineralized bone powder compositions, supporting Osteotech's Grafton® DBM line of tissue grafts.

Financing
St. Francis Medical Technologies filed for an initial public offering of up to $86.25 million in common shares. Terms were not specified in the SEC filing. JP Morgan, Piper Jaffray and Thomas Wiesel Partners LLC have been identified as underwriters.

Orthovita plans to raise $23 million from an offering of common stock. The proceeds will be used to buy royalty rights for the Vitagel™ surgical hemostat and Cellpaker collection device products, to fund working capital and for other purposes. On Wednesday, underwriters bought about 1.1 million shares at a price of $3.25 each. Net proceeds from the over-allotment purchase will total $3.4 million, boosting total proceeds to about $26.5 million.

Legal
Medtronic has won a patent infringement case brought by DePuy Spine and Biedermann Motech concerning Medtronic's largest line of pedicle screws. A U.S. Court of Appeals affirmed the decision of a lower court that Medtronic's CD HORIZON® LEGACY™, M8 and M10 multi axial screws do not infringe DePuy's 5,207,678 patent. The Court affirmed that VERTEX® screws do not literally infringe but sent the case to a lower court for further proceedings. Additionally, the Court affirmed that the CD HORIZON MAS products, no longer sold in the U.S., did infringe upon the patent.

Operations
Medtronic broke ground this week on a new R&D facility in Memphis, Tennessee. The $90 million expansion project is expected to create 600 new jobs within the Spinal & Biologic Division, with Congressman-elect Steve Cohen, D-Memphis, praising Medtronic for creating "high-paid, creative jobs." Medtronic's manufacturing is based in Warsaw, Indiana.

Clinical
Results from the first arm of the highly-anticipated SPORT Trial were published in JAMA last week. The randomized trial assigned 501 patients to either receive surgery or a menu of non-operative treatments. Both groups turned out having substantial and significant improvements, but nonadherence to randomly assigned treatment biases the study and conclusions are not warranted when reviewing the data from the original selection or "intent-to-treat" viewpoint. On an "as-treated" basis researchers found that outcomes for the patients treated with surgery showed "strong, statistically significant advantages" when compared to non-operative treatments, however.

A Medicare Coverage Advisory Committee (MCAC) will convene on November 30th to discuss evidence relating to indications for spinal fusion for the treatment of low back pain secondary to degenerative disc disease, clinical outcomes (including adverse events), the persistence of outcomes over time, outcome measurement tools and outcomes related to different surgical spinal fusion procedures, as well as the generalizability of this evidence to the Medicare population.

Genzyme announced a new study demonstrating that over 26 weeks, single-dose Synvisc achieved a statistically significant improvement in pain from osteoarthritis of the knee compared with placebo. Currently, Synvisc is delivered in three doses, and the single-dose regimen would reduce the cost and burden of treatment. Genzyme is fighting a CMS ruling that as of January 2007, all viscosupplementation products will share a reimbursement code; this coding change means that reimbursement for viscosupplementation treatments will be based on number of injections, incentivizing physicians to use multiple-injection regimens.

Product Introduction & Update
Anulex announced the first implantation of the new Xclose™ Tissue Repair System. The procedure was performed by Kenneth Yonemura, M.D., a neurosurgeon at the University of Utah Medical Center in Salt Lake City, Utah. The product received U.S. FDA 510(k) clearance and represents the Company's second product offering in its soft tissue repair product family.

Miscellaneous
Ray Elliott plans to retire as President and Chief Executive Officer of Zimmer in the first half of 2007. Mr. Elliott will remain as Chairman for at least one year from last week's announcement. Elliott served as President of Zimmer from 1997 to 2001 and has served as Chairman, President and Chief Executive Officer of Zimmer since the Company went public in 2001. The company has retained a global executive recruiting firm to assist with the search for a successor.

Millennium Research Group (MRG) predicts joints and implants designed specifically for women will boost the knee implant market, which expected to reach $5 billion by 2011. MRG has conducted a detailed analysis of the US large-joint implant market, concluding that the introduction and promotion of gender-specific knees will drive revenue growth over the next five years.

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