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Orthopedic and Dental Industry News Complete Archive »

Orthopedic News Roundup 3-May-07 BY LAUREN UZDIENSKI, MAY 3, 2007

Earnings
Spine
Kyphon reported that worldwide revenues in 1Q:07 increased 40% to $128.1 million, which includes $18.1 million in X-STOP® Interspinous Process Decompression (IPD®) sales from the St. Francis acquisition. In the U.S., revenues increased 34% to $101.1 million, while total international revenues increased 70% to $27.0 million. Sales beat estimates of $126.4 million. Reported net loss was $22.6 million, or $0.50 per share; non-GAAP diluted earnings per share for the first quarter of 2007 were $0.20, missing estimates of $0.03 per share.

Alphatec reported that revenue in the first quarter of 2007 increased 8% to $19.6 million, compared to $18.0 million in the first quarter of 2006. Domestic revenues increased 15% due to continued strong surgeon demand. Gross profit for the first quarter of 2007 was $12.7 million with a gross margin of 64.8%, compared with a gross profit of $11.6 million with a gross margin of 64.4% in the first quarter of 2006. The improved margin was primarily due to the higher sales volume and improved margins in Asia. The net loss for the first quarter of 2007 was $2.7 million, or $(0.08) loss per share, compared to $5.9 million, or $(0.42) loss per share, in the first quarter of 2006. Non-GAAP earnings before interest, taxes, depreciation, amortization ("EBITDA"), were a positive $0.1 million for the first quarter 2007.

Extremity
Wright Medical announced 1Q:07 income of $3.2 million, or $0.09 per share, in line with analysts' estimates. Income increased 38% over 1Q;06's $2.3 million, or $0.07 per share. Revenues were up 9% to $94.3 million, missing estimates of $97.25 million.

Large Joint
Smith & Nephew reported 1Q:07 revenues of $744.0 million, beating estimates of $717.8 million. The company attributed sales growth to reconstruction devices such as the BHR. Net income fell to $91.0 million, or $0.09 per share. The decline in profit was attributed to the sale of BSN Medical, and SNN has initiated a program of cost-cutting measures to encourage profit growth in future quarters.

Exactech announced 1Q:07 revenue of $29.6 million, a 16% increase over 1Q:06. Net income for the quarter was $1.9 million, or $0.16 per diluted share, growth of 19% compared to the $1.6 million, or $0.14 per diluted share, reported in 1Q:06. Among individual product lines, knee systems grew 13% to $15.7 million, hip sales grew 44% to $5.5 million and biologics grew 4% to $3.5 million.

Arthrocare announced 1Q:07 revenue of $73.7 million, compared with $62.5 million in the comparable quarter. Income was $7.1 million, or $0.25 per share, beating estimates of $0.23 per share. The company attributed growth to the spine and sports medicine businesses, including the launch of the Opus non-metallic anchor.

Biologics
Anika Therapeutics reported revenue of $5.37 million for 1Q:07, fueled by a 159% increase in U.S. ORTHOVISC revenue. This helped to offset a decline in international sales, which the company attributed to a change in the Turkish government's reimbursement policy for drugs including ORTHOVISC®. Net income for 1Q:07 was $1.2 million, or $0.11 per diluted share.

Cryolife reported revenues of $24.5 million for 1Q:07, a 26% increase over the comparable quarter. 1Q:07 income was $1.4 million, or $0.04 per basic and fully diluted common share, compared to a net loss of ($1.8) million and ($0.08) per basic and fully diluted common share in 1Q:06. The quarter met analysts' estimates of $24.5 million and $0.04 per share. President and CEO Steven G. Anderson called the quarter the result of a "successful strategic review by the board of directors and management."

Dental
Dentsply reported 1Q:07 earnings of $58.5 million, or $0.38 per share, beating estimates of $0.36 per share. Income was also 17% higher than in 1Q:06. Additionally, the company saw revenue growth of 10% to $479.2 million, beating estimates of $454.7 million. The company attributed the growth to implant sales and orthodontic products, along with a stronger euro.

Nobel Biocare reported 1Q:07 income of EUR 43.9 million ($59.88 million), missing analysts' expectations of EUR 45.1 million. Revenues were EUR 163.5 million, an 20% increase that was attributed to rising demand in Asia; in North America, sales grew 10%. Analysts had anticipated EUR 167.9 million in revenues.

Other
Symmetry Medical Inc. reported 1Q:07 revenue of $67.5 million, a decrease of 3% from the comparable quarter, but sales beat estimates of $63.65. Income was $3.7 million, or $0.11 per diluted share, missing estimates of $0.15 per share. This compares to a net income of $8.4 million, or $0.24 per diluted share, for 1Q:06.

Regulatory
Paradigm Spine received the CE mark this week for its DSS dynamic stabilization system, a pedicle-screw based, implantable dynamic spine stabilization system indicated for degenerative disc disease of the lumbar spine.

M&A
Millenium Biologix entered into an agreement to sell their resorbable synthetic bone graft technology, Skelite™, to Medtronic of Canada Ltd. and Warsaw Orthopedic, Inc. Specific terms were not disclosed, but Millenium will receive a closing payment and may also subsequently receive certain milestone and contingent payments.

Product Introduction & Launch
Swiss-based Soplus recently launched its power tool system for large bone, reconstructive, trauma and sports surgery, the SO+ Universal. The system consists of a handpiece (available in battery, AC adapter and pneumatically-powered versions) and an extensive range of interchangeable attachments for procedures such as drilling, sawing, and reaming.

Clinical
At the Spine Arthroplasty Society meeting in Berlin this week, SpinalMotion reported long-term clinical trial data for the company's first 100 lumbar disc patients, all of whom were located outside the U.S. Results showed that 95% of disc implants were radiologically in the ideal position; post-operative hospitalization averaged 2.8 days; and all patients who were employed before surgery returned to work an average of 31 days after surgery. 88 of the patients had good or excellent results after two years, according to the published data. Additionally, IDE enrollment is 95% complete for the company's U.S. study on its cervical disc.

Intellectual Property
IsoTis received U.S. Patent No. 7,205,337 for applications of the company's Reverse Phase Medium (RPM) carrier technology. The patent covers the use of IsoTis' current RPM technology in combination with various DBM formulations, such as those used in the company's Accell technology. IsoTis has also received a notice of allowance for a patent application covering the use of the entire RPM formulation in combination with a complete range of synthetic and natural bone graft substitute compounds.

Operations
SpineVision announced a wholly-owned direct sales subsidiary in Singapore as well as efforts to expand its PediGuard™ product in Asia. PediGuard is described by the company as "the first and only FDA-cleared Class II device for real-time electronic detection of possible penetration outside the vertebral pedicle," and was recently used in Asia for the first time in a spine surgery procedure. SpineVision is now training local spine surgeons to use the device.

Appointments
Alongside announcements of a new efficiency drive to boost profits, Smith & Nephew CEO Chris O'Donnell will be stepping down. COO David Illingworth will replace him on June 30. Smith & Nephew anticipates that the efficiency drive will increase trading profit by $100 million by 2009 and at least $150 million by 2010.

Zimmer announced Ray Elliott's successor this week, former Group President, Global Businesses and Chief Legal Officer David Dvorak. Dvorak has been at Zimmer since 2001, and in his past role managed dental, spine, trauma and orthopedic surgical products. The new post became effective on Tuesday. James T. Crines was named Executive Vice President of Finance and Chief Financial Officer, replacing Sam Leno, who is moving to the CFO role at Boston Scientific.

Orthofix appointed Scott Dodson President of the Orthopedics Global Business Unit. Mr. Dodson joined Orthofix in 2006 as the Global Vice President of Marketing for Orthopedics and was previously Vice President of Marketing at the Endoscopy division of Boston Scientific.

Alphatec Holdings, Inc. announced that James R. Glynn was elected to Alphatec's board of directors. Mr. Glynn's appointment increases Alphatec's Board of Directors in size from five Directors to six, and increases the number of independent directors from two to three. Mr. Glynn will also serve as the Chairman of Alphatec's Audit Committee.

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