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Orthopedic and Dental Industry News Complete Archive »

Musculoskeletal News Roundup 7-May-15 BY MATTHEW JAFFE, MAY 7, 2015

Earnings
Positive progress made towards Alphatec's corporate strategic objectives: Refocus product portfolio and R&D pipeline; Expand global commercial participation; Transform manufacturing and distribution operations. Consolidated net revenues for the first quarter of 2015 were $48.6 million as reported, down 1.1% compared to $49.2 million reported for the first quarter of 2014, or up 5.4% on a constant currency basis due to the strengthening of the U.S. Dollar. International net revenues for the first quarter of 2015 were $18.2 million, up 6.2% compared to $17.1 million for the first quarter of 2014, or up 24.6% on a constant currency basis. Consolidated gross profit and gross margin for the first quarter of 2015 were $32.9 million and 67.7%, respectively, compared to $33.3 million and 67.7%, respectively, for the first quarter of 2014. Gross profit declined 1.1% from the first quarter of 2014 primarily due to lower U.S. sales volume. Gross margin was unchanged compared to prior year as margin improvements realized as a result of continued operational diligence were offset by unfavorable variation in regional and product mix.

Bacterin reported financial results for 1Q:15. Total revenue was $9.5 million in 1Q:15, slightly beating estimates, and representing an increase of 7% compared to $8.9 million in 1Q:14. Gross margin for 1Q:15 increased to 63.5%, from 61.7% in 1Q:14. EBITDA was ($1.3) million in 1Q:15, decreasing compared to ($0.7) million in 1Q:14. All growth rates are on a reported basis.

Globus Medical reported financial results for 1Q:15. Net revenue was $131.6 million in 1Q:15, beating consensus estimates by 7% and representing an increase of 15% compared to $114.2 million in 1Q:14. Gross margin for 1Q:15 decreased to 75.6%, from 77.8% in 1Q:14. Adjusted EBITDA was $46.3 million in 1Q:15, increasing 10% from $42.1 million in 1Q:14. Adjusted EBITDA margin decreased slightly to 35.2% in 1Q:15 from 36.8% in 1Q:14. All growth rates are on a reported basis.

Greatbatch reported financial results for 1Q:15. Total revenue was $161.3 million in 1Q:15, missing consensus estimates by 1% and representing a decrease of 7% compared to $174.3 million in 1Q:14. Gross margin for 1Q:15 decreased to 32.5%, from 33.1% in 1Q:14. Adjusted EBITDA was $26.4 million in 1Q:15, decreasing from $31.6 million in 1Q:14. Adjusted EBITDA margin decreased to 16.4% in 1Q:15 from 18.1% in 1Q:14. The company's Orthopedic segment reported product line sales of $39.0 million in 1Q:15, representing an increase of 18% compared to $36.1 million in 1Q:14. All growth rates are on an organic constant currency basis.

Integra LifeSciences reported 1Q:15 financial results. Total revenue was $233.7 million in 1Q:15, beating consensus estimates by 2% and representing a increase of 7% compared to $215.1 million in 1Q:14. Gross margin for 1Q:15 increased to 62.9%, from 61.7% in 1Q:14. Adjusted EBITDA was $47.6 million in 1Q:15, increasing 29% on a reported basis from $36.9 million in 1Q:14. Adjusted EBITDA margin increased to 20.4% in 1Q:15 from 17.2% in 1Q:14. The company's segments grew on a reported basis by: Specialty Surgical Solutions +10%; Orthopedic and Tissue Technologies +12%; Spine (3%) in 1Q:15. All growth rates are on a constant currency basis unless stated otherwise.

NuVasive reported financial results for 1Q:15. Revenue was $192.4 million in 1Q:15, beating consensus estimates by 2% and representing an increase of 10% compared to $177.5 million in 1Q:14. Gross margin for 1Q:15 increased to 76.3%, from 75.6% in 1Q:14. All growth rates are on a constant currency basis.

Smith & Nephew reported financial results for 1Q:15. Revenue was $1,104 million in 1Q:15, missing consensus estimates by 2% and representing an increase of 3% compared to $1,073 million in 1Q:14. The company's segments grew by: Sports Medicine, Trauma & Other +5%; Reconstruction +1%; Advanced Wound Management +1%. The company grew regionally by: US +1%; Other Established Markets (2%); Emerging Markets +22%. All growth rates are on a constant currency basis.

Tornier reported financial results for 1Q:15. Revenue was $88.1 million in 1Q:15, missing consensus estimates by 2% and representing an increase of 6% compared to $89.0 million in 1Q:14. Adjusted EBITDA increased to $10.4 million in 1Q:15 from $9.5 million in 1Q:14. Adjusted EBITDA margin increased to 11.8% in 1Q:15 from 10.7% in 1Q:14. The company's segments grew by: Total Extremities +9% and Large Joints & Other (6%) in 1Q:15. All growth rates are on a constant currency basis.

Zimmer reported financial results for 1Q:15. Net revenue was $1.13 billion in 1Q:15, missing consensus estimates by 1% and representing an increase of 5% compared to $1.16 billion in 1Q:14. Gross margin for 1Q:15 increased to 75.4%, from 73.9% in 1Q:14. The company's segments grew at: Reconstructive +5%, Knees +6%, Hips +3%, Extremities +5%, Dental (3%), Trauma +7%, Spine +7% and Surgical & Other +3% respectively in 1Q:15. The company's global segments grew at: Americas +2%, Europe +9% and Asia-Pacific +7% in 1Q:15. All growth rates are on a constant currency basis.

M&A
Greatbatch proposed a tax-free spin-off of Algostim, LLC, a subsidiary of the company's QiG Group, creating a new publicly traded company. Algostim was established in 2008 to in order to build a broad-based neurostimulation platform for Greatbatch. Algostim's first application is the Algovita Spinal Cord Stimulation (SCS) system, intended to treat chronic intractable pain of the patient's trunk and/or limbs. The spin-off is expected to be completed by the end of 2015.

Regulatory
Ellipse Technologies received FDA 510(k) clearance to market its external remote controller (ERC 2) for use with the MAGEC (MAGnetic Expansion Control) Spinal Bracing and Distraction System. The MAGEC spinal rods http://ellipse-tech.com/magec-international-spinal-deformity-correction/ are utilized in the treatment of early onset scoliosis. Magnets outside the body contained in the ERC communicate with magnets in the implanted MAGEC rod to adjust its length without the need of additional surgeries.

Medtronic received FDA 510(k) clearance to market its ZEVO Anterior Cervical Plate System. The ZEVO system features shorter plating options coupled with hyper-screw angulations, allowing the surgeon to implant shorter plates, while securing further from the adjacent disc.

SpinalFrontier received FDA 510(k) clearance to market its Sacroiliac Joint Fusion (SIJ Fuse) system. The device can be utilized in both lateral and alternate posterior approaches. SIJ Fuse is the first device approved for the posterior approach, which minimizes tissue disruption and nerve injury, and maximizes bone fixation in comparison with the traditional approach.

Product Introduction & Update
MEDICREA launched in the U.S. its LigaPASS 2.0 band system for spinal posterior thoraco-lumbar fixation, indicated for idiopathic and neuromuscular scoliosis patients. The updated LigaPASS system features an extended range of connectors, a band with a narrower malleable tip and a dual-band option, which allows surgeons to pass simultaneously two bands underneath the lamina.

NuVasive launched its Integrated Global Alignment (iGA) platform, a proprietary, procedurally integrated, digital platform of specialized products designed to help surgeons achieve more precise spinal column alignment, which can lead to positive patient outcomes.

Appointments
Integra LifeSciences appointed Keith Valentine as Chief Executive Officer (CEO) of SeaSpine. Prior to SeaSpine, Mr. Valentine served as President and Chief Operating Officer of NuVasive. The company appointed John Bostjancic as Chief Financial Officer (CFO) of SeaSpine. Mr. Bostjancic has been acting CFO of SeaSpine since December 2014, and prior to SeaSpine served as a Senior Vice President of Global Supply Chain at Integra.

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