Interpore's 2003 Spine Sales +21%, but Weak Biologics Undermine Full Year Results
BY ROBIN R. YOUNG CFA, FEBRUARY 23, 2004
Interpore Cross sold $44.6 million of spinal implants (not counting bone void fill) in 2003, a 21% increase over its level in 2002. Industry-wide, we estimate spinal implant sales rose 29% to $2.8 billion in 2003. Interpore's market share, we estimate, declined slightly from 1.7% of the market to 1.6% in 2003. Interpore's sales of such biologic products as coral based Pro-Osteon, its line of DBM and the AGF system of platelet concentrators, “grew” 3% to $18.7 million in 2003. Biologics, which were Interpore's original product category, have been posting flat to down revenues since 2000, when this category generated over $20 million in revenues.
In total, Interpore's three lines of business (Spinal Implants, Biologics and MIS/AOM) generated a 2003 sales of $70.7 million, up just 20% from last year's levels. Interpore's full year sales include $3.2 million in royalty revenue. Netting that out, pure product sales grew just 15% in 2003.
Reported income was strong at $14.9 million, up 257% from 2002's $3.3 million. But that included the effects of a $15 million patent litigation payment from DePuy Spine. Excluding that, reported income would have been closer to $5.3 million, a 27% increase over 2002.
For 2004, Interpore's management hopes to bring to market a series of important innovations including a major upgrade to their venerable Synergy line of implants, the second generation autologous growth factor products and a new version of its innovative GEO line of intervertebral body implants. Most interesting will be to watch the AOM line of vertebral compression fracture treatment systems. Thoroughly trounced in the market place by industry leader Kyphon, AOM showed intriguing signs of life in this past December quarter. AOM sales rose 20% sequentially and 27% year over year to a still barely consequential $1.2 million rate in the December quarter.
