Orthovita reports 59% Sales Growth; 3% Increase in Operating Loss to $2.5 million
BY ROBIN R. YOUNG CFA, MAY 10, 2004
VITOSS sales rocketed in the quarter, beating our expectations and demonstrating that Orthovita is becoming one of the premier calcium based suppliers in orthopedics. VITOSS (a resorbable beta tri-calcium material) sales reached an estimated $4.5 million (the actual number included sales of Imbibe, Orthovita's bone marrow aspirate system) and represented over 80% of the company's sales. At the current rate, CEO Tony Koblish is confident that 2004 revenues will grow by approximately 44% to 50% over 2003 levels. This is higher than previous guidance, which was a 40% to 48% rate of revenue growth. Koblish's new outlook is largely based on the favorable market response to recently approved VITOSS Scaffold FOAM platform.
Losses, however, remain high at $2.5 million for the quarter. With over $16 million in cash and no debt, the company's investment in both product and marketing (marketing expense jumped from $2.8 million last year to $4.3 million in the just completed quarter) is financially tolerable.
In the pipeline are two significantly impressive products; CORTOSS, a high-strength, self-setting composite material engineered specifically to mimic the strength characteristics of human cortical bone. Orthovita is conducting U.S. clinical studies of CORTOSS for use in vertebral augmentation procedures. In addition, the material is the subject of post-marketing human clinical studies for use in hip compression screw augmentation. RHAKOSS is a preformed composite that mimics the natural dual cortical-cancellous composition of human bone, providing high strength while also allowing for the in growth of host bone to address the vertebral interbody fusion and spinal reconstruction markets. Management is working towards a CE Mark for its use as an interbody fusion device. That's right, a calcium based composite material for interbody fusion.
