NuVasive Acquires Cervical Plate
BY JOHN MCCORMICK, JUNE 6, 2005
NuVasive (nasdaqNM: NUVA) announced on Monday that they are acquiring RSB Spine's dynamic cervical plate technology and a right of first refusal for additional products developed by RSB for about $14.5 million in cash and stock. In addition, RSB will receive annual milestone payments for the life of the acquired patent based on sales. Developed by Dr. Robert Bray of Los Angeles the RSB plate is currently named the "Smart Plate" and will be re-launched by NuVasive this month.
The heart of the technology is a "gradient locking mechanism" that enables the screws to be progressively resistant to axial compression. NuVasive's management has therefore dubbed the plate a "dynamic stabilization" product and talked about getting into dynamic stabilization generally on their confernce call. This new plate trumps NuVasive's cervical plate previously under development which was a fixed cervical plate that did not account for implant settling. Generally plates on the market today are fixed and, according to the NuVasive management, team their newly acquired product is produces better clinical results.
On the conference call, management noted that the RSB dynamic cervical plate has only been used in 250 cervical fusion procedures to date. Nevertheless, NuVasive's guidance for 2006 annual product revenue is for approximately $2 to $3 million so it looks like they aquired the plate for 5x - 7x next year's revenus. Hope they can make it up in 2007!
