Orthopedics News Roundup 8-Feb-07
BY LAUREN UZDIENSKI, FEBRUARY 8, 2007
Earnings
Biologics
Regeneration Technologies, Inc. reported 4Q:06 revenues of $19.1 million, down 5% from $20.1 million in 4Q:05. The Company reported net loss of $6.7 million, compared to a net lossn of $1.7 million for 4Q:05. Net loss per diluted share in 4Q:06 was $0.22, compared to a net loss per diluted share of $0.06 for the 4Q:05. RTI Chairman, President and CEO Brian Hutchison calls the quarter "disappointing financially," but looks to significant negotiations, including an amended a distribution agreement with Medtronic Sofamor Danek and entered into new supply-related agreements with Tutogen and Cryolife, to boost revenues in coming quarters.
Orthovita's sales for 4Q:06 increased 38% to approximately $13.8 million, as compared to $10.0 million for 4Q:05. 4Q:06 sales included $0.7 million in Endoskeleton™ sales; the Endoskeleton product line, including intellectual property rights, inventory and the 510(k) clearance for the Endoskeleton TA vertebral body replacement device, will be sold for approximately $0.45 million in a transaction expected to occur on or before February 15, 2007.
Spine
Privately-held VERTEBRON announced a 50% increase in revenues in 2006 over 2005. President and CEO Bruce Khalili attributed the growth to the PSS Pedicle Screw System and the SSP Cervical Plating System, as well as an expanded distribution network.
Large Joints
Attributing the growth to sales of new products, Smith & Nephew reported 4Q:06 revenues of $771 million, up 11% from 4Q:05. Reconstruction revenues were $251 million, a 15% increase over 4Q:05. Knee revenue increased by 12%, and hip revenues were up by 19% over 4Q:05. In the category of orthopedic trauma, fixation product revenues grew by 5% in the U.S. and by 16% outside the U.S.
Other
Symmetry Medical reported 4Q:06 revenue of $58.5 million, down 6.6% from 4Q:05. 4Q revenue includes revenue from recent acqusitions Riley Medical ($5.6 million) and Everest Metal ($1.8 million.) Gross margin reported was 24.3%, a decrease of 440 basis points from 4Q:05. Net income for the quarter was $5.1 million, or $0.15 per diluted share, compared to a net income of $7.3 million, or $0.21 per diluted share for 4Q:05. The Company attributes the 4Q:06 losses to overall slower growth industry-wide, but also to lower utilization of the Company's fixed costs, as well as sales reductions which were more pronounced in the higher margin products.
CONMED announed 4Q:06 4Q:06 sales of $169.9 million, an increase of 10.9% over 4Q:05's $153.2 million. In individual product categories, arthroscopy sales grew to $59.9 million, a 14.3% increase over 4Q:05. Powered Surgical Instruments grew 13.7%, with $36.5 million in sales for 4Q:06, compared to $32.1 million in 4Q:05.
M&A
A regulatory filing from Biomet shows that Smith & Nephew offered $45 a share for Biomet, exceeding the $44 per share purchase price offered by the private equity consortium that acquired the company. The filing notes risks associated with Smith & Nephew's bid that were not present in the consortium’s bid, including that Smith & Nephew may become an acquisition target.
Regulatory
Orthovita confirmed this week that they'll pursue a 510(k) in marketing their Cortoss® Bone Augmentation Material in the U.S. With the ongoing pivotal study, it appeared the Company could have pursued a PMA application. The study is evaluating the use of Cortoss in verteboplasty, as compared to polymethylmethacrylate (PMMA) bone cement.
Legal
A U.S. Appeals Court affirmed this week that BrainLAB's VectorVision, Kolibri, BrainSuite and ExacTrac products do not infringe four Medtronic patents. BrainLAB is a German designer and manufacturer of image-guided surgery and radiotherapy products.
Funding
MAKO Surgical closed on a $30.0 million Series C private equity financing, which was led by funds affiliated with and advised by Tudor Investment Corporation. The financing also included Ziegler Meditech Equity Partners, as well as MAKO's existing stockholders, including The Exxel Group, MDS Capital Corp., Aperture Venture Partners, Ivy Healthcare Capital, L.P. and Sycamore Ventures. The capital will enable MAKO to expand the clinical presence of MAKOplasty™ therapy for early-stage knee osteoarthritis and support the next generation of MAKO proprietary technology and implants.
Private Placements
Paradigm Spine completed a $13.9 million Series D private placement. Proceeds will support international expansion of the coflex™ technology, fund the Company's U.S. clinical trials of the coflex device and the Orthobiom™ system and to expand Paradigm Spine's technology portfolio through organic product development or further acquisitions of spine non-fusion technologies and intellectual property. The funding was led by an entity affiliated with HealthCor Management, LP, a New York-based investment management company with a healthcare and life sciences focus.
License Agreements
Biomet Sports Medicine has licensed more than 45 patents with applications in sports medicine and arthroscopy through an agreement with Marc Tec. Biomet will also be working with Peter Bonutti, M.D. to develop new products in the areas of meniscal repair and suture anchors.
Product Introduction and Update
ORTHOsoft plans to introduce the Navitracker™, a Computer-Assisted Surgery tracking device at AAOS next week. The device is intended for hip, knee and spine surgeries.
Clinical
Kuros launched a Phase II European clinical trial of a bone graft substitute in tibial fractures. The bioactive bone graft substitute is a combination of Kuros' biologics technology with Baxter's fibrin-based biomatrix, TISSEEL Fibrin Sealant, and it is injected directly into the fracture, ideally to promote bone growth. Kuros and Baxter entered into a license and collaboration agreement in 2005.
Appointment
Effective Feb. 8th, Orthovita's Chief Financial Officer Joseph M. Paiva will be appointed the Company's Chief Business Officer. Assuming the role of CFO will be Albert J. Pavucek Jr., Vice President of Finance and Controller.
Miscellaneous
DJO has postponed its 4Q:06 earnings release, originally scheduled for today. The Company said the delay would allow them to complete an audit of 2006 financials. No new date was given for the earnings announcement.
