Musculoskeletal News Roundup 8-Nov-07
BY LAUREN UZDIENSKI, NOVEMBER 8, 2007
Earnings
Anika reported 3Q:07 product revenues of $7.28 million, up from $5.49 million in 3Q:06. The company attributed the sales growth to strong domestic and international sales of ORTHOVISC®. Net income for 3Q:07 was $1.8 million, or $0.16 per diluted share, up from $1.33 million, or $0.12 per diluted share, in 3Q:06. Domestic ORTHOVISC revenues rose 67% in 3Q:07, which the company says was fueled by the unique reimbursement code assigned to ORTHOVISC in December 2006. ORTHOVISC revenues were up 70% internationally attributable to sales increases to the company's distribution partners in Turkey, Canada, Austria and Germany.
Orthofix reported third quarter revenues of $121.1 million, missing estimates by $1.65 million while reflecting an increase of 45% over 3Q:06. Adjusted net income was $7.9 million, or $0.48 per share, beating estimates by $0.01. 3Q:07 spine revenue grew 109% over 3Q:06, to $61.3 million. Implant and biologic revenues from Blackstone were $29.6 million, up 41% over 3Q:06. Revenue from Orthofix’s orthopedic business grew 12%, to $26.3 million; Orthofix’s sports medicine revenues grew 14% over 3Q:06, to $22.1 million.
OrthoLogic reported a net loss of $2.4 million, or $0.06 per share, for 3Q:07, compared to a net loss of $5.8 million or $0.14 per share for 3Q:06. A decline in the net loss so far this year was attributed to the following: the $8.5 million purchased in-process research and development costs in 2006, a decrease of $1.7 million in non-cash stock compensation expense, reduced costs in 2007 reflecting management changes and staff reductions which occurred in the first half of 2006, a decline in clinical costs related to our fracture repair Phase 3 and Phase 2b clinical trials, which were substantially completed as of December 31, 2006, a Chrysalin product platform patent impairment loss of $2.1 million recorded in 2006, and the recognition in 2006 of income tax expense related to the recording of a valuation allowance of $1.1 million for a deferred tax asset related to a Alternative Minimum Tax credit carryover.
Orthovita reported 3Q:07 product sales of $14.5 million, an increase of 31% over the year-ago period. Revenues beat estimates by $0.16 million. Sales growth was attributed to increased U.S. sales of VITOSS® FOAM and VITAGEL®. The adjusted net loss per share for 3Q:07 was $0.03, beating estimates of a loss of $0.07. Excluding certain charges, 3Q:07 net loss decreased to $2.3 million, or $0.03 per share, from $3.7 million in 3Q:06. Earnings beat estimates by $0.04.
Ossur reported 3Q:07 net sales of $82.3 million, up 31% from Q3:06. Net income was $2.2 million, down from $5.4 million in 3Q:06. President and CEO Jon Sigurdsson said the company was "satisfied" with the quarter's results and that they are seeing strong sales in Europe and beginning to see results from their restructuring of bracing and support distribution in the Americas. The company said there is double-digit growth in prosthetics sales and a "positive trend" in bracing and support sales.
Osteotech reported 3Q:07 revenue of $25.7 million, in line with estimates and up from $23.4 million in the year-ago period. 3Q:07 sales from Osteotech's core DBM and Hybrid/Synthetic Segments were $17.6 million, up 28% from the year-ago period. Net income for 3Q:07 was $1.6 million, or $.09 diluted earnings per share, beating estimates by $0.06 and comparing to net income of $0.2 million, or $.01 diluted earnings per share, in 3Q:06.
Symmetry Medical announced preliminary 3Q:07 sales of $76.5 million. These preliminary revenues beat consensus estimates of $72.9 million. The company adds that its Audit Committee's review of accounting irregularities at its Sheffield U.K. facility is continuing.
Wright Medical reported 3Q:07 net revenues of $91.4 million, up 16% over 3Q:06. 3Q:07 adjusted net income was up 24% to $6.1 million, or $0.17 per share. The company attributed revenue growth to sales from the international business and "very good" results domestically, specifically from the CHARLOTTE™ Foot and Ankle System and business expansion from acquisitions of the Darco line of foot and ankle reconstruction products and the R&R Medical external fixation line of products. Additionally, the company said the PRO-DENSE® Injectable Regenerative Graft bolstered the performance of the biologics segment. Finally, the company said that the large joint reconstructive franchise reported 10% sales growth both domestically and worldwide.
Regulatory
Arthro Kinetics received 510(k) clearance for its VESALIUS® radio frequency generator and spinal probe system for soft tissue ablation. The company says the system allows the surgeon to "cut, ablate and seal soft tissue at lower temperatures, minimizing the potential for bleeding, scarring and other damage to surrounding tissue."
Wright Medical Group announced regulatory clearance for its CONSERVE® Plus Hip Resurfacing System by Japan’s Ministry of Health, Labor and Welfare. Wright describes the product as a "conservative, anatomically-focused surgical alternative to traditional hip replacement" and adds that bringing key products to the Japanese market has been a corporate goal.
M&A
DePuy Spine announced that they would acquire the Disc-O-Tech's Confidence line of products, of which Kyphon was required to divest as a regulatory condition of the company's merger with Medtronic. DePuy Spine said they see the acquisition as a "significant growth opportunity" following a challenging 3Q:07. The company announced recently that third quarter revenues were down 1% in the US, up 8% overall. The Confidence assets encompass a cement delivery system and PMMA bone cement in addition to a pipeline of VCF treatments in development.
Hamburg-based BSN medical acquired FLA Orthopedics, Inc. from a private equity firm, the Riverside Company, for an undisclosed sum. FLA Orthopedics manufactures and distributes orthopedic soft goods and bracing products.
Medtronic completed their acqusition of Kyphon earlier than expected; at the time the merger was announced, Medtronic anticipated a 1Q:08 closing. Stockholders will receive $71.00 per share in cash for each share of Kyphon common stock they own. The total value of the transaction, including the payment of Kyphon debt, is approximately $4.2 billion.
Zimmer Holdings, Inc. announced completion of its acquisition of ORTHOsoft, Inc. Zimmer says the company has acquired 92.36% of the total number of Shares outstanding (other than those held by Zimmer or its affiliates at the time of the offer), and will mail a Notice of Compulsory Acquisition to all shareholders of ORTHOsoft whose shares have not been deposited. Additionally, Zimmer will cause ORTHOsoft to cease to be a reporting issuer under Canadian Securities legislation and apply to delist the Shares from the TSX-Venture.
Reimbursement
LDR announced that the French government will reimburse surgeons using the Mobidisc® artificial lumbar disc. The company adds that Mobidisc will join ProDisc-L and CHARITE® as the only lumbar discs that the French government has approved for reimbursement.
Product Update
Advanced Bio-Surfaces announced that its OrthoGlide Medial Knee Implant has been implanted in more than 300 patients in the United States. The press release also notes that on November 10th, data from a clinical study on OrthoGlide will be presented at the American College of Rheumatology's annual meeting in Boston.
Agreements
AlloSource entered into a licensing agreement with Keratec Limited of New Zealand whereby the companies will jointly develop a next-generation DBM putty utilizing Keratec’s Keragraft technology. Development and FDA clearance are expected to take six to nine months, and AlloSource plans to have the new product available in Q3:08.
GPOs Novation, LLC and the University HealthSystem Consortium (UHC) announced 20 new multi-source agreements for a range of hip, knee and shoulder products from companies including Encore, Smith & Nephew, Stryker and Zimmer. The press release says the new agreements could provide as much as $188 million in total savings for members and makes Novation's hip and knee portfolio the largest in the industry. The new portfolio launched November 1.
SpineSmith Partners, LP acquired rights in spine for Tissue Genesis, Inc.'s adipose tissue-derived cell technology, including the use of Tissue Genesis' TGI 100™ cell isolation kits and TGI 1000™ automated cell isolation systems. The kits allow a surgeon to use autologous cells for the treatment of some spinal conditions. Under the terms of the agreement, SpineSmith Partners has licensed the rights to all of Tissue Genesis' patents and technologies for use in the diagnosis and treatment of the human spine. The company says the stem cell therapy will be delivered to the patient via osteobiologic carriers currently on the market and under development. Financial terms were not disclosed.
Operational
NuVasive announced plans to relocate to a new, campus-style headquarters in San Diego during the first half of 2008. The company says the new space will "provide NuVasive with increased infrastructure to accommodate its rapidly growing workforce, support enhanced training and testing facilities and provide a foundation for expanded clinical use of XLIF®, broadened product offerings, and other strategic growth initiatives."
Appointment
Orthofix International appointed Timothy M. Adams Chief Financial Officer effective Nov. 19. Previously, Adams was CFO at Cytyc Corp., a medical device and diagnostics company. He succeeds Tom Hein, who will remain Orthofix as Executive Vice President of Finance.
