Musculoskeletal News Roundup 15-Nov-07
BY LAUREN UZDIENSKI, NOVEMBER 15, 2007
Earnings
Artimplant announced 3Q:07 revenue of SEK 2.6 million, up from SEK 0.9 million in the year-ago period. 3Q:07 net loss was SEK 3.6 million, down from SEK 10.4 in 3Q:06. Earnings per share, including a non-recurring item, amounted to SEK -0.19, improved from SEK -0.79 in the year-ago period; no adjusted EPS was announced. Highlights for the quarter include FDA clearance for the Artelon® Tissue Reinforcement for indications including all tendons of the rotator cuff and as well as new indications of knee, upper arm, front thigh muscle and heel; Kauko Haapasaari was appointed head of marketing; and more than 5,000 patients have been treated with Artelon implants since the launch.
BioMimetic Therapeutics, Inc. announced a 3Q:07 net loss of $5.6 million or $0.31 per share, beating estimates of $0.38 per share and compared to a net loss of $4.2 million, or $0.27 per share, for 3Q:06. 3Q:07 revenues were $1.7 million, which includes product sales of GEM 21S® to its marketing partner Osteohealth Company, sublicense fee income and royalty income. This beat estimates by $0.5 million and represents an increase from total revenues of $0.7 million for the year-ago period. The company has seven pre-pivotal and pivotal orthopedic studies of its GEM OS1 and GEM OS2 products ongoing in the United States, Canada and Europe.
Langer, Inc. reported 3Q:07 net sales of approximately $17.41 million, an increase of 92% over the year-ago period. Revenue from acquisitions Twincraft and Regal contributed net sales of approximately $7.01 million and $1.08 million, respectively, during the quarter. Langer reported a net loss of approximately $0.84 million for 3Q:07, or $.07 per share on a fully diluted basis, compared to a net loss of approximately $0.55 million, or $.06 per share on a fully diluted basis in 3Q:06. The net loss was attributed to financial consulting fees and the amortization of identifiable intangible assets of Twincraft.
Integra LifeSciences Holdings Corporation reported 3Q:07 revenues of $135.0 million, missing average estimates by $4.06 million. Revenues increased 16% over the year-ago period. 3Q:07 adjusted net income was $11.3 million, or $0.39 per diluted share, missing estimates by $0.05 and comparing to $11.1 million, or $0.36 per diluted share, in 3Q:06. In the Neurosurgical and Orthopedic Implants category, bone growth products, the DuraGen® family of products and extremity reconstruction implants led revenue growth.
Osiris Therapeutics reported 3Q:07 sales of Osteocel of $4.0 million, up 60% over 3Q:06. Other revenues in 3Q:07 were $0.3 million, unchanged from 3Q:06. Net loss was $10.4 million, compared to a net loss of $15.6 million for 3Q:06, which included charges related to the company's IPO. The 3Q:07 loss was attributed to ongoing clinical trials.
TranS1 reported 3Q:07 revenues of $4.3 million, a 217% increase over 3Q:06. 3Q:07 adjusted net loss was $0.11 per common share. The company also reported that 469 procedures were performed with TranS1 products during the quarter; the company markets two single-level fusion products in the U.S. based on a minimally invasive surgical approach.
M&A
Regeneration Technologies and Tutogen announced plans to merge this week. The transaction is valued at approximately $263 million, or $12.86 per share. According to the press release, synergies include $5-$6 million of identified cost savings when fully realized and potential revenue enhancement opportunities. In the past, RTI has focused on allograft hard tissue for orthopedics, while Tutogen has primarily sold xenograft soft tissue for non-orthopedic applications.
Synthes plans to purchase N Spine for $30 million in cash at closing, $45 million in cash to be paid for certain milestones and additional undisclosed payments for reaching certain sales targets. N Spine manufactures the NFlex, a rod with a segmented elastomeric and metal outer sheath that allows for controlled motion of the rod relative to the pedicle screws. However, within the U.S., the device is cleared as an adjunct to spinal fusion only. Synthes says it will begin a controlled rollout of N Spine products upon closing; a projected closing date was not announced.
Funding
DePuy Spine has made a $5.0 million Series C equity financing to Biomerix Corporation, with the funds to be used to advance the company's development programs including development of a new annulus repair implant following lumbar discectomy. According to the press release, the annular implant utilizes a biocompatible, biodurable polyurethane scaffold shown to support tissue growth in animals called the Biomerix Reticulated Matrix. The company adds that the material may reduce the risk of recurrent disc herniation and continued degeneration of the affected disc.
Legal
Stryker Corp. and former subsidiary Physiotherapy Associates Inc. have agreed to pay $16.6 million to settle charges brought by the Justice Department that it submitted fraudulent claims to Medicare and other federal health care programs in violation of the False Claims Act. The case alleged that the companies falsely billed Medicare, Medicaid and a Department of Defense health care program for services not covered by the programs as well as improperly kept excess or duplicate payments. In addition to the monetary portion of the settlement, Physiotherapy agreed to enter into a corporate integrity program with the Department of Health and Human Service's inspector general. The charges stemmed from a whistleblower suit filed by two former employees of Physiotherapy Associates, who will receive nearly $3.0 million from the settlement; the False Claims Act stipulates that whistleblowers can receive 15-30% of the proceeds of a case.
Wright Medical Group Inc. will pay $3.3 million to a former consultant after his contract was terminated in 2005. According to documents filed with the SEC, the consultant claimed his contract was wrongfully terminated or breached a product development contract. The consultant sought $3.6 million, although the arbitrator denied the claim for punitive damages; canceled a related agreement between the parties; and denied the consultant's claims for royalties for certain products. Wright will also pay 10% interest on the claim from Dec. 17, 2005 until it is paid.
Regulatory
Genzyme's planned launch of Synvisc-One will be delayed until at least 2H:08 after the company received a letter from the FDA requesting more analysis and data on the drug. Genzyme is also pursuing European market clearance for Synvisc-One and plans to apply for clearance in Asia and Latin American.
Product Introduction
HydroCision announced the U.S. launch of its SpineJet XL oval tip fluidjet instruments. According to the press release, the SpineJet XL Fusion Preparation System utilizes fluidjet technology with a curette design, allowing surgeons to simultaneously cut, ablate and remove hard or soft tissue to prepare disc spaces for graft implantation during open or minimally invasive lumbar interbody fusion procedures.
Agreements
Artimplant renegotiated an agreement with Biomet Sports Medicine whereby Biomet will distribute the company's Artelon® Tissue Reinforcement material. The new agreement follows the expansion of FDA clearance to include Artelon's use in tendons in the knee, upper arm, front thigh muscle and heel. Biomet markets Artelon Tissue Reinforcement under the name SportMesh™ Soft Tissue Reinforcement.
Tutogen entered into a tissue supply agreement with the University of Miami Tissue Bank and extended its existing tissue supply agreement with AlloSource, Inc. Under the terms of the agreements, the University of Miami Tissue Bank and AlloSource will provide Tutogen with various human tissues used in Tutogen dental, spinal and soft tissue repair product lines. The term for both agreements is five years.
Clinical
Xylos Corporation announced that its novel biomaterial for rotator cuff repair showed "excellent" safety and biocompatibility in preclinical large animal testing. The company said they plan to initiate human trials "shortly."
Operations
Symmetry provided an update on previously announced accounting irregularities at the company's Sheffield, UK operating unit; Symmetry announced last month that overstatement of revenue and income before taxes for the period 1999 through 2007 amounted to approximately $12-$16 million. Further review has indicated additional potential irregularities in the financial reporting, including the overstatement of inventory and other matters, adjusting the value of the misstatements upwards to $24-$28 million and adding that the accounting issues may predate the period originally under review.
Appointment
ISTO Technologies, Inc. appointed Blake Miles Vice President of Sales. Prior to joining ISTO, Blake was a Regional Sales Manager with a distributorship for Depuy Spine, Inc. and has also held senior level sales positions with Medtronic Sofamor Danek, Ansell Healthcare, Kos Pharmaceutical and Physican Sales & Service.
