Earnings
ArthroCare reported 4Q:07 revenues of $87.5 million, beating estimates by $1.7 million, representing a 25% increase over the year-ago period. Net income was $14.5 million, or $0.50 per diluted share, missing estimates by a penny and representing a 78% increase over 4Q:06. The Sports Medicine business unit grew 22%, and the Spine business unit grew 53%, over 4Q:06.
CryoLife reported 4Q:07 revenues of $25.1 million, a 19% increase over 4Q:06. Revenues beat estimates by $1.1 million. 4Q:07 net income was $2.6 million, or $0.10 per basic and fully diluted common share, beating estimates by $0.04 and improving from a net loss of $50,000, or and $0.01 per basic and fully diluted common share in 4Q:06. Orthopedic tissue processing revenues declined by 71% to $0.55 million, as CryoLife discontinued procuring and processing orthopedic tissue in 1Q:07. BioGlue® revenues increased 10% to $11.5 million in 4Q:07.
Medtronic reported FQ3:08 revenue of $3.41 billion, up 12% over the year-ago period and beating estimates by $0.07 billion. Non-GAAP net earnings and diluted earnings per share were $713.0, or $0.63 per share, beating estimates by $0.02. Spinal revenue increased 35% to $808 million, largely due to $147.0 million in Kyphon revenue. Excluding Kyphon, Spinal revenue grew 11%, driven by worldwide performance of Biologics products and Core Spinal products' growth in ex-U.S. markets.
NuVasive reported 4Q:07 revenue of $47.0 million, beating estimates by $3.02 million, and representing a 54% increase over the year-ago period. GAAP loss per share was $0.03, beating estimates by a penny; adjusted non-GAAP income was $0.08 per share. Chairman and CEO Alex Lukianov attributed 2007's performance to the adoption of the SpheRx® II, DBR® II and XLP™ Lateral Plate, which strengthened the MAS platform. Performance was also supported by the company's strategy of broadening XLIF®'s applications. In 2008, NuVasive plans to pursue additional product penetration and expand the company's market share in the U.S., specifically by "[strengthening] our existing positions in the lumbar and nerve monitoring market segments while simultaneously growing our cervical and thoracic positions," according to Mr. Lukianov.
Osteotech reported 4Q:07 revenue of $26.9 million, missing estimates by $0.6 million and representing a 6% over the year-ago period. Revenue for DBM and Hybrid/Synthetic products, the company's core product offerings, increased 17% in 4Q:07 to $17.7 million. Diluted earnings per share was $0.04, missing estimates by $0.05.
Trans1 reported 4Q:07 revenues of $5.0 million, beating estimates by $0.46 million and representing a 117% increase over 4Q:06. GAAP loss per share was $0.14, missing estimates by $0.02, in 4Q:07. Non-GAAP loss per share was $0.07 for 4Q:07. There were 566 procedures performed in 4Q:06 and 1,843 procedures performed in 2007.
IPO
MAKO Surgical Corp. made its debut on the NASDAQ (symbol: MAKO) last week, raising $51.0 million. MAKO plans to use the funds for expanded sales and marketing and R&D activities, as well as a $4 million payment to IBM under a licensing agreement with the company. Shares were priced at $10 per share, down from a planned IPO price of $14-$16 per share.
M&A
Siemens Healthcare announced plans to acquire CAS innovations, a German company that manufactures surgical navigation systems for trauma and orthopedic surgery as well as interventional radiology. No financial terms were disclosed.
BioHorizons, Inc. has been formed to create a leading digital dentistry company in the dental implant market by combining DTI Dental Technologies, Inc. and BioHorizons Implant Systems. The uniqueness stems from expertise in the digital world provided by a large scale dental laboratory and the implant expertise provided by a leading dental implant company. BioHorizons’ headquarters will be in Birmingham, Alabama.
Funding
Ranier Technology has raised $16.0 million to further develop and commercialize its CAdiscs for total disc arthroplasty. The investment was made by Alliance Trust Equity Partners (ATEP) and First Ventures, and funds will be used to conduct clinical testing and launch in Europe the CAdisc L as well as for the development and testing of the CAdisc C.
Reimbursement
Trans1 announced via a regulatory finding that the company will begin to pursue an individual reimbursement code for transacral lumbar fusion. The National Association of Spine Surgeons Reimbursement Coding Committee will propose a separate Category III tracking code for transacral lumbar fusion to the AMA, who is charged with creating CPT codes. Trans1 will use the tracking code to collect data to support a new Category I reimbursement code. If successful, the code could become effective in 2010.
Legal
The Supreme Court ruled in favor of Medtronic in the Reigel v. Medtronic case, effectively limiting the number of product-liability cases that can be heard in state courts. As we reported in June, Charles Reigel sued Medtronic after a balloon catheter failed during his angioplasty.
Synthes and Smith & Nephew settled a patent dispute over trochanteric fixation nails this week, with Smith & Nephew agreeing to license its patents to Synthes and to dissolve its injunction against Synthes for an undisclosed sum.
Clinical
Data from the eagerly-anticipated final arm of the SPORT trial was released this week, with results indicating that patients receiving decompressive laminectomy for the treatment of spinal stenosis showed improved outcomes following the procedure. As with previous arms of the study, non-adherence to randomly selected study groups impacted analyses; when patients were evaluated as-treated at three months post-surgery, patients reported less pain and improved function and ODI scores. These changes remained significant at two years. Patients who received nonsurgical care improved only moderately during the two-year follow-up period.
