Earnings
Alphatec Spine, Inc. reported consolidated revenues for 2Q:08 of $23.9 million, an increase of 27% from the $18.8 million reported in 2Q:07. U.S. revenues for 2Q:08 were $19.4 million, an increase of 20% from the $16.2 million reported in 2Q:07. Asia revenues for 2Q:08 were $4.5 million, an increase of 71% from the $2.6 million reported in 2Q:07. Net loss for 2Q:08 was $3.6 million, or $0.08 per share (basic and diluted), compared with a net loss of $0.7 million, or $0.02 per share (basic and diluted), in 2Q:07. "We are pleased with the sequential improvement in our rate of growth for the core U.S. business to nearly 20%. We continue to focus on execution, build out of our distribution network, upgrades and expansion of our core product line, and commercializing innovative spine products," stated Dirk Kuyper, President and CEO.
DJO reported 2Q:08 sales of $249.8 million, up 135% over 2Q:07, which the company attributed to acquisitions and "continued growth across the Company's business segments." The domestic rehab segment contributed $173.3 million in revenue, up 155% over 2Q:07; international rehab contributed $63.8 million, up 146%; and surgical implants contributed $18.7 million, up 13%. The company reported a net loss of $20.8 million, widening from $8.1 million in 2Q:07, which the company attributed to "significant purchase accounting adjustments, non-recurring charges and other adjustments related to the DJO merger [with ReAble Therapeutics, Inc.] and the other acquisitions."
Orthofix reported 2Q:08 revenues of $130.0 million, missing estimates by $1.2 million and representing a 5% increase over 2Q:07. Compared with 2Q:07, orthopedic sales increased 19%, spine stimulation sales increased 13% and sports medicine sales increased 9%. Spinal implants and biologics were down 9%. Reported net income was $5.8 million, or $0.34 per diluted share, beating estimates by $0.04. The company also announced an agreement to collaborate with Musculoskeletal Transplant Foundation to develop and launch a stem cell-based bone growth biologic matrix for use in spinal and orthopedic surgeries. Financial terms of that agreement were not disclosed.
OrthoLogic reported a net loss of $2.8 million, or $0.07 per share, for 2Q:08, compared to a net loss of $2.3 million, or $0.06 per share, in 2Q:07. The increased loss was attributed to dermal scarring clinical trials costs, reduced interest income due and reduction in funds available for investment.
Orthovita reported 2Q:08 revenues of $19.3 million, representing a 30% increase over 2Q:07 and beating estimates by $2.0 million. Sales growth for 2Q:08 was attributed to the VITOSS FOAM and VITAGEL product portfolios in the U.S. as the company "further [develops its] U.S. field sales network." The company reported a net loss of $3.6 million for the quarter, widening from $3.2 million in the year-ago period, which the company attributed to increased selling and marketing expenses and increased interest expense. Net loss per common share was $0.05, missing estimates by a penny.
Osiris Therapeutics reported 2Q:08 revenues of $2.5 million (from government contracts, collaborative research agreements and royalties). Analysts had forecast sales of $1.64 million. Osteocel sales were $9.0 million, up from $3.3 million in 2Q:07; the company said they plan to use the proceeds of the sale of that product to NuVasive to "fund its core business" of developing and commercializing stem cell therapeutics. The company reported a net loss of $15.4 million, or $0.48 per share, beating estimates of a loss of $0.51 per share.
Smith & Nephew reported 2Q:08 sales of $1.0 billion, an increase of 23% over the year-ago period, beating estimates by $51.6 million. Underlying revenue growth was 8% (10% excluding the impact of Plus Orthopedics.) Reconstruction, driven by hip and knee sales, contributed $396.0 million and grew 8% over 2Q:07 (11% excluding Plus impact). Trauma sales grew 5% (10% excluding Plus impact), with U.S. fixation sales improving. Endoscopy was up 10%, contributing $205.0 million. The company also reported earnings per share of $0.14, in line with estimates.
Straumann reported H1:08 sales of CHF 412.8 million ($405.8 million), up 17% (22% in local currencies) over 1H:07. The company attributed revenue growth to strength in the Tissue Level Implant business and the new generation Bone Level Implant. Growth was also supported by SLActive, an implant surface that "significantly reduces healing times and increases safety" and the acquisition of etkon. The company also reported net profit of CHF 100.5 million ($98.7 million.) Additionally, the FDA has lifted the ban on the company's Biora product line, which had stemmed from concerns about quality procedures and documentation at a Swedish plant.
Symmetry Medical reported 2Q:08 revenue of $109.8 million, representing a 58% increase over 2Q:07 and beating estimates by $6.0 million. Net income was $6.2 million, or $0.18 per diluted share, missing estimates by $0.02. CEO Brian Moore said record revenues for the quarter showed "continued demand" for Symmetry's manufacturing services, adding that the business has been strengthened by the "decision to maintain capacity during slower periods and augment our core orthopedic business with complementary acquisitions."
M&A
Integra LifeSciences closed its acquisition of Theken Spine, LLC, Theken Disc, LLC and Therics, LLC for $75 million in cash, subject to certain adjustments, and up to $125 million in future performance-based payments. Integra will provide guidance on the financial implications of the acquisition during its 2Q:08 conference call on August 12.
Funding
OsteoGeneX received a $1.0 million NIH (NIAMS) Phase II Small Business Innovation Research Award and a matching award of $375,000 from the Kansas Bioscience Authority. The company is developing small molecule-based products to treat osteoporosis and facilitate bone growth.
Regulatory
Coligne AG received FDA clearance for the Ostapek composite VBR devices for use in the thoracic and lumbar spine. The company says their carbon, high-density devices simulate the bone trabecula architecture of a vertebral body.
Nexgen Spine received CE mark approval for the Physio-L Lumbar Artificial Disc. The company calls the product an "elastomeric disc prosthesis" offering shock absorption.
Product Introduction & Update
ConforMIS, Inc. launched the iDuo, a patient-specific bicompartmental knee resurfacing implant for patients whose arthritic damage is limited to either the medial or lateral compartment of the knee in addition to the patellofemoral compartment. The company says, "The iDuo resurfaces only the affected areas, preserving far more bone on both the femur and tibia than traditional knee replacement surgery. The iDuo also preserves both the anterior and posterior cruciate ligaments, helping to maintain natural knee kinematics."
Clinical
Mesoblast announced results from a study evaluating the use of the company's proprietary adult stem cell technology for the treatment of long bone fractures. At 12 months, eight of the ten patients participating in the study achieved complete bony union, and a ninth (with fractures of both the femur and tibia) achieved bony union of the tibia. These eight patients have been able to fully bear weight and resume daily activities.
Miscellaneous
Zimmer announced that Stuart M. Essig has resigned from its Board of Directors after serving as an independent director for the past three years. During his time on the Board, he served on the Compensation and Management Development, Audit and Corporate Governance Committees. No reason was given for the resignation. Mr. Essig is President and CEO of Integra LifeSciences.
