Musculoskeletal News Roundup 29-Oct-09
BY LAUREN UZDIENSKI, OCTOBER 30, 2009
Earnings
Anika Therapeutics reported 3Q:09 revenues of $10.1 million, representing an 18% increase over the year-ago period and missing estimates by $0.3 million. Joint Health sales, including the Orthovisc and Monovisc products, were up 31% to $6.1 million. Anika noted that Monovisc was launched in Canada during 3Q, and the company is planning to file its Monovisc PMA by year-end. The company reported EPS of $0.13, representing a 37% increase over 3Q:08 and beating estimates by $0.03.
DJO International announced 3Q:09 revenues of $236.2 million, representing a 2% increase over 3Q:08. Domestic surgical implant revenue increased 6% to $15.4 million, led by sales of the Reverse Shoulder Prosthesis and the Turon primary shoulder system. Domestic rehabilitation was flat and international rehabilitation increased by 6%. All growth rates exclude the effects of currency. The company reported a net loss of $11.4 million, narrowing from a net loss of $14.4 million in 3Q:08, which was attributed to costs associated with the company's merger with ReAble and other acquisitions.
Exactech reported 3Q:09 revenue of $42.4 million, representing a 12% increase from 3Q:08 and beating estimates by $2.9 million. Among segments, hip sales increased by 24%; knee by 4%; biologics and spine by 7%; and extremity by 31%. Net income was $2.7 million, up 28% over the year-ago period, and net income after adjusting for the costs of an ongoing DOJ investigation was $3.3 million. EPS of $0.21 beat estimates by a penny.
Orthofix reported 3Q:09 revenue of $135.1 million, representing a 7% increase over the year-ago period and beating estimates by $1.3 million. Sales of spine implants and biologics increased by 11%; orthopedic sales increased by 6%; and sports medicine sales increased by 5%. All growth rates exclude the effects of currency. Net income for the quarter was $6.2 million, or $0.36 per share, beating estimates by $0.02. Adjusted for strategic investment costs, reorganization costs, foreign exchange loss and other items, net income was $7.7 million, or $0.44 per share, compared to $7.3 million, or $0.43 per share, in the year-ago period.
RTI Biologics reported 3Q:09 revenue of $42.8 million, up 11% over the year-ago period and beating estimates by $1.2 million. Orthopedic and dental revenue increased 3% to $33.3 million. While the company did not revise its guidance, Chairman and CEO Brian Hutchison noted that the company was, "mindful of the continued weakness in the global economy and its impact on procedure volumes and the orthopedic markets in general," heading into the fourth quarter. Net income increased to $2.3 million, or $0.04 per fully diluted share, from $0.4 million, or $0.01 per fully diluted share, in the year-ago quarter, beating estimates by a penny.
TranS1 reported 3Q:09 revenue of $6.9 million, representing a 15% increase over 3Q:08 and beating estimates by $0.1 million. The company pre-announced revenues earlier this month, and President and CEO Rick Randall commented that results were affected by "continuing uncertainty in the marketplace surrounding reimbursement for our AxiaLIF procedure," which the company is addressing with heightened surgeon education and support. Net loss for the quarter was $5.6 million, or $0.27 per share, widening from $4.8 million, or $0.23 per share, in 3Q:08 and beating estimates by $0.07.
Wright Medical reported 3Q:09 revenue of $117.7 million, representing a 6% increase over the year-ago period and beating estimates by $4.8 million. Among segments, hip sales increased 7%; knee sales increase 5%; extremity increased 18%; and biologics sales decreased by 4%. Net income for the quarter was $4.2 million, or $0.11 per diluted share, in line with the year-ago period and beating estimates by a penny.
Funding
Mazor Surgical Technologies raised NIS 48 million ($13 million) in shares and warrants in a public offering that closed this week. Total proceeds include funding from an institutional offering to Yorkville Advisors LLC. The public tender was oversubscribed and priced at NIS 9.10 ($2.47) per share, above the minimum price of NIS 8.50 ($2.30) per share and the YA price of NIS 8.70 ($2.36) per share. Mazor has been traded on the Tel Aviv Stock Exchange under the ticker TASE:MZOR since 2007.
Regulatory
Frontier Devices received an FDA warning letter relating to its procedures for manufacturing spinal implants, with allegations including failure to establish certain CAPA procedures as well as failure to address issues associated with a non-conforming product.
Product Introduction and Update
Osteotech announced the completion of the first U.S. surgery using its MagniFuse PC (Posterior Cervical) Bone Graft, a new platform in its product offering. The tissue-based product has a unique, resorbable, self-contained delivery system and undergoes a proprietary process to give the device a "higher concentration of multiple natural human growth factors." This is the first phase in the launch of the scaffold. The company is projected that 25 MagniFuse procedures will be completed before NASS.
Intellectual Property
Advanced Surgical Design and Manufacture sold the intellectual property for its Active Unicompartmental Knee to Stryker, closing their licensing agreement two years early for a final payment of over $1.0 million. In total, the agreement netted ADSM more than $3.0 million over three years.
Distribution
K2M, Inc. has opened a direct sales and distribution office in the United Kingdom, which will serve as the company's European base. K2M's European Vice President, Christian Johnson, commented, "Our mission is to be the worldwide leader in providing solutions for complex spinal pathologies and this is a huge step in the right direction."
License Agreements
Stematix Inc. signed an exclusive, royalty-bearing license agreement with Regenerative Sciences, LLC to bring Regenexx technology to Latin America. The Regenexx process isolates and cultures mesenchymal stem cells, which are injected back into the patient to aid in tissue healing and treat a variety of musculoskeletal diseases.
Legal
Stryker Biotech is facing a federal indictment over alleged off-label marking of OP-1. Specific charges include wire fraud, conspiracy, misbranding and making false statements to the FDA. The named defendants are Stryker Biotech LLC, a former president of Stryker Biotech and three sales managers, all of whom face up to 20 years in prison and fines of $250,000 per count.
Clinical
Applied Spine Technologies announced that Allegheny General Hospital in Pittsburgh, Pennsylvania is now among the sites participating in the company's IDE study for the Stabilimax Dynamic Spine Stabilization System. Over 100 patients have been enrolled in the study so far.
Appointments
Stryker announced that effective December 31, 2009, John W. Brown will retire from his post as Chairman of the Board and a Director of the company. Effective January 1, 2010, Stryker President and CEO Stephen MacMillan is appointed Chairman of the Board, in addition to his current responsibilities.
