Musculoskeletal News Roundup 5-Aug-10
BY LAUREN UZDIENSKI, AUGUST 5, 2010
Earnings
Alphatec Spine reported consolidated 2Q:10 revenue of $45.4 million, which represents 55% growth over 2Q:09. On a pro forma basis, year-over-year revenue growth was 10% for the second quarter and 15% year-to-date. Adjusted EBITDA was $3.8 million in 2Q:10, an increase of $1.3 million compared to adjusted EBITDA of $2.5 million reported for 2Q:09. Net loss for 2Q:10 was $3.0 million, or $0.04 per share (basic and diluted), compared with a net loss of $6.3 million, or $0.13 per share (basic and diluted) for 2Q:09.
ArthroCare reported 2Q:10 revenues of $88.8 million, up 10% over 2Q:09 and beating estimates by $1.5 million. Sports medicine sales totaled $54.7 million, representing a 10% increase over 2Q:09, and spine sales decreased by 6% to $4.7 million. Net income for the quarter was $7.3 million, or $0.22 per diluted share, compared to a net loss of $2.7 million, or $0.10 per share, in 2Q:09. EPS beat estimates by a penny.
Artimplant reported 2Q:10 revenues of SEK 5.1 million ($0.7 million), down from SEK 7.9 million ($1.0 million) in 2Q:09. Artelon Spacer sales contributed SEK 2.2 million ($0.3 million) to 2Q:10, down from SEK 4.7 million ($0.6 million) in 2Q:09. The company attributed the decrease to reduced sales from a distributor. Sales of Artelon Tissue Reinforcement also decreased to SEK 2.4 million ($0.3 million) from SEK 3.1 million ($0.4 million) in 2Q:09, which the company attributed a lack of new inventory sales to Biomet Sports Medicine. Net loss for the quarter totaled SEK 5.0 million ($0.6 million), or SEK 0.08 ($0.01) per share, widening from SEK 4.1 million ($0.5 million), or SEK 0.07 ($0.00) per share, in 2Q:09.
BioMimetic Therapeutics reported 2Q:10 royalty and sublicense income of $0.4 million, flat over the year-ago period and missing estimates by $0.1 million. Among highlights for the quarter, the company announced that the FDA accepted the company's application for Augment bone graft in June. Net loss for the quarter was $7.7 million, or $0.35 per diluted share, widening from a net loss of $6.3 million, or $0.32 per diluted share, in 2Q:09 and beating estimates by $0.05.
DJO reported 2Q:10 revenues of $242.5 million, representing a 5% increase over the year-ago period. Among segments, bracing and supports increased by 6%; recovery sciences sales increased by 4%; international sales increased by 8%; and surgical implant sales declined by 4%. Growth rates exclude the effects of currency. Net income for the quarter was $0.2 million, improved from a net loss of $13.1 million in 2Q:09.
Exactech reported 2Q:10 revenues of $47.6 million, up 10% over the year-ago period and missing estimates by $0.4 million. Among segments, knee increased by 2%; hip increased by 9%; biologic and spine decreased by 1%; and extremity increased by 40%. Net income for the quarter was $3.0 million, or $0.23 per diluted share, up from $2.6 million, or $0.20 per diluted share, in 2Q:09. Adjusted for expenses associated with the company's ongoing DOJ inquiry, net income was $3.2 million, or $0.25 per share, beating estimates by a penny.
MAKO Surgical reported 2Q:10 revenues of $10.3 million, up 151% over the year-ago period and beating estimates by $1.4 million. During the quarter the company recorded the sale of seven RIO systems, bringing the total domestic commercial installed base to 46 RIO systems. Additionally, 793 MAKOplasty procedures were performed in 2Q:10, up 122% over 2Q:09. Net loss for quarter was in line with estimates at $8.5 million, or $0.26 per basic and diluted share, compared to $6.4 million, or $0.26 per basic and diluted share, in 2Q:09.
Orthovita reported 2Q:10 revenues of $23.9 million, representing a 2% decrease from the year-ago period and missing estimates by $2.2 million. The company attributed $1.3 million in sales to Cortoss, which was not available in 2Q:09. Vitoss sales decreased by 9% in 2Q:10, which the company attributed to lower sales of the Vitoss Morsel and Foam products; sales of Vitoss Bioactive Foam products increased by 7% in the quarter. The company reported a net loss for 2Q:10 of $0.6 million, or $0.01 per common share, which compares to a net loss of $0.7 million, or $0.01 per common share, in 2Q:09. EPS missed estimates by a penny.
RTI Biologics reported 2Q:10 revenues of $41.2 million, flat over the year-ago period and beating estimates by $0.8 million. Sales of sports medicine products increased by 14%; spine sales declined by 25%; dental sales were flat; and BGS/general orthopedic sales increased by 41%. Net income for the quarter was $0.9 million, or $0.02 per fully diluted share, flat over 2Q:09 and beating estimates by $0.02.
Smith & Nephew reported 2Q:10 revenues of $959.0 million, representing a 4% increase over the year-ago period and missing estimates by $0.7 million. Orthopedic revenue increased by 1% to $535.0 million, with hip flat, knee up 3% and trauma up 2%. Additionally, endoscopy sales increased by 9% to $206.0 million, with arthroscopy up by 11% and visualization flat. Growth rates exclude the effects of currency. Adjusted EPS increased by 11% to $0.17, in line with estimates.
Symmetry Medical reported 2Q:10 revenue of $88.8 million, down 12% from the year-ago period. Instrument sales declined by 25%, and implants declined by 5%. Adjusted net income for 2Q:10 was $4.7 million, or $0.14 per share, down 48% from the year-ago period and in line with estimates.
TranS1 reported 2Q:10 revenues of $7.2 million, representing a 9% decrease over the year-ago period and beating estimates by $0.3 million. The company reported that 667 TranS1 procedures were performed globally during the quarter. Net loss for the quarter was $3.6 million, or $0.18 per share, compared to $6.8 million, or $0.33 per share, in 2Q:09, beating estimates by $0.09.
Wright Medical reported 2Q:10 revenues of $127.7 million, representing a 7% increase over the year-ago period and missing estimates by $1.2 million. Among segments, hip increased by 8%; knee increased by 5%; extremity increased by 15%; and biologics increased by 2%. Growth rates exclude the effects of currency. Net income for the quarter of 2010 was $4.8 million, or $0.13 per diluted share, increasing from $2.4 million, or $0.06 per diluted share, in 2Q:09 and beating estimates by a penny.
Funding
Bacterin closed a private placement valued at $9.2 million, which the company plans to use to repay its bridge notes and for working capital, including the expansion of its sales force. The company did not identify participants ins the round. Bacterin is a developer of anti-infective coatings as well as a bone graft material.
Regulatory
The CDRH announced the conclusion of its internal 510(k) review, which culminated in a 120-page document proposing certain changes to the process. Among the proposed changes is a new "class IIb" designation, which would be associated with additional requirements for clinical or manufacturing data and the potential for post-market surveillance. The agency says the recommendations are designed to "foster device innovation, create a more predictable regulatory environment and enhance device safety."
Product Introduction and Update
Wright Medical launched the EVOLUTION Medial-Pivot Knee System, which the company says offers "enhanced instrumentation, more sizing options and a posterior stabilized option."
Reimbursement
CMS released a final rule for FY 2011 IPPS policies and payment rates, increasing ortho payments from levels proposed in April. Large joint reimbursement will increase by 1% over FY 2010, and spinal fusion pay will increase by 4%.
Clinical
VertiFlex enrolled the 150th patient in their prospective, multi-center, controlled IDE study for the Superion Interspinous Spacer (ISS). The device is implanted percutaneously for the treatment of spinal stenosis. The company added that enrollment will be complete at approximately 250 patients, which they expect to achieve in early 2011.
Investigations
Zimmer received a letter from Sen. Chuck Grassley requesting data on the company's processes for tracking failure rates of its large joint systems, specifically when safety issues are raised by company consultants. The inquiry stems from concerns over the company's NexGen CR-Flex, a cementless total knee, which were publicized by the New York Times in an article on Dr. Richard Berger's relationship with Zimmer.
Appointments
TranS1 promoted Rick Feiler to Vice President of Marketing. Mr. Feiler started with TranS1 in 2006 as a clinical sales manager and has been the Director of Marketing since November 2007. The company notes that he has over 20 years of sales management, field sales and marketing experience in the medical device industry.
