WALTHAM, Mass., Nov. 10, 2016 (GLOBE NEWSWIRE) — Histogenics Corporation (Histogenics) (Nasdaq:HSGX), a regenerative medicine company focused on developing and commercializing products in the musculoskeletal space, announced its financial and operational results for the quarter ended September 30, 2016.

“We continue to execute on our strategy and operating initiatives in the third quarter of 2016.  We have now enrolled more than three-quarters of the 245 patients required to complete our NeoCart Phase 3 clinical trial, and made continued progress on the manufacturing elements of the NeoCart development program.  Enrollment is expected to be completed prior to the end of the second quarter of 2017, and we are preparing for the top-line data in the middle of 2018 and a BLA submission shortly thereafter,” stated Adam Gridley, President and Chief Executive Officer of Histogenics.  “Furthermore, we believe that the financing completed in the third quarter of 2016 was in large part due to our execution over the last year and the recognition of the market opportunity for this important therapy.  We believe we are now funded to our expected top-line Phase 3 data read-out in mid-2018,” continued Mr. Gridley.

Third Quarter 2016 and Recent Highlights

• NeoCart Phase 3 Clinical Trial Status:  As of November 9, 2016 Histogenics has enrolled 186 of the 245 patients required under the Special Protocol Assessment (SPA) with the United States Food and Drug Administration (the FDA) in its NeoCart Phase 3 clinical trial.  Enrollment trends have remained strong in each of the completed three quarters of 2016 and continue to run ahead of Histogenics’ expectations.  As a result, Histogenics confirms both its year-end enrollment guidance of 190 to 200 patients and its expectations that patient enrollment will be complete by the end of the second quarter of 2017.  As of November 9, 2016, there were 33 sites participating in the clinical trial.
• Completion of $30 Million Financing:  Histogenics completed a $30 million private placement of common stock, Series A Convertible Preferred Stock and warrants in September 2016.  The financing was led by new healthcare-focused, institutional investors and supported by existing Histogenics investors.  Histogenics believes the financing will enable it to reach its objective of generating top-line data from the ongoing NeoCart Phase 3 clinical trial in the middle of 2018.
• Additional Progress on NeoCart Critical Raw Materials:  Having reached agreement with the FDA on internally produced collagen in April 2016, and incorporating this material in the ongoing Phase 3 trial beginning in June 2016, Histogenics reached agreement with the FDA in August 2016 regarding the qualification plan for the NeoCart collagen scaffold to its in-house manufacturing facility in Lexington, Massachusetts.  Histogenics is in the process of qualifying those materials to be used upon commercialization of NeoCart, if approved.
• Additional Discussions with Japanese Regulatory Authority:  During the third quarter of 2016, Histogenics continued its dialog with the Japan Pharmaceuticals and Medical Devices Agency (PMDA) regarding the development of NeoCart for the Japanese market.  There were two informal meetings to discuss the NeoCart Phase 1 and Phase 2 data generated to date, the proposed development program and the required regulatory submission package for potential conditional approval.  In the first half of 2017, Histogenics intends to conduct formal meetings with the PMDA to define and agree upon the regulatory pathway and development requirements for the potential conditional approval of NeoCart in Japan.  Histogenics intends to leverage the results of these meetings to create value in discussions with potential partners for the Japanese market.
• Intrexon Collaboration:  Histogenics and Intrexon Corporation continue to generate compelling proof-of-concept data demonstrating our ability to make iPSC derived chondrocytes as measured by the same cartilage biomarkers as NeoCart.  The partners are currently working on a strategy to engage with the FDA and other regulatory authorities and anticipate the identification of a development plan in the first half of 2017.
• Expansion of Scientific Advisory Board:  Histogenics recently expanded its Scientific Advisory Board (SAB) with the addition of Professor Lawrence Bonassar, a leading researcher in the field of cartilage biomechanics and tissue engineering, including the structure-property relationships in cartilage to elucidate mechanisms of disease and inform the design of tissue replacement.  Dr. Bonassar is a Professor at Cornell University in the Meinig School of Biomedical Engineering and the Sibley School of Mechanical and Aerospace Engineering.  As part of a Sponsored Research Agreement, Dr. Bonassar’s lab and Histogenics have successfully demonstrated the biomechanical competence of cartilage tissue engineered using the NeoCart manufacturing technology.  The work has resulted in three presentations including one at the Orthopedic Research Society annual meeting in March 2016 and a more recent presentation at the Biomedical Engineering Society Annual Meeting in October 2016.

Financial Results for the Third Quarter of 2016

For the third quarter of 2016, Histogenics reported a loss from operations of $(6.6) million compared to $(8.0) million in the third quarter of 2015.  The decrease in operating expenses was driven by reductions in both research and development and general and administrative expenses.

Research and development expenses were $4.9 million in the third quarter of 2016, compared to $5.8 million in the third quarter of 2015.  The decrease in expense was primarily due to a reduction in consulting and temporary labor costs, hiring fees, and raw materials and patient recruiting expenses related to the NeoCart Phase 3 clinical trial.  This decrease was partially offset by an increase in clinical trial related expenses and facility-related and other expenses in the third quarter of 2016.  General and administrative expenses were $1.8 million in the third quarter of 2016, compared to $2.2 million in the third quarter of 2015.  The decrease was primarily due to a reduction in hiring fees, facility-related costs and legal and consulting costs which were partially offset by an increase in stock-based compensation expense.

For the third quarter of 2016, Histogenics reported a net loss attributable to common stockholders of $(9.2) million, or $(0.70) per share, compared to $(8.1) million, or $(0.61) per share, in the third quarter of 2015.  The increase in net loss attributable to common stockholders is primarily due to accounting charges related to the warrants issued as part of the financing that was completed in September 2016 and was partially offset by the aforementioned reductions in operating expenses.

At September 30, 2016, Histogenics had cash, cash equivalents and marketable securities of $38.0 million, compared to $30.9 million at December 31, 2015.  Histogenics believes its current cash position will fund its operations into the middle of 2018.

Conference Call and Webcast Information

Management will host a conference call on Thursday, November 10, 2016 at 8:30 a.m. EST.  A question-and-answer session will follow Histogenics’ remarks.  To participate on the live call, please dial (877) 930-8064 (domestic) or (253) 336-8040 (international) and provide the conference ID “73416804” five to ten minutes before the start of the call.

A live audio webcast of the presentation will be available via the “Investor Relations” page of the Histogenics website, www.histogenics.com. A replay of the webcast will be archived on Histogenics’ website for approximately 45 days following the presentation.

About Histogenics Corporation

Histogenics is a leading regenerative medicine company developing and commercializing products in the musculoskeletal segment of the marketplace.  Histogenics’ regenerative medicine platform combines expertise in cell processing, scaffolding, tissue engineering, bioadhesives and growth factors to provide solutions to treat musculoskeletal-related conditions.  Histogenics’ first investigational product candidate, NeoCart, is currently in Phase 3 clinical development.  NeoCart is an autologous cell therapy designed to treat cartilage defects in the knee using the patient’s own cells.  Knee cartilage defects represent a significant opportunity in the United States, with an estimated 500,000 or more applicable procedures each year. NeoCart is designed to exhibit characteristics of articular, hyaline cartilage prior to and upon implantation into the knee and therefore does not rely on the body to make new cartilage, characteristics not exhibited in other current treatment options.  For more information, please visit www.histogenics.com.

Forward-Looking Statements

Various statements in this release are “forward-looking statements” under the securities laws. Words such as, but not limited to, “anticipate,” “believe,” “can,” “could,” “expect,” “estimate,” “design,” “goal,” “intend,” “may,” “might,” “objective,” “plan,” “predict,” “project,” “target,” “likely,” “should,” “will,” and “would,” or the negative of these terms and similar expressions or words, identify forward-looking statements. Forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions and uncertainties.

Important factors that could cause actual results to differ materially from those reflected in Histogenics’ forward-looking statements include, among others:  the timing and success of Histogenics’ NeoCart Phase 3 clinical trial; possible delays in enrolling the NeoCart Phase 3 clinical trial; the ability to obtain and maintain regulatory approval of NeoCart or any product candidates, and the labeling for any approved products; the scope, progress, expansion, and costs of developing and commercializing Histogenics’ product candidates; the ability to obtain and maintain regulatory approval regarding the comparability of critical NeoCart raw materials; the size and growth of the potential markets for Histogenics’ product candidates and the ability to serve those markets; Histogenics’ expectations regarding its expenses and revenue; the sufficiency of Histogenics’ cash resources and the availability of additional financing on commercially reasonable terms; the early stage of development of the technologies on which Histogenics’ channel partnering agreement with Intrexon Corporation is based; the additional expenses that Histogenics will incur in connection with its exclusive channel collaboration agreement with Intrexon Corporation and other factors that are described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Histogenics’ Annual Report on Form 10-K for the year ended December 31, 2015 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, which are on file with the SEC and available on the SEC’s website at www.sec.gov.  Additional factors may be set forth in those sections of Histogenics’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, to be filed with the SEC in the fourth quarter of 2016.  In addition to the risks described above and in Histogenics’ annual report on Form 10-K and quarterly reports on Form 10-Q, current reports on Form 8-K and other filings with the SEC, other unknown or unpredictable factors also could affect Histogenics’ results.

There can be no assurance that the actual results or developments anticipated by Histogenics will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Histogenics.  Therefore, no assurance can be given that the outcomes stated in such forward-looking statements and estimates will be achieved.

All written and verbal forward-looking statements attributable to Histogenics or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein.  Histogenics cautions investors not to rely too heavily on the forward-looking statements Histogenics makes or that are made on its behalf.  The information in this release is provided only as of the date of this release, and Histogenics undertakes no obligation, and specifically declines any obligation, to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:

Investor Relations
Tel: +1 (781) 547-7909

COLUMBIA, Md., Nov. 07, 2016 (GLOBE NEWSWIRE) — Osiris Therapeutics, Inc. (NASDAQ:OSIR), a leading regenerative medicine company focused on developing and marketing products for wound care, orthopaedics, and sports medicine, today announced its preliminary revenue estimates for 2014 and 2015 and its anticipated 2016 revenue.

As previously announced, the Company is working diligently to complete the restatement of its 2014 financial statements as soon as possible.  Once that process is complete, the Company expects to transition to a new independent registered accounting firm and begin work on the 2015 financial statements.  The Company has made substantial progress in its work on the restatement and as a result, the Company is now able to provide revenue estimates for these annual periods.

The Company currently estimates that the restatement will result in revenue of $46 to $50 million in 2014, which is less than the previously reported revenue of $58.8 million, and that it expects to report revenue of $85 to $90 million for 2015.   In addition, the Company also announced today that it expects to report revenue for 2016 of $100 to $110 million.

As a result of the ongoing process to complete the restatement, the revenue estimates in this press release are preliminary and subject to revision.  Due to this ongoing work, the Company is not yet able to estimate net income or earnings per share information.

About Osiris Therapeutics

Osiris Therapeutics, Inc., based in Columbia, Maryland, is a world leader in researching, developing, and marketing regenerative medicine products that improve health and lives of patients and lower overall healthcare costs. Having developed the world’s first approved stem cell drug, the Company continues to advance its research and development in biotechnology by focusing on innovation in regenerative medicine – including bioengineering, stem cell research and viable tissue based products.  Osiris has achieved commercial success with products in orthopaedics, sports medicine and wound care, including BIO^{4 ™}, Cartiform^®, Grafix^®, TruSkin^™ and Stravix^™.  Osiris, Grafix, Cartiform, TruSkin and Stravix are trademarks of Osiris Therapeutics, Inc., and BIO⁴ is a trademark of Howmedica Osteonics Corp. More information can be found on the Company’s website, www.Osiris.com. (OSIR-G)

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “ongoing,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Such forward-looking statements include, without limitation, statements regarding the Company’s estimated range of revenues for 2014 and 2015 and its anticipated financial performance for the remainder of this calendar year.  Forward-looking statements are subject to known and unknown risks and uncertainties and could cause actual results to differ materially from those expressed or implied by the forward-looking statements. Several factors could cause actual results to differ materially from those expressed in or contemplated by the forward-looking statements. Such factors include, but are not limited to, the identification of additional errors in the restatement process, changes in the scope or focus of the accounting adjustments, the risk that additional information may arise prior to the expected filing with the SEC of the restated financial statements and the 2015 and 2016 financial statements or subsequent events that would require us to make adjustments. Other risk factors affecting the Company are discussed in detail in the Company’s filings with the SEC, including its Annual Reports on Form 10-K.  Accordingly, you should not unduly rely on these forward-looking statements. We undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law.

For additional information, please contact:



Diane Savoie

Osiris Therapeutics, Inc.

(443) 545-1834

OsirisPR@Osiris.com

Source: Osiris Therapeutics, Inc.

News Provided by Acquire Media

SALT LAKE CITY, UT–(Marketwired – Nov 10, 2016) – Amedica Corporation ( NASDAQ : AMDA ), a company that develops and commercializes silicon nitride ceramics as a biomaterial platform, today announced financial results for the third quarter ended September 30, 2016.

Recent Company Highlights

• Decreased year-to-date operational cash burn by 25%
• Received FDA clearance for Valeo® II Lateral Lumbar interbody fusion device
• Submitted 510(k) to FDA for new Taurus metals system with first implantation expected by end of the year
• The first stage of testing of silicon nitride by the CFDA (chinese FDA) has begun and is expected to be completed by January 2017.
• Submitted materials testing data and clinical data to the Japan PMDA
• Reduced headcount by 38% which will reduce operating cash burn by about $2 million per year
• Submitted response to FDA clarifying 510(k) application for composite silicon nitride spacer (C+CSC)

“Despite the decrease in commercial sales this quarter, we are confident with our commercial sales strategy targeted at adding new surgeons and distributors and expanding our sales into new territories,” said Dr. Sonny Bal, Chairman and Chief Executive Officer. “Later this month, we will announce a new sales leader; a seasoned, proven individual with credibility in the spine field.”

“We believe that our silicon nitride ceramic is the best-characterized biomaterial available, and offers a compelling set of advantages, especially for use in spine surgery. Even as we explore strategic development opportunities with external partners, we will remain focused on driving our spine sales,” added Dr. Bal.

Third Quarter 2016 Financial Results

Total product revenue was $3.4 million in the third quarter of 2016 as compared to $4.8 million in the same period of 2015, a decrease of $1.4 million, or 29%. This decrease was due to lower private label sales during the quarter and weaker than expected commercial sales during the final stages of the implementation of the Company’s commercial sales expansion strategy. We expect that our commercial sales expansion strategy will be substantially completed during the fourth quarter with benefits expected to begin during the first quarter of 2017. The decrease in revenue for the third quarter 2016 was also attributable, in part, to continued market pricing pressure and hospital vendor consolidation.

Cost of revenue decreased $0.9 million, or 53%, as compared to the same period in 2015. The decrease in cost of revenue was primarily due to the decline in product sales. Excluding the impact of excess or obsolete inventory for both periods, third quarter 2016 gross margins ended at 82% of total sales, as compared to 73% during the prior year period. The increase in gross margins as a percentage of sales is primarily attributable to lower private label sales, which have lower gross margins, and to a lesser extent, the impact of the medical device excise tax moratorium.

Operating expenses decreased $0.2 million, or 3%, as compared to the same period in 2015. This decline in operating expenses is primarily due to a decrease of $0.5 million in commissions as a result of decreased sales and a $0.3 million decrease in personnel related expenses. This improvements were offset by an increase of $0.6 million in legal expenses.

Net loss for the third quarter 2016 was $4.3 million, compared to a net loss of $10.1 million in the prior-year period. The reduction in net loss was primarily the result of improved gross profit, decreases in operating costs, and improvements in other income (expense).

Adjusted EBITDA, which is defined as earnings before deductions for interest, taxes, depreciation, amortization, non-cash stock compensation expense, change in fair value of derivative liabilities, offering costs, loss on extinguishment of derivative liabilities and loss on extinguishment of debt for the third quarter 2016 was a loss of $2.7 million, compared to a loss of $2.2 million for the third quarter 2015.

Cash and cash equivalents totaled $10.6 million as of September, 2016. Operating cash burn decreased to $5.3 million for the nine months ended September 30, 2016 as compared to $7.1 million the prior year period, or 25%. Total principal debt obligations were $9.0 million as of September 30, 2016, a decrease of $1.8 million from September 30, 2015.

Conference Call

The Company will hold an investor conference call to discuss the financial results on Thursday November 10, 2016 at 5:00 PM Eastern Time. The Company invites all interested parties to join the call by dialing Toll Free 877-524-8416, any time after 4:50 p.m. Eastern Time on November 10^th. The Conference ID number is 13649236. International callers should dial 412-902-1028. For those who are not available to listen to the live webcast, a digital replay will be archived on the investor relations section of the Amedica website under News/Events.

LEESBURG, Va., Nov. 10, 2016 (GLOBE NEWSWIRE) — K2M Group Holdings, Inc. (Nasdaq:KTWO) (“K2M” or the “Company”), a global medical device company focused on designing, developing and commercializing innovative and proprietary complex spine and minimally invasive spine technologies and techniques, today announced an offering of 4,500,000 shares of its common stock by affiliates of Welsh, Carson, Anderson & Stowe XI, L.P. (the “selling stockholders”). The offering is expected to close on or about November 17, 2016, subject to customary closing conditions. In addition, the underwriter has a 30-day option to purchase up to 675,000 additional shares of common stock from the selling stockholders on a pro rata basis.

The Company will not receive any proceeds from the sale of shares of common stock in the offering, including from any exercise by the underwriter of its option to purchase additional shares from the selling stockholders.

Wells Fargo Securities, LLC will act as the sole book-running manager and underwriter for the offering.  Wells Fargo Securities, LLC proposes to offer the shares of common stock from time to time to purchasers directly or through agents, or through brokers in brokerage transactions on the Nasdaq Global Select Market, or to dealers in negotiated transactions or in a combination of such methods of sale, at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.

Following the offering, the selling stockholders will continue to beneficially own 9,486,263 shares, or approximately 22.5%, of K2M’s outstanding common stock after giving effect to the offering (or 8,811,263 shares, or approximately 20.9%, if the underwriter fully exercises its option to purchase additional shares from the selling stockholders).

A registration statement (including a prospectus) relating to these securities has been filed with the U.S. Securities and Exchange Commission (the “SEC”) and has become effective.  Before you invest, you should read the prospectus in that registration statement and other documents filed with the SEC for more information about the Company and this offering.  You may obtain these documents free of charge by visiting the SEC’s website at www.sec.gov. A copy of the prospectus supplement and the accompanying prospectus related to the offering may be obtained from Wells Fargo Securities, LLC, Attention: Equity Syndicate Department, 375 Park Avenue New York, New York 10152 or by telephone at: 800-326-5897 or email at: cmclientsupport@wellsfargo.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About K2M Group Holdings, Inc.

K2M Group Holdings, Inc. is a global medical device company focused on designing, developing and commercializing innovative complex spine and minimally invasive spine technologies and techniques used by spine surgeons to treat some of the most difficult and challenging spinal pathologies. K2M has leveraged these core competencies to bring to market an increasing number of products for patients suffering from degenerative spinal conditions. These technologies and techniques, in combination with a robust product pipeline, enable the company to favorably compete in the global spinal surgery market.

Forward-Looking Statements

This press release contains forward-looking statements that reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts such as our statements about our expected financial results and guidance and our expectations for future business prospects, including with respect to our international distribution partners in Australia and Japan. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “guidance,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties including, among other things: our ability to achieve or sustain profitability; our ability to successfully demonstrate the merits of our technologies; pricing pressure from our competitors, hospitals and changes in third-party coverage and reimbursement; competition and our ability to develop and commercialize new products; aggregation of hospital purchasing from collaboration and consolidation; hospitals and other healthcare providers may be unable to obtain adequate coverage and reimbursement for procedures performed using our products; the safety and efficacy of our products is not yet supported by long-term clinical data; our dependence on a limited number of third-party suppliers; our ability to maintain and expand our network of direct sales employees, independent sales agencies and international distributors and their level of sales or distribution activity with respect to our products; the proliferation of physician-owned distributorships; concentration of sales from a limited number of spinal systems or products that incorporate these technologies; loss of the services of key members of our senior management, consultants or personnel; ability to enhance our product offerings through our research and development efforts; failure to properly manage our anticipated growth; acquisitions of or investments in new or complementary businesses, products or technologies; ability to train surgeons on the safe and appropriate use of our products; requirements to maintain high levels of inventory; impairment of our goodwill or intangible assets; disruptions in our information technology systems; any disruption or delays in operations at our facilities, including our new headquarter facility; or an ability to ship a sufficient number of our products to meet demand; ability to strengthen our brand; fluctuations in insurance cost and availability; extensive governmental regulation in the United States and foreign jurisdictions; failure to obtain or maintain regulatory approvals and clearances; requirements for new 510(k) clearances, premarket approvals or new or amended CE Certificates of Conformity; medical device reporting regulations in the United States and foreign jurisdictions; voluntary corrective actions by us or our distribution or other business partners or agency enforcement actions; a recall of our products; withdrawal or restrictions on our products or the discovery of serious safety issues with our products; possible enforcement action if we engage in improper marketing or promotion of our products; the misuse or off-label use of our products; delays or failures in any future clinical trials; the results of clinical trials; procurement and use of allograft bone tissue; environmental laws and regulations; compliance by us or our sales representatives with FDA regulations or fraud and abuse laws; U.S. legislative or regulatory healthcare reforms; medical device tax provisions in the healthcare reform laws; our need to generate significant sales to become profitable; potential fluctuations in sales volumes and our results of operations may fluctuate over the course of the year; uncertainty in our future capital needs; failure to comply with the restrictions in our revolving credit facility; continuing worldwide economic instability; our inability to protect our intellectual property rights; our reliance on patent rights that we either license from others or have obtained through assignments; our patent litigation; the outcome of potential claims that we, our employees, our independent sales agencies or our distributors have wrongfully used or disclosed alleged trade secrets or are in breach of non-competition or non-solicitation agreements with our competitors; potential product liability lawsuits; operating risks relating to our international operations; foreign currency fluctuations; our ability to comply with the Foreign Corrupt Practices Act and similar laws associated with our activities outside the United States; possible conflicts of interest with our large shareholders; increased costs and additional regulations and requirements as a result of becoming a public company; our ability to implement and maintain effective internal control over financial reporting in the future; the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make; and other risks and uncertainties, including those described under the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and our filings with the SEC.

We operate in a very competitive and challenging environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this release. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.

Investor Contact:
Westwicke Partners on behalf of K2M Group Holdings, Inc.
Mike Piccinino, CFA
443-213-0500

CARLSBAD, Calif., Nov. 09, 2016 (GLOBE NEWSWIRE) — Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of Alphatec Spine, Inc., a provider of spinal fusion technologies, announced today financial results for the third quarter ended September 30, 2016. Today the Company also announced that Donald Williams, the Chairman of the Company’s Audit Committee, has been named Lead Independent Director, effective immediately.

• Third quarter total net revenues of $26.7 million; revenue from the Company’s U.S. commercial business of $25.2 million.
• Cash totaled $25.6 million at the end of the third quarter.

Highlights of the Third quarter 2016 and Recent Activities

Operational Activities

• Closed sale of international business to Globus Medical on September 1, 2016 for $80 million in cash and $30 million, 5-year term loan.
• New capital structure established — reduced overall Company debt to $40.9 million at September 30, 2016.
• CEO search actively underway with a nationally recognized executive search firm.

Products and Portfolio

• Actively developing and commercializing products in the minimally invasive (MIS) and complex spine markets — two of the fastest growth segments for spine.
• Arsenal™ Deformity  — limited launch underway, including the addition of the Adolescent Idiopathic Scoliosis (AIS) module in Q4 2016.
• Battalion™ Lateral Spacer System and Squadron™ Lateral Retractor — received FDA 510(k) market clearance; preparing for limited market release in Q1 2017.
• XYcor® Expandable Spinal Spacer System — received FDA 510(k) market clearance; introduced to surgeons at NASS; limited market release anticipated in Q4 2016.

Supply Chain Operations

• Completed transition of international business to Globus Medical; successfully operating supply chain model to support ongoing supply agreement for international products.
• Completed corporate restructuring to align with the Company’s targeted focus on the U.S. markets and reduced workforce by 20%.
• Suppliers are engaged and actively collaborating with the Company to ensure the continuous flow of new and existing products through the supply chain.

“We are in the process of building an exciting new company, a new Alphatec, with a simplified operating model, new senior leadership and a positive new culture for our employees and our customers — all of which are supported by a broad portfolio of innovative products,” said Leslie Cross, Chairman and Chief Executive Officer of Alphatec Spine.  “Strategically, our focus for the new Alphatec is simple.  We must excel at managing our supply chain and we need to reinvigorate our sales performance and grow our U.S. business.  Today, we are actively working on both initiatives with a collective passion and sense of urgency.  This journey will take time and we anticipate both challenges and opportunities along the way.  I am confident that the leadership team has the skills and experience to drive the change needed to improve our performance and deliver enduring, profitable growth.   We look forward to sharing more details about our plans early in the new year.”

Mr. Cross added, “In addition, I am pleased to announce that Don Williams has accepted to serve as the Company’s Lead Independent Director.  Don has been an Alphatec board member since May 2015 and the Chairman of the Audit Committee since October 2015.  His experience in the public accounting industry and his contributions as a director on our board have been invaluable and we appreciate his continuing commitment to Alphatec.”

Discontinued and Continuing Operations
On September 1, 2016, the Company completed the sale of the Company’s international operations and distribution channel to Globus Medical.   Consequently, the Company’s financial results from the international business, excluding revenue and cost of sales with wholly owned subsidiaries, are reflected within discontinued operations for all periods presented. Going forward, the financial results from continuing operations will consist of net product revenue for the U.S. commercial business and the revenue associated with the supply agreement with Globus Medical. For more information on the details related to discontinued operations, please see the Company’s Form 10-Q filed with the Securities and Exchange Commission on November 9, 2016.

Quarter Ended September 30, 2016

U.S. commercial revenues for the third quarter of 2016 were $25.2 million, down 8%, compared to $27.4 million reported for the third quarter of 2015.   Within the Company’s direct hospital business, implant unit volume has increased over the prior year, however, this growth has been offset by mid-single digit price decline consistent with the pricing trends the Company has experienced for the past several years.  Revenue from the Company’s stocking business is down approximately 50% from the prior year.  The third quarter of 2016 was a difficult quarter for the Company given the distraction related to the sale of the international business, which contributed to a sequential decline in hospital implant unit volumes from the second quarter of 2016.  Today, with the successful sale and transition of the international business complete and an improved balance sheet, the Company is actively engaging with surgeon and distributor customers and building a plan to regain sales momentum and improve U.S. sales.

U.S. gross profit and gross margin for the third quarter of 2016 were $15.2 million and 60.4%, respectively, compared to $19.5 million and 71.3%, respectively, for the third quarter of 2015.

Gross margin declined 10.9 percentage points from the third quarter of 2016 primarily as a result of increased inventory costs due to lower than anticipated purchase volume and obsolete inventory reserve adjustments related to optimizing the Company’s product portfolio through active product lifecycle management.

Total operating expenses for the third quarter of 2016, excluding charges for restructuring and intangible asset impairment, were $17.1 million, reflecting a decrease of $4.6 million compared to the third quarter of 2015.  The Company has been actively monitoring its expenses and reducing costs across the general and administrative (G&A), research and development (R&D) and marketing and selling areas of the business, which contributed to this 21% overall reduction in total operating expenses.  The Company is making steady progress on its goal of reducing its operating expenses by $20 million and continues to look for additional opportunities to improve its cost structure to better align with its focus on the U.S. market going forward.

GAAP net loss for the third quarter of 2016 was $13.7 million or ($1.18) per share (basic and diluted), compared to a net loss of $160.3 million, or ($18.96) per share basic and diluted for the third quarter of 2015.  GAAP net loss for the third quarter of 2015 was unfavorably impacted by $164.3 million of non-cash impairment charges, as well as favorable $6.3 million of warrant fair-value adjustments attributable to the Company’s underlying stock price.

Adjusted EBITDA in the third quarter of 2016 was $709 thousand, or 2.7% of revenues, compared to $3.5 million, or 11.0% of revenues reported in the third quarter of 2015.  Third quarter 2016 adjusted EBITDA represents net income excluding effects of interest, taxes, depreciation, amortization, stock-based compensation and restructuring expenses.

Cash and cash equivalents were $25.6 million at September 30, 2016, compared to $9.5 million reported at June 30, 2016.  The increase is primarily the result of the proceeds from the sale of the international business and the associated borrowing under the debt facility with Globus Medical.

Total Current and Long-term Debt, which includes both MidCap Financial and Globus Medical, was $40.9 million at September 30, 2016.  This represents a decrease of $34.7 million from June 30, 2016 as a result of the Company applying a significant portion of the net proceeds from the sale of the international business to reduce the Company’s total debt and the addition of the $25 million initial draw down from the credit facility with Globus that occurred upon closing of the Globus transaction.

Nine Months Ended September 30, 2016

U.S. net revenues for the nine months ended September 30, 2016 were $82.4 million, down 3.1%, compared to $85.1 million reported for the nine months ended September 30, 2015.   Sales in the Company’s direct hospital business increased over the same period in the prior year, however, this growth was partially offset by mid-single digit price declines consistent with pricing trends the Company has experienced for the past several years.  Revenue from the Company’s stocking business is down approximately 50% from the same period in the prior year.

U.S. gross profit and gross margin for the nine months ended September 30, 2016 were $56.4 million and 68.4%, respectively, compared to $58.1 million and 68.3%, respectively, for the nine months ended September 30, 2015.

Gross margin increased slightly from the prior period primarily as a result of the absence of one-time charges that were present during the nine months in 2015 that are not present over the same period in 2016.

Total operating expenses for the nine months ended September 30, 2016, excluding charges for restructuring and intangible asset impairment, were $66.3 million, reflecting a decrease of $3.8 million compared to the nine months ended September 30, 2015.  The 5.5% improvement from prior period is primarily driven by expense reductions across R&D, marketing and G&A.

GAAP net loss for the nine months ended September 30, 2016 was $25.6 million or ($1.91) per share (basic and diluted), compared to a net loss of $168.8 million, or ($19.92) per share basic and diluted for the nine months ended September 30, 2015.  GAAP net loss for the nine months ended September 30, 2015 was unfavorably impacted by $164.3 million of non-cash impairment charges, as well as favorable $6.3 million of warrant fair-value adjustments attributable to the Company’s underlying stock price.

Adjusted EBITDA in the nine months ended September 30, 2016 was $3.3 million, or 3.5% of revenues, compared to $7.1 million, or 7.1% of revenues reported in the nine months ended September 30, 2015.  Nine months ended September 30, 2016 adjusted EBITDA represents net income excluding effects of interest, taxes, depreciation, amortization, stock-based compensation and restructuring expenses.

Non-GAAP Information

Alphatec Spine reports certain non-GAAP financial measures such as non-GAAP earnings and earnings per share, adjusted for effects of amortization and other non-recurring or expense items, such as impairments, loss on extinguishment of debt, and restructuring expenses.  Adjusted EBITDA included in this press release is a non-GAAP financial measure that represents net income (loss) excluding the effects of interest, taxes, depreciation, amortization, stock-based compensation expenses, in process research and development (IPR&D) expenses and other non-recurring income or expense items, such as impairments, restructuring expenses, severance expenses, litigation expenses, damages associated with ongoing litigation and transaction-related expenses.  The Company believes that non-GAAP adjusted EBITDA provides investors with an additional tool for evaluating the Company’s core performance, which management uses in its own evaluation of continuing operating performance, and a base-line for assessing the future earnings potential of the Company.  For completeness, management uses non-GAAP adjusted EBITDA in conjunction with GAAP earnings and earnings per common share measures.  These non-GAPP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.   Included below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measure.

About Alphatec Spine

Alphatec Spine, Inc., a wholly owned subsidiary of Alphatec Holdings, Inc., is a medical device company that designs, develops and markets spinal fusion technology products and solutions for the treatment of spinal disorders associated with disease and degeneration, congenital deformities and trauma. The Company’s mission is to improve lives by delivering advancements in spinal fusion technologies. The Company markets products in the U.S. via a direct sales force and independent distributors.

Additional information can be found at www.alphatecspine.com.

Forward Looking Statements

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Such statements are based on management’s current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Alphatec Spine cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward looking statements include the references to the success of the Company’s initiatives to drive sales growth, increase margins and increase operating efficiencies.  The important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to:  the uncertainty of success in developing new products or products currently in Alphatec Spine’s pipeline, including the products discussed in this press release; the uncertainties in the Company’s ability to execute upon its strategic operating plan; the uncertainties regarding the ability to successfully license or acquire new products, and the commercial success of such products; failure to achieve acceptance of Alphatec Spine’s products by the surgeon community, including Battalion, Arsenal Deformity and XYcor; the Company’s ability to meet the product supply obligations set forth in the supply agreement with Globus Medical; failure to obtain FDA clearance or approval or international regulatory approvals for new products, including the products discussed in this press release, or unexpected or prolonged delays in the process; continuation of favorable third party payor reimbursement for procedures performed using the Company’s products; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to successfully control its costs or achieve profitability; uncertainty of additional funding; the Company’s ability to compete with other competing products and with emerging new technologies; product liability exposure; an unsuccessful outcome in any litigation in which the Company is a defendant; patent infringement claims; claims related to the Company’s intellectual property and the Company’s ability to meet its financial obligations under its credit agreements and the Orthotec settlement agreement. The words “believe,” “will,” “should,” “expect,” “intend,” “estimate” and “anticipate,” variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not a forward-looking statement.  Please refer to the risks detailed from time to time in Alphatec Spine’s SEC reports, including its Annual Report Form 10-K for the year ended December 31, 2015, filed on March 15, 2016 with the Securities and Exchange Commission, and its Amended Annual Report Form 10-K/A filed on April 29, 2016, as well as other filings on Form 10-Q and periodic filings on Form 8-K. Alphatec Spine disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.

CONTACT: Investor/Media Contact:

Christine Zedelmayer

Investor Relations

Alphatec Spine, Inc.

(760) 494-6610

czedelmayer@alphatecspine.com