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RTI Surgical® Announces Third Quarter 2018 Results

Posted On November 1, 2018 By OrthoSpineNews In Financial /  

November 01, 2018

ALACHUA, Fla.–(BUSINESS WIRE)–RTI Surgical, Inc. (Nasdaq: RTIX), a global surgical implant company, reported operating results for the third quarter of 2018.

“The strength of our third quarter results underscores the substantial ongoing progress we are making across our strategic transformation and the growing momentum throughout the company,” stated Camille Farhat, President and CEO. “Our spine franchise produced excellent results aided by growth in recently introduced products, and our OEM franchise continued its strong performance. Our operational excellence initiatives are taking hold throughout the organization, helping to further reduce costs and instill a culture of continuous improvement. Overall, with our seventh consecutive quarter of meeting or exceeding our commitments, our team is executing effectively on many fronts and we have increased our focus on accelerating growth with investments in both organic and inorganic activities.”

Third Quarter 2018

RTI’s worldwide revenues for the third quarter of 2018 were $69.1 million, compared with $66.7 million during the same period in the prior year. Excluding a $1.3 million reduction from the sale of substantially all the assets of the Cardiothoracic Closure business completed in August 2017, total revenues increased $3.7 million, or 5.7%, driven by strong performance in both the spine and OEM franchises. Gross profit for the third quarter of 2018 was $37.7 million, or 54.5% of revenues, a significant increase compared to $33.5 million, or 50.3% of revenues, in the third quarter of 2017.

During the third quarter of 2018, RTI incurred non-recurring pre-tax charges to support the ongoing strategic transformation of the business. The company incurred $1.9 million of acquisition and integration costs related to investment in our objective of accelerating growth through the ongoing pursuit of M&A activity. The company incurred $0.8 million of severance and restructuring charges to complete the rationalization of the international infrastructure and transition distribution to a third-party logistics partner. Finally, the company recognized a $3.0 million gain from a cash contingency consideration related to the release of escrow funds held at the close of the Cardiothoracic Closure sale. During the third quarter of 2017, the company incurred $2.8 million of non-recurring charges primarily to support executive leadership transitions.

During the third quarter of 2017, RTI completed the sale of substantially all the assets related to its Cardiovascular Closure business for total consideration of $54 million, plus an additional $6 million in contingent cash consideration. In conjunction with the sale of the Cardiovascular Closure business, the company recognized a gain of $34.1 million, or $18.2 million after-tax.

Net income applicable to common shares was $2.9 million, or $0.04 per fully diluted common share in the third quarter of 2018, compared to net income applicable to common shares of $16.5 million, or $0.23 per fully diluted common share in the third quarter of 2017. As outlined in the reconciliation tables that follow, excluding the impact of the various non-recurring charges, Adjusted Net Income applicable to common shares was $2.0 million, or $0.03 per fully diluted common share in the third quarter of 2018.

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), for the third quarter of 2018 was $9.1 million, or 13% of revenues, compared with $8.1 million, or 12% of revenues for the third quarter of 2017. The increase in Adjusted EBITDA is driven by gross margin expansion associated with the efforts to reduce complexity and increase operational excellence initiated during 2017, partially offset by increased operating expenses focused on accelerating growth, such as planned increases to research and development spending.

Fiscal 2018 Outlook

Farhat concluded, “We firmly believe our strategic transformation is well underway. Our teams are aligned with common purpose and intense focus on achieving our considerable potential. Given the ongoing success of our efforts to reduce complexity and drive operational excellence, we are focused on accelerating growth by further developing our R&D capabilities, pursuing M&A activities, and ensuring we continue to deliver on our commitments.”

Based on our recent financial results and current business outlook, the Company is narrowing its financial guidance for fiscal 2018, originally issued on January 5, 2018:

  • The Company now expects full year revenues in the range of approximately $280 million.
  • The Company now expects full year Adjusted EBITDA to be in the range of $32 million to $35 million.

The Company noted the following assumptions are included in its guidance:

  • Relatively stable market conditions and regulatory environment;
  • Continued positive revenue contribution from the acquisition of Zyga Technology – announced January 4, 2018;
  • Ongoing positive impact of efforts to reduce complexity and implement operational excellence; and
  • The successful ongoing transition of map3 to ViBone, or an alternative RTI orthobiologic product, during November and December 2018.

Conference Call

RTI will host a conference call and audio webcast at 9:00 a.m. ET today. The conference call can be accessed by dialing (877) 383-7419 (U.S.) or (760) 666-3754 (International). The webcast can be accessed through the investor section of RTI’s website at www.rtix.com/investors. A replay of the conference call will be available on RTI’s website for one month following the call.

About RTI Surgical, Inc.

RTI Surgical is a leading global surgical implant company providing surgeons with safe biologic, metal and synthetic implants. Committed to delivering a higher standard, RTI’s implants are used in sports medicine, plastic surgery, spine, orthopedic and trauma procedures and are distributed in more than 40 countries. RTI has four manufacturing facilities throughout the U.S. and Europe. RTI is accredited in the U.S. by the American Association of Tissue Banks and is a member of AdvaMed. For more information, please visit www.rtix.com. Connect with us on LinkedIn and Twitter.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the statements made in this communication about our positive operational and financial performance, the continued contribution of the OEM franchise to RTI’s growth, the impact of operational priorities on costs and their impact on RTI’s financial performance, RTI’s ability to meet its commitments, the implementation of RTI’s strategic initiatives, the reduction in complexity of RTI’s operations, RTI’s ability to maintain partnerships in the organ procurement community, RTI’s ability to expand the number of patients it is able to serve, the integration of Zyga’s operations, anticipated financial results, growth rates, new product introductions, and future operational improvements. These forward-looking statements are based on management’s current expectations, estimates and projections about our industry, our management’s beliefs and certain assumptions made by our management. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. The forward-looking statements are not guarantees of future performance and are based on certain assumptions including RTI’s ability to reduce inventory, manage expenses and accomplish its goals and strategies, the quality of the new product offerings from RTI, general economic conditions, as well as those within RTI’s industry, RTI’s ability to integrate acquisitions into existing operations, and numerous other factors and risks identified in the Company’s Form 10-K for the fiscal year ended December 31, 2017 and other filings with the Securities and Exchange Commission (SEC). Our actual results may differ materially from the anticipated results reflected in these forward-looking statements. Copies of the company’s SEC filings may be obtained by contacting the company or the SEC or by visiting RTI’s website at www.rtix.com or the SEC’s website at www.sec.gov.

RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share data)
Three months ended Nine months ended
September 30, September 30,
2018 2017 2018 2017
Revenues $ 69,064 $ 66,688 $ 209,639 $ 208,747
Costs of processing and distribution 31,409 33,177 108,262 102,494
Gross profit 37,655 33,511 101,377 106,253
Expenses:
Marketing, general and administrative 29,671 27,678 87,326 86,845
Research and development 3,606 2,801 10,297 10,229
Severance and restructuring costs 824 2,820 1,708 10,623
Asset impairment and abandonments 104 – 4,748 –
Acquisition and integration expenses 1,941 – 2,741 –
Cardiothoracic closure business divestiture contingency consideration (3,000 ) – (3,000 ) –
Gain on cardiothoracic closure business divestiture – (34,090 ) – (34,090 )
Total operating expenses 33,146 (791 ) 103,820 73,607
Operating income (loss) 4,509 34,302 (2,443 ) 32,646
Total other expense – net (598 ) (681 ) (2,524 ) (2,470 )
Income (loss) before income tax (provision) benefit 3,911 33,621 (4,967 ) 30,176
Income tax (provision) benefit (807 ) (16,135 ) 1,646 (16,251 )
Net income (loss) 3,104 17,486 (3,321 ) 13,925
Convertible preferred dividend (173 ) (938 ) (2,120 ) (2,772 )
Net income (loss) applicable to common shares $ 2,931 $ 16,548 $ (5,441 ) $ 11,153
Net income (loss) per common share – basic $ 0.05 $ 0.28 $ (0.09 ) $ 0.19
Net income (loss) per common share – diluted $ 0.04 $ 0.23 $ (0.09 ) $ 0.19
Weighted average shares outstanding – basic 63,495,952 59,704,533 63,517,958 59,045,372
Weighted average shares outstanding – diluted 79,284,315 75,188,161 63,517,958 59,954,964
RTI SURGICAL, INC. AND SUBSIDIARIES
Reconciliation of Net Loss Applicable to Commons Shares to Adjusted EBITDA
(Unaudited, in thousands)
Three Months Nine Months
Ended September 30, Ended September 30,
2018 2017 2018 2017
Net income (loss) applicable to common shares $ 2,931 $ 16,548 $ (5,441 ) $ 11,153
Interest expense, net 597 741 2,192 2,475
Provision (benefit) for income taxes 807 16,135 (1,646 ) 16,251
Depreciation 2,577 2,623 7,824 7,947
Amortization of intangible assets 1,149 952 2,970 2,757
EBITDA 8,061 36,999 5,899 40,583
Reconciling items impacting EBITDA
Preferred dividend 173 938 2,120 2,772
Non-cash stock based compensation 1,080 2,305 3,650 4,113
Foreign exchange loss (gain) 1 (60 ) 23 (5 )
Other reconciling items *
Inventory write-off – – 7,582 –
Inventory purchase price adjustment – – 456 –
Severance and restructuring costs 824 2,000 1,708 9,470
Loss on extinguishment of debt – – 309 –
Asset impairment and abandonments – – 4,515 –
Acquisition and integration expenses 1,941 – 2,741 –
Cardiothoracic closure business divestiture contingency consideration (3,000 ) – (3,000 ) –
Gain on cardiothoracic closure business divestiture – (34,090 ) – (34,090 )
Adjusted EBITDA $ 9,080 $ 8,092 $ 26,003 $ 22,843
Adjusted EBITDA as a percent of revenues 13 % 12 % 12 % 11 %
*See explanations in Use of Non-GAAP Financial Measures section later in this release.
RTI SURGICAL, INC. AND SUBSIDIARIES
Reconciliation of Net Income (Loss) Applicable to Common Shares and Net Income (Loss) Per Diluted Share to
Adjusted Net Income (Loss) Applicable to Common Shares and Adjusted Net Income (Loss) Per Diluted Share
(Unaudited, in thousands except per share data)
Three Months Ended
September 30, 2018 September 30, 2017
Net Net
Income (Loss) Amount Income (Loss) Amount
Applicable to Per Diluted Applicable to Per Diluted
Common Shares Share Common Shares Share
As reported $ 2,931 $ 0.04 $ 16,548 $ 0.23
Severance and restructuring costs 824 0.01 2,820 0.04
Acquisition and integration expenses 1,941 0.02 – –
Cardiothoracic closure business divestiture contingency consideration (3,000 ) (0.04 ) – –
Gain on cardiothoracic closure business divestiture – – (34,090 ) (0.45 )
Tax effect on new tax legislation (650 ) (0.01 ) – –
Tax effect on adjustments – – 15,159 0.20
Adjusted * $ 2,046 $ 0.03 $ 437 $ 0.01
Nine Months Ended
September 30, 2018 September 30, 2017
Net Net
Income (Loss) Amount Income (Loss) Amount
Applicable to Per Diluted Applicable to Per Diluted
Common Shares Share Common Shares Share
As reported $ (5,441 ) $ (0.09 ) $ 11,153 $ 0.19
Severance and restructuring costs 1,708 0.03 10,623 0.18
Asset impairment and abandonments 4,515 0.07 – –
Inventory purchase price adjustment 456 0.01 – –
Loss on extinguishment of debt 309 0.00 – –
Inventory write-off 7,582 0.12 – –
Acquisition and integration expenses 2,741 0.04 – –
Cardiothoracic closure business divestiture contingency consideration (3,000 ) (0.05 ) – –
Gain on cardiothoracic closure business divestiture – – (34,090 ) (0.57 )
Tax effect on new tax legislation (650 ) (0.01 ) – –
Tax effect on adjustments (3,654 ) (0.06 ) 13,855 0.23
Adjusted * $ 4,566 $ 0.07 $ 1,541 $ 0.03
* See explanations in Use of Non-GAAP Financial Measures section later in this release.
Amount Per Diluted Share may not foot due to rounding.

Use of Non-GAAP Financial Measures

To supplement the Company’s unaudited condensed consolidated financial statements presented on a GAAP basis, the Company discloses certain non-GAAP financial measures that exclude certain amounts, including EBITDA, Adjusted EBITDA, Adjusted Net Income Applicable to Common Shares, Adjusted Net Income per Common Share – Diluted and Adjusted Gross Profit. The calculation of the tax effect on the adjustments between GAAP net income (loss) applicable to common shares and non-GAAP net income applicable to common shares is based upon our estimated annual GAAP tax rate, adjusted to account for items excluded from GAAP net income (loss) applicable to common shares in calculating Adjusted Net Income Applicable to Common Shares-Diluted. A reconciliation of the non-GAAP financial measures to the corresponding GAAP measures is included in the tables listed above.

The following is an explanation of the adjustments that management excluded as part of adjusted measures for the three and nine months ended September 30, 2018 and 2017 as well as the reason for excluding the individual items:

Severance and restructuring costs – These costs relate to the reduction of our organizational structure, primarily driven by simplification of our international operating infrastructure, specifically our distribution model. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Asset impairment and abandonments – These costs represent an asset impairment and abandonments related to lower distributions of our map3® implant. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Acquisition and integration expenses – These costs relate to acquisition and integration expenses due to the purchase of Zyga and certain other business development activities. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Inventory write-off – These costs relate to an inventory write-off due to the rationalization of our international distribution infrastructure and an inventory write-off related to lower distributions of our map3® implant. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Inventory purchase price adjustment – These costs relate to the purchase price effects of acquired Zyga inventory that was sold during the nine months ended September 30, 2018. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Loss on extinguishment of debt – These costs relate to refinancing our debt. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Gain on cardiothoracic closure business divestiture – This adjustment represents the gain relating to the sale of substantially all of the assets of our CT Business to A&E. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Cardiothoracic closure business divestiture contingency consideration – This adjustment represents the remaining cash contingency consideration received from the sale of substantially all of the assets of our CT Business to A&E. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Tax effect on new tax legislation – This adjustment represents charges relating to the Tax Cuts and Jobs Act tax legislation which was enacted on December 22, 2017. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Material Limitations Associated with the Use of Non-GAAP Financial Measures

EBITDA, Adjusted EBITDA, Adjusted Net Income Applicable to Common Shares, Adjusted Net Income per Common Share – Diluted, and Adjusted Gross Profit should not be considered in isolation, or as a replacement for GAAP measures.

Usefulness of Non-GAAP Financial Measures to Investors

The Company believes that presenting EBITDA, Adjusted EBITDA, Adjusted Net Income Applicable to Common Shares, Adjusted Net Income per Common Share – Diluted and Adjusted Gross Profit in addition to the related GAAP measures provide investors greater transparency to the information used by management in its financial decision-making. The Company further believes that providing this information better enables the Company’s investors to understand the Company’s overall core performance and to evaluate the methodology used by management to assess and measure such performance.

RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Revenues
(Unaudited, in thousands)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
Revenues: (In thousands)
Spine $ 20,741 $ 18,131 $ 58,938 $ 57,888
Sports 12,271 12,723 39,896 41,852
OEM 30,092 28,779 91,382 81,904
International 5,960 5,715 19,423 18,939
Cardiothoracic – 1,340 – 8,164
Total revenues $ 69,064 $ 66,688 $ 209,639 $ 208,747
RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
September 30, December 31,
2018 2017
Assets
Cash $ 10,022 $ 22,381
Accounts receivable – net 44,141 35,081
Inventories – net 103,891 111,927
Prepaid and other assets 8,613 16,285
Total current assets 166,667 185,674
Property, plant and equipment – net 77,344 79,564
Goodwill 62,864 46,242
Other assets – net 43,222 34,426
Total assets $ 350,097 $ 345,906
Liabilities and Stockholders’ Equity
Accounts payable $ 19,282 $ 18,252
Accrued expenses and other current liabilities 27,111 30,478
Current portion of long-term obligations – 4,268
Total current liabilities 46,393 52,998
Deferred revenue 1,968 3,741
Long-term liabilities 54,780 43,507
Total liabilities 103,141 100,246
Preferred stock 66,180 63,923
Stockholders’ equity:
Common stock and additional paid-in capital 427,271 425,132
Accumulated other comprehensive loss (6,980 ) (6,329 )
Accumulated deficit (239,515 ) (237,066 )
Total stockholders’ equity 180,776 181,737
Total liabilities and stockholders’ equity $ 350,097 $ 345,906
RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Three Months Nine Months
Ended September 30, Ended September 30,
2018 2017 2018 2017
Cash flows from operating activities:
Net income (loss) $ 3,104 $ 17,486 $ (3,321 ) $ 13,925

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization expense 3,726 3,575 10,794 10,704
Stock-based compensation 1,080 2,203 3,650 4,011
Amortization of deferred revenue (1,217 ) (1,141 ) (3,652 ) (3,601 )

Other items to reconcile to net cash (used in) provided by operating activities

 (5,064 ) (35,594 ) 3,536 (27,897 )
Net cash provided by (used in) operating activities 1,629 (13,471 ) 11,007 (2,858 )
Cash flows from investing activities:
Purchases of property, plant and equipment (3,250 ) (3,198 ) (7,106 ) (10,358 )
Patent and acquired intangible asset costs (2,070 ) (279 ) (2,798 ) (2,124 )
Acquisition of Zyga Technology – – (21,000 ) –
Cardiothoracic closure business divestiture 3,000 51,000 3,000 51,000
Net cash (used in) provided by investing activities (2,320 ) 47,523 (27,904 ) 38,518
Cash flows from financing activities:
Proceeds from long-term obligations – 2,000 74,425 6,000
Payments on long-term obligations (4,421 ) (32,000 ) (71,171 ) (39,375 )
Other financing activities 896 (18 ) 1,299 1,415
Net cash (used in) provided by financing activities (3,525 ) (30,018 ) 4,553 (31,960 )
Effect of exchange rate changes on cash and cash equivalents (8 ) 35 (15 ) 195
Net increase (decrease) in cash and cash equivalents (4,224 ) 4,069 (12,359 ) 3,895
Cash and cash equivalents, beginning of period 14,246 13,675 22,381 13,849
Cash and cash equivalents, end of period $ 10,022 $ 17,744 $ 10,022 $ 17,744

Contacts

RTI Surgical, Inc.
Media Contact:
Molly Poarch, +1 224-287-2661
mpoarch@rtix.com
or
Investor Contact:
Nathan Elwell, +1 847-530-0249
nelwell@lincolnchurchilladvisors.com

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Medacta Unveils Two New Kinematic Alignment Options for Knee Replacement Surgery

Posted On November 1, 2018 By OrthoSpineNews In Recon, Regulatory /  

November 01, 2018

CASTEL SAN PIETRO, Switzerland & DALLAS–(BUSINESS WIRE)–Medacta International, the privately held, family-owned global leader in the design of innovative joint replacement and spinal surgery products, today announced it has received clearance from the U.S. Food and Drug Administration (FDA) for the GMK® Sphere – Kinematic Alignment instrumentation and surgical technique for total knee replacement (TKR). The manual instrumentation and technique are components of the new Medacta Individualized Kinematic Alignment (MIKA) offering, which is based on the kinematic alignment surgical approach, an alternative to traditional mechanical alignment for TKR that has demonstrated significant benefits for appropriate knee arthroplasty patients. Medacta collaborated on the development of the instrumentation with renowned orthopedic surgeon Dr. Stephen Howell, a pioneer in kinematically aligned total knee replacement at Adventist Health Lodi Memorial (Lodi, California).

“Kinematic alignment will play a significant role in the future of total knee replacement and is an extremely effective alignment option for most patients,” said Dr. Howell, who has been practicing a version of the technique for over a decade. “This approach, which co-aligns the axes of the components with the three kinematic axes of the native knee, offers many benefits to knee replacement candidates. The kinematic alignment technique has potential for faster recovery, quicker return to normal activities, overall, more comfort with the implant itself, and high long-term implant survival. The use of the caliper technique and the recording of intraoperative checks restores the native joint lines, limb alignment, compartment forces, and laxities of the pre-arthritic knee with high reproducibility with few ligament releases. In working with Medacta, we’ve put together a program that builds on the benefits of this surgical strategy while opening it up to even more surgeons looking to learn and practice the approach.”

The kinematic alignment technique aims to restore normal knee function by resurfacing the femur and tibial articular surfaces to those of the normal or pre-arthritic state. This approach is aimed at achieving optimal patient satisfaction and function, while minimizing damage to the surrounding tissues and ligaments. Studies and patient outcomes are starting to create awareness that kinematic alignment may offer benefits for appropriate knee arthroplasty patients.

Kinematic Alignment will be an addition to Medacta’s efforts towards personalized solutions and to the GMK Sphere Total Knee System, a medially stabilized design that facilitates taking full advantage of the kinematic approach due to its intrinsic design features.

Medacta looks to change the accessibility of kinematic alignment by providing dedicated educational tools through the M.O.R.E. Institute as well as new instrumentation. In addition to traditional metal instrumentation, a dedicated planning protocol for patient-specific instruments (MyKnee®) will allow surgeons to ease into the technique through the use of surgeon-specified parameters.

“Medacta is committed to cutting-edge medicine and new surgical approaches that advance orthopedics, focusing on personalized medicine and improving the overall patient experience,” said Francesco Siccardi, Chief Executive Officer of Medacta International. “Our success in this area stems from our steadfast dedication to surgeon education, particularly around new strategies like Kinematic Alignment. Similar to how we disseminated the anterior approach to hip surgery through our AMIS education program, the MIKA procedure will be a new discipline within our M.O.R.E. Institute, as we look to bring this promising innovation – and all of its patient benefits – into the mainstream.”

This innovation will be on display at the 2018 American Association of Hip and Knee Surgeons (AAHKS) Annual Meeting this week in Dallas and will launch more broadly in Spring 2019. Visit Medacta at Booth #215 onsite at AAHKS to see the new GMK Sphere – Kinematic Alignment instrumentation and explore the company’s full portfolio of orthopedic technologies.

About Medacta International

Medacta International is a world leading company, developer and supplier, specializing in joint replacement, spine surgery, and sports medicine solutions. Medacta’s revolutionary approach and responsible innovation, focusing on Minimally Invasive Solutions and Personalized Medicine, have resulted in standard of care breakthroughs in hip replacement with the AMIS® system and total knee replacement with MyKnee® patient matched technology. Medacta has grown dramatically by taking a different approach and placing value on all aspects of the care experience from design to training to sustainability. Medacta is headquartered in Castel San Pietro, Switzerland, operates in over 30 countries around the globe, and employs more than 930 people. To learn more about Medacta International, please visit www.medacta.com or follow @Medacta on Twitter and LinkedIn.

Contacts

For Medacta International
Emy Gruppo, 203-247-5856
emy@torchcomllc.com

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DJO® Announces Industry-First Risk Assessment Tool To Confirm Outpatient Joint Replacement Pathways

Posted On November 1, 2018 By OrthoSpineNews In Recon /  

November 01, 2018

DALLAS–(BUSINESS WIRE)–DJO, a leading provider of medical technologies designed to get and keep people moving, announced today the availability of the industry’s first Outpatient Arthroplasty Risk Assessment tool, the OaraScore™. The easy-to-use software tool provides medical professionals with the information needed to assess the appropriate post-operative length of stay after total joint arthroplasty (TJA).

The ability to identify patients for outpatient joint replacement surgery with a validated and consistent tool is essential to any rapid discharge program. With the removal of total knee arthroplasty (TKA) procedures from the Centers for Medicare & Medicaid Services (CMS) inpatient-only list, hospitals need effective tools to determine the appropriate patient length of stay and to minimize re-admission rates, two major drivers of cost in the TJA episode of care.

Among the more well-known factors leading to the shift of TJAs to the outpatient ambulatory setting are:

  • Improvements in implant technology and medical techniques;
  • Growing evidence that joint replacement surgeries can be performed safely and cost-effectively without an inpatient hospitalization; 1
  • Increasing consumer demand for care in lower-cost settings as well as a preference for at-home recovery. 2

The commercial introduction of the OaraScore was announced at the 2018 Annual Meeting of American Association of Hip and Knee Surgeons (AAHKS, Booth # 510).

The OaraScore is part of DJO’s industry-leading healthcare solutions platform, MotionMD®. The subscription-based, Software-as-a-Service (SaaS) tool was developed for DJO leading proprietary implant technologies such as the EMPOWR Knee™ and Hip Systems but can also be used for other implant systems. The OaraScore was developed in partnership with R. Michael Meneghini, MD, Director of Orthopaedics and Joint Replacement and Peter Caccavallo, MD, Medical Director of Peri-Operative Medicine, both from Indiana University Health Saxony Hospital.

The OaraScore utilizes a validated, multi-disciplinary algorithm that was featured in a peer-reviewed study published in The Journal of Arthroplasty in August 2017 by Dr. Michael Meneghini. The retrospective study, “Safe Selection of Outpatient Joint Arthroplasty Patients with Medical Risk Stratification: The “Outpatient Arthroplasty Risk Assessment Score” revealed a patient’s OaraScore for total joint replacement more precisely predicted the ability for the patient to discharge home the same day or the next morning than existing risk tools, such as ASA and CCI.3

“Surgeons generally have a good sense of which patients will do well in an outpatient or rapid discharge environment,” said Dr. Peter Caccavallo. “OaraScore allows the medical professionals to move beyond that standard and utilize a scientifically sound and consistent approach to risk stratification.”

The utility and favorability of the tool has also been independently validated in an AAHKS podium presentation by Duke University researchers in 2016 and in an independent study by New York University Langone Medical Center (link) published in The Journal of Arthroplasty in August 2018.4,5

While several factors lead to OaraScore’s improved effectiveness, a key differentiator is that OaraScore™ is the first patient selection tool developed specifically for total joint replacement patients.

“Previous risk stratification tools looked at more superficial measures like patient motivation, home support and pre-operative physical and mental condition,” said Jeffery A. McCaulley, Global President of DJO Surgical®. “OaraScore is the only clinically validated, peer reviewed risk stratification tool for total joint arthroplasty, and its values are derived by evaluating nine critical co-morbidity factors and overall medical conditions, all in real time.”

In addition to utilizing OaraScore to determine if patients are low risk or high risk for outpatient joint replacement surgery, the software also tracks readmission rates and compares data to all other physicians utilizing the tool. All confidential patient data remains encrypted throughout the process.

“OaraScore provides medical professionals with a more consistent and verifiable methodology to reliably and safely base admission decisions,” said McCaulley. “Considering the flexibility, portability and ease of use of this tool, we believe OaraScore could become the standard of clinical practice.”

MotionMD® is an intuitive, web-based, point-of-care software solution designed to support claims management and inventory dispensing. This automated paperless solution can fully integrate with electronic medical records (EMR), electronic ordering, billing and practice management systems. The solution is designed to help orthopedic clinics improve patient satisfaction, better manage billing compliance and streamline workflow by providing seamless interoperability with clinic records. In October 2018, Motion MD has processed more than 1.5 million patient agreements since it launched in 2016.

On Thursday, November 1, 2018, at DJO Surgical’s Industry symposium in conjunction with the AAHKS 2018 Annual Meeting, Dr. Meneghini will present a more expansive data set from his previous August 2017 study while discussing outpatient total joint arthroplasty and patient selection.

For more information about OaraScore, please visit: djoglobal.com/oarascore

1. Barad, Steven J., Stephen M. Howell, and Joyce Tom. “Is a shortened length of stay and increased rate of discharge to home associated with a low readmission rate and cost-effectiveness after primary total knee arthroplasty?.” Arthroplasty today 4, no. 1 (2018): 107-112.

2. Rovinsky, Michael; Looby, Sean, and Zacchigna, Laura. “The shift to outpatient TKA – what’s the big deal?.” HFM Magazine July 2018.

3. Meneghini, R. Michael, Mary Ziemba-Davis, Marshall K. Ishmael, Alexander L. Kuzma, and Peter Caccavallo. “Safe selection of outpatient joint arthroplasty patients with medical risk stratification: the “outpatient arthroplasty risk assessment score”.” The Journal of arthroplasty 32, no. 8 (2017): 2325-2331.

4. Henderson, Robert, et al. “External Clinical Validation of the OARA Score for Outpatient Joint Arthroplasty Candidates”. Podium Presentation at AAHKS Meeting 2016, Paper #26.

5. Kim, Kelvin Y., James E. Feng, Afshin A. Anoushiravani, Edward Dranoff, Roy I. Davidovitch, and Ran Schwarzkopf. “Rapid Discharge in Total Hip Arthroplasty: Utility of the Outpatient Arthroplasty Risk Assessment Tool in Predicting Same-Day and Next-Day Discharge.” The Journal of arthroplasty (2018).

Dr. R. Michael Meneghini is a consultant for DJO Global.

Dr. Peter Caccavallo is a consultant for DJO Global.

About DJO®

DJO® is a leading global developer, manufacturer and distributor of high-quality medical devices that provide solutions for musculoskeletal health, vascular health and pain management. The Company’s products address the continuum of patient care from injury prevention to rehabilitation after surgery, injury or from degenerative disease, enabling people to regain or maintain their natural motion. Its products are used by orthopedic specialists, spine surgeons, primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers and other healthcare professionals.

In addition, many of the Company’s medical devices and related accessories are used by athletes and patients for injury prevention and at-home physical therapy treatment. The Company’s product lines include rigid and soft orthopedic bracing, hot and cold therapy, bone growth stimulators, vascular therapy systems and compression garments, therapeutic shoes and inserts, electrical stimulators used for pain management and physical therapy products. The Company’s surgical division offers a comprehensive suite of reconstructive joint products for the hip, knee and shoulder. DJO Global’s products are marketed under a portfolio of brands including Aircast®, Chattanooga®, CMF™, Compex®, DonJoy®, ProCare®, DJO Surgical®, Dr. Comfort® and Exos®. For additional information on the Company, please visit www.DJOGlobal.com.

Contacts

DJO
Ashley Brown, 512-348-9098
Marketing Communications Manager
ashley.brown@djoglobal.com

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DJO® Unveils Two Additional Products, Further Expanding the Breadth of the EMPOWR Knee System®

Posted On November 1, 2018 By OrthoSpineNews In Recon, Top Stories /  

November 01, 2018

DALLAS–(BUSINESS WIRE)–DJO, a leading provider of medical technologies designed to get and keep people moving, introduced the EMPOWR Porous™ Knee System and EMPOWR™ Complex Primary Knee System at the 2018 Annual Meeting of the American Association of Hip and Knee Surgeons (AAHKS) today (Booth # 510). These new additions to the EMPOWR™ Knee Platform expand one of the industry’s most modern total knee replacement systems, which now offers primary, cementless primary, complex primary, and tibial revision solutions for surgeons and patients.

EMPOWR Porous Knee System is based on two decades of clinical experience and highly porous materials designed to enhance early implant fixation, while creating an ideal environment for both immediate and long-term biologic fixation.1 DJO’s industry leading surface coating technologies, including DJO’s proprietary, highly porous coating, P2™ aids in bone apposition for superior in-growth performance.1 EMPOWR Porous’ bladed keel has a bone sparing geometry optimized for cementless application.2 The bladed keel of the asymmetric baseplate was developed to provide robust fixation, while the cruciform pegs provide initial component fixation and durable rotational stability.2

EMPOWR Complex Primary Knee System, with the EMPOWR Universal Tibial Baseplate and EMPOWR Varus Valgus Constraint (VVC) Tibial Insert expand the utility of the EMPOWR Knee Platform and provide a wider range of solutions for complex primary and revision knee arthroplasty. These new implant technologies are designed to provide an efficient and seamless transition from standard primary to revision knee procedures, with a minimal number of additional instruments and trays. The EMPOWR Universal Tibial baseplate maintains the EMPOWR System’s characteristic asymmetric footprint which maximizes cortical coverage and prevents component overhang to ensure long-term fixation without tissue irritation4. This baseplate also provides the ability to stem and augment when more supplementary fixation is required. The VVC insert is offered in e+™ polyethene, formulated to reduce long-term wear3, while the insert is designed to provide the necessary support and stability in knees with supportive soft tissue deficiencies.

“DJO has a proven record of bringing high quality products to market with incredible cadence – faster than any other implant company today,” said Dr. Eugene S. Krauss, orthopedic surgeon with Northwell Health. “In 2018 alone, the EMPOWR Porous Knee and EMPOWR Complex Primary Knee launches have significantly expanded our ability to treat a wide variety of patients in our practices.”

“The efficiency of DJO’s instrument trays and the streamlined instrumentation enables my surgical team and I to perform up to 12 knee replacements in a single day, making the system well-suited for both hospital and ambulatory surgery center environments,” said Dr. Krauss.

Over the past decade, the science of highly porous metals, including DJO’s P2, has significantly advanced, helping to improve implant longevity and ultimately patient outcomes. These scientific advancements coupled with a younger, healthier patient population, have resulted in a resurgence of cementless knee arthroplasty. Therefore, the contemporary design of the EMPOWR Porous Knee, is certain to have a meaningful impact on the market.

“DJO Surgical’s strong growth over the past few years is a reflection of our commitment to developing products and solutions that help improve clinical outcomes and enhance patient experience,” said Jeffery A. McCaulley, Global President of DJO Surgical®. “Our continued expansion of the EMPOWR Platform reflects the overwhelmingly positive reaction we’ve received from surgeons and patients since the first EMPOWR Knee System was launched here at AAHKS in 2015.”

The complete line of products in the EMPOWR Platform include:

  • EMPOWR 3D Knee® System
  • EMPOWR PS Knee® System
  • EMPOWR CR Knee® System
  • EMPOWR Porous™ Knee System
  • EMPOWR™ Complex Primary Knee System

For more information about the EMPOWR Porous Knee System, the EMPOWR Complex Primary Knee System or the entire EMPOWR Knee Platform, visit https://www.djoglobal.com/empowr or at AAHKS Booth # 510.

Dr. Eugene S. Krauss is a paid consultant for DJO® Global.

1.

P2™ Testing Summary 0020327-001 Rev A 10/14

2.

Bhimji, Safia, and R. Michael Meneghini. “Micromotion of cementless tibial baseplates: keels with adjuvant pegs offer more stability than pegs alone.” The Journal of arthroplasty 29, no. 7 (2014): 1503-1506.

3.

e+™ Surgeon Testing Summary 0011110-004

4.

Dai, Yifei, Giles R. Scuderi, Jeffrey E. Bischoff, Kim Bertin, Samih Tarabichi, and Ashok Rajgopal. “Anatomic tibial component design can increase tibial coverage and rotational alignment accuracy: a comparison of six contemporary designs.” Knee Surgery, Sports Traumatology, Arthroscopy 22, no. 12 (2014): 2911-2923.

About DJO®

DJO® is a leading global developer, manufacturer and distributor of high-quality medical devices that provide solutions for musculoskeletal health, vascular health and pain management. The Company’s products address the continuum of patient care from injury prevention to rehabilitation after surgery, injury or from degenerative disease, enabling people to regain or maintain their natural motion. Its products are used by orthopedic specialists, spine surgeons, primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers and other healthcare professionals.

In addition, many of the Company’s medical devices and related accessories are used by athletes and patients for injury prevention and at-home physical therapy treatment. The Company’s product lines include rigid and soft orthopedic bracing, hot and cold therapy, bone growth stimulators, vascular therapy systems and compression garments, therapeutic shoes and inserts, electrical stimulators used for pain management and physical therapy products. The Company’s surgical division offers a comprehensive suite of reconstructive joint products for the hip, knee and shoulder. DJO Global’s products are marketed under a portfolio of brands including Aircast®, Chattanooga®, CMF™, Compex®, DonJoy®, ProCare®, DJO Surgical®, Dr. Comfort® and Exos®. For additional information on the Company, please visit www.DJOGlobal.com.

Contacts

DJO
Ashley Brown
Marketing Communications Manager
512.348.9098
ashley.brown@djoglobal.com

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Zimmer Biomet Appoints Ivan Tornos as Group President, Orthopedics

Posted On November 1, 2018 By OrthoSpineNews In Extremities /  

WARSAW, Ind., October 31, 2018 – Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH), a global leader in musculoskeletal healthcare, today announced Ivan Tornos, previously Worldwide President for Urology/Medical and Critical Care at Becton, Dickinson and Company (NYSE: BDX), will join Zimmer Biomet as Group President, Orthopedics, effective November 1, 2018.

“Ivan is a great addition to our leadership team, bringing deep medical technology expertise and a strong history of successfully managing complex businesses across several continents,” said Bryan Hanson, President and CEO of Zimmer Biomet. “Ivan’s exceptional track record of executing on commercial strategies and driving growth and profitability will be critical to Zimmer Biomet as we continue our focus on achieving sustained performance in the business.”

Mr. Tornos comes to Zimmer Biomet having served for more than two decades in various global roles for Fortune 50 to 500 companies. In this newly created position, Mr. Tornos will be responsible for increased innovation, implementation and execution of the Orthopedics group, which will include our large joint, sports, extremities and trauma (S.E.T.) businesses as well as our Americas region.

About Ivan Tornos
Prior to joining Zimmer Biomet, Mr. Tornos served as Worldwide President of the Global Urology/Medical and Critical Care Division of Becton, Dickinson and Company.  Prior to that, he was with C.R. Bard, most recently serving as President, Europe, Middle East and Africa Regions. Before joining C.R. Bard, Mr. Tornos served as Vice President and General Manager of the Americas Pharmaceutical and Medical/Imaging Segments of Covidien International.  Before that, Mr. Tornos served as International Vice President, Business Development and Strategy with Baxter International Inc. and prior to that, he spent 11 years with Johnson & Johnson in positions of increasing responsibility.

Mr. Tornos is an alumnus of the Harvard Business School having graduated from the Advanced Management Program (AMP 187) and also completed Leadership and Management programs at the Cox School of Business of Southern Methodist University.  He finalized post-MBA work at the Wharton School of the University of Pennsylvania (CPD Marketing/Finance), holds an MBA from the University of Miami School of Business and a BBA in Finance and International Marketing and Management from the University of Georgia Terry College of Business.

About Zimmer Biomet
Founded in 1927 and headquartered in Warsaw, Indiana, Zimmer Biomet is a global leader in musculoskeletal healthcare. We design, manufacture and market orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; office-based technologies; spine, craniomaxillofacial and thoracic products; dental implants; and related surgical products.

We collaborate with healthcare professionals around the globe to advance the pace of innovation. Our products and solutions help treat patients suffering from disorders of, or injuries to, bones, joints or supporting soft tissues. Together with healthcare professionals, we help millions of people live better lives.

We have operations in more than 25 countries around the world and sell products in more than 100 countries. For more information, visit www.zimmerbiomet.com.

Cautionary Statement Regarding Forward-Looking Statements 
This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements concerning Zimmer Biomet’s expectations, plans, prospects, and product and service offerings, including new product launches and potential clinical successes. Such statements are based upon the current beliefs and expectations of management and are subject to significant risks, uncertainties and changes in circumstances that could cause actual outcomes and results to differ materially. For a list and description of some of such risks and uncertainties, see Zimmer Biomet’s periodic reports filed with the U.S. Securities and Exchange Commission (SEC). These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in Zimmer Biomet’s filings with the SEC. Forward-looking statements speak only as of the date made. Zimmer Biomet disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers of this release are cautioned not to rely on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. This cautionary statement is applicable to all forward-looking statements contained in this release.

Contacts:

Media
Monica Kendrick
574-372-4989
monica.kendrick@zimmerbiomet.com

Investors
Coleman Lannum
574-371-9480
cole.lannum@zimmerbiomet.com

Derek Davis
574-372-4250
derek.davis@zimmerbiomet.com

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BONESUPPORT HOLDING AB (publ) – Q3 2018 Interim Report – invitation to conference call and webcast

Posted On November 1, 2018 By OrthoSpineNews In Financial /  
Lund, Sweden, 08.00 CET, 1 November 2018 – BONESUPPORT™, an emerging leader in orthobiologics for the management of bone voids will publish its Q3 2018 Interim Report on Wednesday 7 November 2018 at 8am CET. The Company will hold a conference call and an online presentation on the same day at 10am CET. The call will be hosted by Emil Billbäck, CEO and Björn Westberg, CFO who will present the results and answer questions. The presentation will be held in English.
 
The dial-in numbers for the conference call are:
UK: +442030089804
SE: +46856642662
US: +18558315948
 
The presentation will be webcasted and can be accessed from the following web address: 
https://tv.streamfabriken.com/bonesupport-q3-2018
 
 
About BONESUPPORT™
BONESUPPORT is an innovative commercial stage orthobiologics company, based in Lund, Sweden. The Company develops and commercializes innovative injectable bio-ceramic bone graft substitutes that remodel to the patient’s own bone and have the capability of eluting drugs directly into the bone void.
 
BONESUPPORT’s bio-ceramic bone graft substitutes CERAMENT® BONE VOID FILLER (BVF), CERAMENT® G* and CERAMENT® V* are all based on the Company’s novel and proprietary technology platform.
 
The Company’s products are targeting a large addressable market opportunity across trauma, chronic osteomyelitis (bone infection), revision arthroplasty (replacement of a joint prosthesis), ortho-oncology and foot and ankle.
 
BONESUPPORT’s total sales increased from SEK 62 million in 2015 to SEK 129 million in 2017, representing a compound annual growth rate of 45%.
 
BONESUPPORT is currently conducting two important clinical trials to generate data demonstrating the clinical and health economic benefits its products deliver. The first trial, CERTiFy, is comparing CERAMENT BVF with autograft, the most widely used approach for managing bone voids. Top line results from this study are due to be announced at the end of 2018. The FORTIFY study is assessing CERAMENT G’s ability to improve on the standard-of-care management of patients with open fractures of the tibial diaphysis. The primary endpoints of the trial will include the absence of deep infection at the fracture site and a reduction in the number of secondary procedures intended to promote fracture union. Data from this study will be used for a planned Premarket approval filing with FDA in 2020.
 
The Company’s research and development is focused on extending the use of its CERAMENT technology into further indications via the incorporation of additional drugs and therapeutic agents. The Company currently has a pipeline of pre-clinical product candidates that have been designed to promote bone growth.
 
BONESUPPORT is also preparing to expand its product offering in the US and has entered into strategic agreements with Collagen Matrix Inc. and MTF Biologics to gain access to products that are complementary to CERAMENT BVF.
 
BONESUPPORT is listed on Nasdaq Stockholm and trades under the ticker “BONEX” (ISIN code: SE0009858152). Further information is available at www.bonesupport.com.
 
*CERAMENT G: Not available in the United States, for investigational use only.
  CERAMENT V: Not available in the United States.
 
BONESUPPORT® and CERAMENT® are registered trademarks.
For more information contact:
 
BONESUPPORT AB
Emil Billbäck, CEO
+46 (0) 46 286 53 70
 
Björn Westberg, CFO
+46 (0) 46 286 53 60
 
Citigate Dewe Rogerson
David Dible, Shabnam Bashir, Pip Batty
+44 (0)20 7282 1022
The information was submitted for publication, through the agency of the contact person set out above, at 08.00 CET on 1 November 2018.
 
 
Pip Batty
Account Manager
 
CDR LOGO NEW
3 London Wall Buildings
London Wall
London EC2M 5SY
Tel: +44 (0)20 7282 1022
Mob: +44 (0)7808 642 922
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Innovasive™ Granted FDA Clearance for DualX™ Expanding Interbody Spinal Device

Posted On October 31, 2018 By OrthoSpineNews In Regulatory, Spine /  

MISSION VIEJO, CALIF. (PRWEB) OCTOBER 31, 2018

Innovasive, a privately-held spinal device company, focuses on developing and commercializing minimally-invasive, innovative spinal technologies. Today, Innovasive announced that they have received 510(k) clearance from the U.S. Food and Drug Administration (FDA) to market their DualX technology, a titanium, dual expanding, interbody device for spinal fusion procedures in the lumbar spine.

“DualX is a unique expandable interbody that expands in two independent directions,” explained Andy Choi, Chief Executive Officer, Innovasive, Inc. “First, it expands laterally to provide a wide base for stability and spinal support. DualX then expands vertically with lordosis to aide in the restoration of sagittal alignment of the lumbar spine.”

The DualX technology is comprised of a family of titanium expandable interbody devices designed to be used in transforaminal lumbar interbody fusion (TLIF), posterior lumbar interbody fusion (PLIF) and lateral lumbar interbody fusion (LLIF) spinal procedures. The product portfolio contains varying footprints, heights and degrees of lordosis with post-expansion bone grafting to provide a customized anatomical fit for a clinically successful fusion environment.

“The ability of DualX to provide expansion in two planes is essential for achieving a successful surgical outcome. DualX accomplishes the goals of creating a biomechanically stable environment for spinal fusion, as well as supporting normal sagittal and coronal alignment; both of which are essential factors for restoring optimal spinal balance. These critical factors will help spine surgeons achieve the primary goals of performing surgeries that lead to successful, minimally invasive spinal fusion procedures.” said, Jeffrey Roh, MD, MBA, MSc, Director of Minimally Invasive Spine Surgery at the Swedish Neuroscience Institute in Seattle, WA.

“We are excited to receive FDA clearance and look forward to a successful product launch in the near future,” said Mr. Choi. DualX will be available for implantation in spinal fusion procedures before the end of this year.

About Innovasive 

Innovasive, Inc. is a privately-held spinal device company located in Mission Viejo, CA. The Company focuses on developing and commercializing innovative, minimally-invasive technologies for spine surgery. Innovasive is a portfolio company of IntuitiveX, a life science innovation incubator.

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Stimwave Receives FDA Clearance for World’s Only Opioid Free Pain Management Wireless System iPhone-iWatch Controllers

Posted On October 31, 2018 By OrthoSpineNews In Regulatory /  

October 31, 2018

POMPANO BEACH, Fla.–(BUSINESS WIRE)–Stimwave Technologies, the leading innovator of wireless medical device bioelectronic technology, today announced that it has received FDA clearance for the WaveCrest MobileTM iOS Platform patient controllers for opioid free pain management. This revolutionary new system now gives patients iPhone® and Apple Watch® mobile control over WaveMasterTM multi-waveform automated programming for the Wireless Freedom Spinal Cord Stimulator (SCS) System for relief of chronic pain. The Freedom SCS System is the world’s first wireless, fully-programmable SCS neuromodulation device providing a life-changing technological breakthrough for the more than 90 million people in the U.S. who endure daily chronic back and leg pain.

WaveCrest Mobile allows a patient to use an iPhone, iPod touch®, or Apple Watch to adjust their pain relief therapy. This is the first FDA-cleared software that allows the AppleWatch to control a neuromodulation device implanted inside the body. The software is designed to be easy to use and secure. WaveCrest Mobile enables pain sufferers to fine-tune the power level, visualize battery life, and modify programs that were pre-programmed by their clinician to control pain without opioids.

“Pain suffers are rapidly migrating to the Stimwave Freedom wireless pain relief system as an opioid free option to control their pain- and now they can adjust their therapy with the swipe of their finger through their Apple Watch or iPhone/iPod Touch discretely any time as needed,” said Stimwave Chairman and CEO Laura Tyler Perryman. “Transformation of pain treatment moving from opioids and pills to interventional solutions like Stimwave can only happen as a result of empowering the masses to take control of their pain, which is now as easy as 1-2-3 with WaveCrest Mobile.”

Stimwave’s Freedom Stimulators are implanted in an outpatient procedure with no need for general anesthesia, a large surgical incision or a bulky internal battery known to lead to numerous complications from other legacy older technologies. These products are expected to significantly reduce the lifetime cost of care for chronic pain patients and offer a safe, viable and effective alternative to opioids.

“Patients’ needs in pain management are unique and customized programming is a must. The Freedom System not only is the smallest option available for patients eliminating the complexities of an implanted lithium ion battery, but offers a wide variety of advanced programming features that the patient can choose through their mobile device,” said Dr. Ellen Lin, M.D., medical director of San Antonio’s Advanced Spine and Pain Center. “WaveCrest Mobile provides patients with a high-tech approach to controlling their pain through their mobile device and future features and upgradeability options they never had before.”

Utilizing the Stimwave Freedom System, clinicians utilize an iPad application to easily program the system using WaveMaster advanced therapy waveforms offering the ability to easily and quickly provide patients with the widest array of programming waveforms, frequencies and combinations of options to ensure long term pain relief, all selectable from the AppleWatch or iPhone controller.

Apple and iPhone are trademarks of Apple Inc. registered in the U.S. and other countries.

About Stimwave

Stimwave Technologies Incorporated is a privately held medical device company engaged in the development, manufacture, and commercialization of wirelessly powered, injectable, microtechnology neurostimulators, providing patients with a convenient, safe, minimally invasive, and highly cost-effective pain management solution that is easily incorporated into their daily lives. Stimwave’s goal is to evolve its patented, cutting-edge platform into the default for neuromodulation, increasing the accessibility for patients worldwide while lowering the economic impact of pain management. www.stimwave.com

Contacts

GlodowNead Communications
Rosemary O’Brien, 415-394-6500
StimwavePR@GlodowNead.com

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OrthoPediatrics Corp. Reports Third Quarter 2018 Financial Results

Posted On October 31, 2018 By OrthoSpineNews In Financial /  

WARSAW, Ind., Oct. 31, 2018 (GLOBE NEWSWIRE) — OrthoPediatrics Corp. (NASDAQ: KIDS), a company exclusively focused on advancing the field of pediatric orthopedics, today announced financial results for the third quarter ended September 30, 2018 and increased revenue guidance for full year 2018.

Third Quarter & Recent Highlights

  • Increased total revenue to $15.8 million for third quarter 2018, up 27.8% from $12.4 million in third quarter 2017
  • Deployed $2.3 million of consignment sets during the third quarter 2018
  • Converted Canada to sales agency model
  • Fully launched Pediatric Nailing Platform | FEMUR and announced expanded indications for FIREFLY® Pedicle Screw Navigation Guides, patient-specific, 3D printed guides, in July
  • Received FDA 510(k) clearance for 26th surgical system, RESPONSE 4.5/5.0mm System, to treat smaller stature, younger patients with complex scoliosis in October
  • Increased revenue growth guidance to a range of 25.0% to 25.5% and investment in consignment sets to $12.0 million for full year 2018

Mark Throdahl, Chief Executive Officer of OrthoPediatrics, stated, “Our strong performance represents another consecutive quarter of record revenues, driven by continued strength across all segments of our business. In the third quarter, we further consolidated our leading position in pediatric orthopedics with particularly strong domestic sales, led by our U.S. scoliosis business and reflecting the initial benefits from increased investment in consigned sets. With the additional $2.3 million of set deployment during the quarter, we continue to address the robust demand for our surgical systems. Furthermore, our demonstrated ability to develop a consistent cadence of innovative products provides further expansion opportunities. We are very pleased with our steady execution that led to another quarter of outperformance and supports our increased guidance for the full year.”

Third Quarter 2018 Financial Results

Total revenue for the third quarter 2018 was $15.8 million, representing 27.8% growth, compared to total revenue of $12.4 million for the third quarter 2017. U.S. revenue for the third quarter of 2018 increased 30.0% to $12.4 million, compared to $9.6 million for the same period last year, and represented 78.5% of total revenue. International revenue increased 20.6% to $3.4 million, compared to $2.8 million for the same period last year and represented 21.5% of total revenue.

Trauma and Deformity revenue for third quarter 2018 increased 21.0% to $10.6 million compared to $8.7 million for the same period last year. Scoliosis revenue increased 52.4% to $5.0 million compared to $3.3 million for the third quarter 2017. Sports Medicine/Other revenue for the third quarter of 2018 decreased 33.2% to $0.2 million compared to $0.3 million for the same period last year.

Gross profit for the third quarter of 2018 was $12.0 million, a 26.2% increase compared to $9.5 million for the same period last year. Gross profit margin for the third quarter of 2018 was 75.7%, compared to 76.7% for the same period last year due to lower international margins.

Total operating expenses for the third quarter of 2018 were $13.1 million, a 28.3% increase compared to $10.2 million for the same period last year. The increase in operating expenses was driven by a 26.9% increase in sales and marketing, including higher commissions, and unusually higher, non-recurring professional fees associated with legal expense. Operating loss for the quarter increased to ($1.2) million from ($0.8) million for the same period last year.

Net interest expense for the third quarter of 2018 was $0.6 million, a 20.1% decrease compared to $0.8 million for the same period last year.

Net loss attributable to common stock holders for the period was ($1.9) million, compared to ($3.0) million for the third quarter of 2017. Net loss per share attributable to common stockholders for the third quarter of 2018 was ($0.15) per basic and diluted share compared to ($1.70) per basic and diluted share for the same period prior year.

Adjusted EBITDA for the third quarter of 2018 was $1.0 million as compared to $0.3 million for the third quarter of 2017. The change was primarily driven by the significant increase in revenue. See below for additional information and a reconciliation of non-GAAP financial information.

The weighted average number of diluted shares outstanding as of September 30, 2018 was 12,624,858 shares.

In the third quarter of 2018, our independent sales agencies in the United States employed 86 full-time equivalent sales representatives specifically focused on pediatrics.

Purchases of property and equipment during the third quarter of 2018 were essentially flat at $1.1 million when compared to the same period last year, reflecting the deployment of consigned sets that included procedure specific implants, instruments, and cases and trays. Including the implants, $2.3 million of consigned sets were deployed during the third quarter of 2018. This compared to $2.2 million during the third quarter of 2017 most of which were international set sales due to the conversion to an agency model from a stocking distributor in select markets.

As of September 30, 2018, cash and cash equivalents were $24.5 million, compared to $26.5 million as of June 30, 2018, and the Company had approximately $25.4 million in total outstanding indebtedness, including $3.9 million outstanding under the revolving credit facility.

Full Year 2018 Financial Guidance

OrthoPediatrics is updating financial guidance for the full year 2018, as follows:

  • Revenue growth in a range of 25.0% to 25.5%, up from prior guidance of 23% to 24%.
  • Consigned set investments of approximately $12.0 million, up from prior guidance of $11.0 million.

Conference Call

OrthoPediatrics will host a conference call on Thursday, November 1, 2018, at 8:00 a.m. ET to discuss the results. The dial-in numbers are (855) 289-4603 for domestic callers and (614) 999-9389 for international callers. The conference ID number is 6099725. A live webcast of the conference call will be available online from the investor relations page of the OrthoPediatrics’ corporate website at www.orthopediatrics.com.

A replay of the webcast will remain available on OrthoPediatrics’ website, www.orthopediatrics.com, until the Company releases its full year 2018 financial results. In addition, a telephonic replay of the call will be available until November 8, 2018. The replay dial-in numbers are (855) 859-2046 for domestic callers and (404) 537-3406 for international callers. Please use the replay conference ID number 6099725.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of U.S. federal securities laws. You can identify forward-looking statements by the use of words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “believe,” “estimate,” “project,” “target,” “predict,” “intend,” “future,” “goals,” “potential,” “objective,” “would” and other similar expressions. Forward-looking statements involve risks and uncertainties, many of which are beyond OrthoPediatrics’ control. Important factors could cause actual results to differ materially from those in the forward-looking statements, including, among others, the risks, uncertainties and factors set forth under “Risk Factors” in OrthoPediatrics’ Annual Report on Form 10-K filed with the SEC on March 15, 2018. Forward-looking statements speak only as of the date they are made. OrthoPediatrics assumes no obligation to update forward-looking statements to reflect actual results, subsequent events, or circumstances or other changes affecting such statements except to the extent required by applicable securities laws.

Use of Non-GAAP Financial Measures

This press release includes the non-GAAP financial measure of Adjusted EBITDA, which differs from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Adjusted EBITDA in this release represents net loss, plus interest expense (income), net plus other expense (income), depreciation and amortization, stock-based compensation expense, accelerated vesting of restricted stock upon our IPO, public company costs and initial public offering costs. Adjusted EBITDA is presented because the Company believes it is a useful indicator of its operating performance. Management uses the metric as a measure of the Company’s operating performance and for planning purposes, including financial projections. The Company believes this measure is useful to investors as supplemental information because it is frequently used by analysts, investors and other interested parties to evaluate companies in its industry. The Company believes Adjusted EBITDA is useful to its management and investors as a measure of comparative operating performance from period to period. Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to, or superior to, net income or loss as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP, and it should not be construed to imply that the Company’s future results will be unaffected by unusual or non-recurring items. In addition, the measure is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect certain cash requirements such as debt service requirements, capital expenditures and other cash costs that may recur in the future. Adjusted EBITDA contains certain other limitations, including the failure to reflect our cash expenditures, cash requirements for working capital needs and other potential cash requirements. In evaluating Adjusted EBITDA, you should be aware that in the future the Company may incur expenses that are the same or similar to some of the adjustments in this presentation. The Company’s presentation of Adjusted EBITDA should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on the Company’s GAAP results in addition to using Adjusted EBITDA on a supplemental basis. The Company’s definition of this measure is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation. The schedules below contain a reconciliation of Net Loss to non-GAAP Adjusted EBITDA.

About OrthoPediatrics Corp.

Founded in 2006, OrthoPediatrics is an orthopedic company focused exclusively on providing a comprehensive product offering to the pediatric orthopedic market to improve the lives of children with orthopedic conditions. OrthoPediatrics currently markets 25 surgical systems that serve three of the largest categories within the pediatric orthopedic market. This offering spans trauma & deformity, scoliosis, and sports medicine/other procedures. OrthoPediatrics’ global sales organization is focused exclusively on pediatric orthopedics and distributes its products in the United States and 38 countries outside the United States.

Investor Contacts
The Ruth Group
Tram Bui / Emma Poalillo
(646) 536-7035 / 7024
tbui@theruthgroup.com / epoalillo@theruthgroup.com

ORTHOPEDIATRICS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
  September 30, December 31,
    2018   2017
    (unaudited)  
ASSETS
Current assets:
Cash $ 24,463 $ 42,582
Accounts receivable – trade, less allowance for doubtful accounts of
$131 and $143, respectively 9,456 5,603
Inventories, net 26,646 19,498
Inventories held by international distributors, net 234 1,047
Prepaid expenses and other current assets 1,045 831
Total current assets 61,844 69,561
Property and equipment, net 12,774 10,391
Other assets:
Amortizable intangible assets, net 2,000 2,089
Other intangible assets 260 260
Total other assets 2,260 2,349
Total assets $ 76,878 $ 82,301
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable – trade $ 5,903 $ 5,495
Accrued compensation and benefits 3,302 2,905
Current portion of long-term debt with affiliate 117 113
Other current liabilities 1,594 954
Total current liabilities 10,916 9,467
Long-term liabilities:
Long-term debt with affiliate, net of current portion 21,330 21,418
Revolving credit facility with affiliate 3,947 3,921
Total long-term liabilities 25,277 25,339
Total liabilities 36,193 34,806
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.00025 par value; 50,000,000 shares authorized;
12,807,520 shares and 12,621,781 shares issued and outstanding as
of September 30, 2018 (unaudited) and December 31, 2017 2 2
Additional paid-in capital 153,649 150,424
Accumulated deficit (112,623 ) (103,066 )
Accumulated other comprehensive income (343 ) 135
Total stockholders’ equity 40,685 47,495
Total liabilities and stockholders’ equity $ 76,878 $ 82,301
ORTHOPEDIATRICS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Share and Per Share Data)
Three Months Ended
September 30,		 Nine Months Ended
September 30,
2018 2017 2018 2017
Net revenue $ 15,820 $ 12,375 $ 42,991 $ 33,939
Cost of revenue 3,843 2,884 10,825 8,321
Gross profit 11,977 9,491 32,166 25,618
Operating expenses:
Sales and marketing 7,150 5,633 20,005 15,122
General and administrative 4,877 3,487 16,393 10,282
Research and development 1,122 1,127 3,455 2,482
Total operating expenses 13,149 10,247 39,853 27,886
Operating loss (1,172 ) (756 ) (7,687 ) (2,268 )
Other expenses:
Interest expense 608 761 1,722 1,857
Other expense (income) 85 20 148 (38 )
Total other expenses 693 781 1,870 1,819
Net loss $ (1,865 ) $ (1,537 ) $ (9,557 ) $ (4,087 )
Net loss attributable to common stockholders $ (1,865 ) $ (3,021 ) $ (9,557 ) $ (8,451 )
Weighted average common shares – basic and diluted 12,624,858 1,773,385 12,417,972 1,754,576
Net loss per share attributable to common stockholders –
basic and diluted		 $ (0.15 ) $ (1.70 ) $ (0.77 ) $ (4.82 )
ORTHOPEDIATRICS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
For the Nine Months Ended September 30,
2018 2017
OPERATING ACTIVITIES
Net loss $ (9,557 ) $ (4,087 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 2,177 1,748
Stock-based compensation 2,899 1,081
Changes in certain current assets and liabilities:
Accounts receivable – trade (4,077 ) (1,588 )
Inventories (6,087 ) (3,276 )
Inventories held by international distributors 813 345
Prepaid expenses and other current assets (214 ) (382 )
Accounts payable – trade 408 1,559
Accrued expenses and other liabilities 798 513
Other (15 ) 193
Net cash used in operating activities (12,855 ) (3,894 )
INVESTING ACTIVITIES
Purchases of licenses (195 ) (1,337 )
Purchases of property and equipment (5,311 ) (3,949 )
Net cash used in investing activities (5,506 ) (5,286 )
FINANCING ACTIVITIES
Proceeds from issuance of debt with affiliate – 10,139
Payments on mortgage notes (84 ) (80 )
Proceeds from exercise of stock options 326 –
Payments of deferred offering costs – (250 )
Net cash provided by financing activities 242 9,809
NET INCREASE (DECREASE) IN CASH (18,119 ) 629
Cash, beginning of year 42,582 1,609
Cash, end of period $ 24,463 $ 2,238
SUPPLEMENTAL DISCLOSURES
Cash paid for interest $ 1,722 $ 1,856
Accretion of redeemable convertible preferred stock $ – $ 4,364
Transfer of instruments from property and equipment to inventory $ 1,061 $ 1,196
ORTHOPEDIATRICS CORP.
NET REVENUE BY GEOGRAPHY AND PRODUCT CATEGORY
(Unaudited)
(In Thousands)
Three Months Ended September 30, Nine Months Ended September 30,
Product sales by geographic location: 2018 2017 2018 2017
U.S. $ 12,421 $ 9,556 $ 32,532 $ 26,085
International 3,399 2,819 10,459 7,854
Total $ 15,820 $ 12,375 $ 42,991 $ 33,939
Three Months Ended September 30, Nine Months Ended September 30,
Product sales by category: 2018 2017 2018 2017
Trauma and deformity $ 10,562 $ 8,730 $ 29,545 $ 24,339
Scoliosis 5,027 3,299 12,609 8,652
Sports medicine/other 231 346 837 948
Total $ 15,820 $ 12,375 $ 42,991 $ 33,939
ORTHOPEDIATRICS CORP.
RECONCILIATION OF NET LOSS TO NON-GAAP ADJUSTED EBITDA
(Unaudited)
(In Thousands)
Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Net Loss $ (1,865 ) $ (1,537 ) $ (9,557 ) $ (4,087 )
Interest expense, net 608 761 1,722 1,856
Other expense 85 20 148 (38 )
Depreciation and amortization 777 656 2,177 1,748
Stock-based compensation 594 394 1,239 1,121
Accelerated vesting of restricted stock upon our IPO – – 1,986 –
Public company costs 340 – 1,014 –
Non-recurring professional services fees 473 – 2,241 –
Adjusted EBITDA $ 1,012 $ 294 $ 970 $ 600

 

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webmd_photo_of_knee_being_prepped_for_knee_replacement.jpg

What Does Knee Surgery Cost? Few Know, and That’s a Problem

Posted On October 31, 2018 By OrthoSpineNews In Recon /  

By Melanie Evans / Aug. 21, 2018

For nearly a decade, Gundersen Health System’s hospital in La Crosse, Wis., boosted the price of knee-replacement surgery an average of 3% a year. By 2016, the average list price was more than $50,000, including the surgeon and anesthesiologist.

Yet even as administrators raised the price, they had no real idea what it cost to perform the surgery—the most common for hospitals in the U.S. outside of those related to childbirth. They set a price using a combination of educated guesswork and a canny assessment of market opportunity.

Prompted by rumblings from Medicare and private insurers over potential changes to payments, Gundersen decided to nail down the numbers. During an 18-month review, an efficiency expert trailed doctors and nurses to record every minute of activity and note instruments, resources and medicines used. The hospital tallied the time nurses spent wheeling around VCR carts, a mismatch of available postsurgery beds, unnecessarily costly bone cement and delays dispatching physical therapists to get patients moving.

The actual cost? $10,550 at most, including the physicians. The list price was five times that amount.

Competitive forces are out of whack in health care. Hospitals are often ignorant about their actual costs. Instead, they often increase prices to meet profit targets. Patients, especially those with insurance, often don’t know the price of a procedure and rarely shop around.

This dynamic is a driving force in the explosion in health-care spending in the U.S., which will soon reach close to 20% of GDP. Americans spend more per capita on health care than any other developed nation, even though they aren’t buying more health care overall. The rise in hospital prices has outpaced economywide inflation for decades. “When price isn’t tightly linked to cost, that is a sign that the market isn’t competitive,” said Harvard economist Leemore Dafny.

Hospitals can be shielded from the competition that forces other industries to wring out expenses and slash prices. Hospital list prices are a starting point for negotiations with insurance companies over what they will actually pay, and those deals are confidential. Consolidation has given hospitals greater pricing power in many markets, according to health-economics researchers.

“Being cost effective was not an imperative in that type of market dynamic,” said Derek Haas, chief executive officer of Avant-garde Health, a health-care cost and quality analytics company that worked with Gundersen.

On knee-replacement surgery, higher-cost hospitals spent almost twice the amount lower-cost hospitals spent, despite largely similar quality and roughly comparable patients, research by Mr. Haas and Harvard Business School Professor Robert Kaplan showed.

“It’s a standard procedure” that doesn’t vary much from one hospital to another, and nor should its costs, Mr. Kaplan said. “Carve out the old knee and put in a new joint.”

 

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