SeaSpine Holdings Corporation (NASDAQ: SPNE), a global medical
technology company focused on surgical solutions for the treatment
of spinal disorders, today announced financial results for the
third quarter ended September 30, 2019.
Summary of Third Quarter 2019 Financial Results and
Recent Accomplishments
- Revenue of $39.9 million, an increase of 11%
year-over-year
- U.S. revenue of $35.5 million, an increase of 12%
year-over-year
- U.S. Spinal Implants revenue of $17.4 million, an increase of
16% year-over-year
- U.S. Orthobiologics revenue of $18.2 million, an increase of 9%
year-over-year
- Announced exclusive (field-based) collaboration with restor3d,
Inc. to develop differentiated 3D-printed interbody devices, one of
the fastest growing segments in spine
- Limited commercial launch of three additions to the product
portfolio:
- Mariner MIS Posterior Fixation System, a minimally invasive
system built upon the Mariner platform to simplify the treatment of
a wide range of spinal pathologies
- Mariner Outrigger Revision System, an adjunct to the Mariner
Posterior Fixation system designed to effectively revise and extend
previous fusions
- Shoreline RT Cervical Interbody Implant System, featuring Reef
Topography, which describes machined macrostructures and undercut
features designed to act as an integrated fusion scaffolding that
enhances NanoMetalene surface technology
- Presented data at the North American Spine Society (NASS)
Annual Meeting demonstrating that the cell component of cellular
bone matrices provides no benefit in bone healing
Keith C. Valentine, President and Chief Executive Officer, said,
“The Mariner revision and MIS systems are key new products in our
spinal implants portfolio that allow us to attract the high-quality
distribution that we believe, coupled with our other initiatives,
will generate consistent U.S. spinal implants revenue growth in the
mid-teens through 2020, with further acceleration anticipated in
2021. Notably, we achieved 16% growth in this portfolio based
primarily on our core Mariner and NanoMetalene platforms. As
we expand and enhance these foundational technologies with the
Mariner revision and MIS systems, transition Mariner midline to
full commercialization before the end of 2019, and execute on our
3D strategy, we will have access to new market segments where we
were previously unable to compete.”
Mr. Valentine continued, “Adding to confidence in our future
growth is the proprietary Reef Topography that we licensed in 2017
and introduced this past quarter with Shoreline, which further
differentiates our interbody offerings. Critically, we are
investing in the scientific work to evidence the value of Reef
Topography. We have preliminary data from an animal study,
which we expect to finalize this year and present at a future
scientific conference, that we believe demonstrates the in vivo
benefits of Reef. We expect to launch an additional five
interbody products that incorporate Reef Topography by the end of
2020.”
“At the recent NASS meeting, we presented data from a study
conducted in collaboration with Jeff Wang, MD, the current
president of NASS, and his research team at USC, along with Scott
Boden, MD at Emory University, demonstrating that there was no
benefit to the viable cell component of cellular bone matrices in
the well-accepted athymic rat posterolateral fusion model,” said
Frank Vizesi, Vice President, Orthobiologics Research and
Development and Clinical Affairs. “The study also indicated
superior fusion with our demineralized bone matrix product,
OsteoStrand™ Plus, which does not contain any cell component,
relative to two market leading cell-based products. As the
body of evidence grows confirming that cells do not confer any
benefit in bone healing, we believe we are exceptionally
well-positioned to transition hospitals from high-priced,
cell-based therapies to our best-in-class DBM products.”
Mr. Valentine concluded, “We look forward to the collaboration
with restor3d, which provides us an opportunity to partner with
Professor Ken Gall, one of the leaders in additive processing
techniques, and his team from Duke University. We will now
have the opportunity to deliver best-in-class solutions for those
surgeons who prefer titanium-based, 3D-printed interbodies, in
addition to those who prefer traditional PEEK or advanced composite
materials, such as our NanoMetalene surface technology. In
the next six to nine months, we expect the limited commercial
launch of five 3D-printed interbody products designed specifically
for different approaches or techniques in the cervical and lumbar
regions and to move these products to full commercial launch by the
end of 2021.”
John Bostjancic, Chief Financial Officer, said, “Our product
development plans are ambitious, but we have the team and processes
in place that, combined with our strong balance sheet, we believe
will enable us to execute successfully across a broad range of
initiatives. Additionally, we are well positioned to invest
in the additional sets needed to attract the strongest distribution
partners and to support the number of surgical procedures that,
ultimately, we believe will deliver long-term growth and
stockholder value. Confidence in our existing liquidity
position is demonstrated by our decision to terminate our $50
million at-the-market facility.”
Third Quarter 2019 Financial ResultsRevenue for
the third quarter of 2019 was $39.9 million, an 11% increase
compared to the same period of the prior year. Spinal
Implants revenue was $19.8 million, a 15% increase compared to the
same period of the prior year. The $2.5 million increase was
driven by growth in recently launched products. Orthobiologics
revenue was $20.1 million, an 8% increase compared to the same
period of the prior year. The $1.5 million increase was
driven by growth in recently launched products.
Gross margin for the third quarter of 2019 was 63.9%, compared
to 60.2% for the same period of the prior year. The increase in
gross margin was due to a favorable shift in geographic and product
mix, with higher margin U.S. revenue growing faster than
international revenue and higher gross margin spinal implant
product revenue growing faster than orthobiologics product
revenue. Additionally, manufacturing scrap rates, inventory
losses and excess and obsolete provisions were lower in the current
period compared to the prior year period.
Operating expense for the third quarter of 2019 was $34.8
million, a $3.8 million increase compared to the same period of the
prior year. This increase was driven by a $3.1 million
increase in selling, general and administrative expenses and a $0.7
million increase in research and development expenses compared to
the prior year period.
Net loss for the third quarter of 2019 was $9.7 million, a $0.1
million increase compared to same period of the prior
year.
At September 30, 2019, cash, cash equivalents and investments
were $27.3 million, and the company had no outstanding debt under
its credit facility.
Updated 2019 Financial OutlookSeaSpine expects
full-year 2019 total revenue to be in the range of $157 million to
$158 million, reflecting growth of 9% to 10% compared to the prior
year.
Webcast and Conference Call
InformationSeaSpine’s management team will host a
conference call beginning today at 1:30 p.m. Pacific time / 4:30
p.m. Eastern time to discuss the financial results announced today.
Individuals interested in listening to the conference call may do
so by dialing (877) 418-4766 for callers in the U.S. or (614)
385-1253 for callers outside the U.S., using Conference ID:
1369654. To listen to the webcast and view the accompanying
slides, please visit the Investors section of the SeaSpine website
at: www.seaspine.com.
About SeaSpineSeaSpine (www.seaspine.com) is a
global medical technology company focused on the design,
development and commercialization of surgical solutions for the
treatment of patients suffering from spinal disorders. SeaSpine has
a comprehensive portfolio of orthobiologics and spinal implants
solutions to meet the varying combinations of products that
neurosurgeons and orthopedic spine surgeons need to perform fusion
procedures on the lumbar, thoracic and cervical spine. SeaSpine’s
orthobiologics products consist of a broad range of advanced and
traditional bone graft substitutes that are designed to improve
bone fusion rates following a wide range of orthopedic surgeries,
including spine, hip, and extremities procedures. SeaSpine’s spinal
implants portfolio consists of an extensive line of products to
facilitate spinal fusion in degenerative, minimally invasive
surgery (MIS), and complex spinal deformity procedures. Expertise
in both orthobiologic sciences and spinal implants product
development allows SeaSpine to offer its surgeon customers a
differentiated portfolio and a complete solution to meet their
fusion requirements. SeaSpine currently markets its products in the
United States and in approximately 30 countries worldwide through a
committed network of increasingly exclusive distribution
partners.
Forward-Looking StatementsSeaSpine cautions you
that statements included in this news release that are not a
description of historical facts are forward-looking statements that
are based on the Company’s current expectations and assumptions.
Such forward-looking statements include, but are not limited to,
statements relating to: the Company’s ability, and confidence in
its ability, to generate sustained U.S. spinal implants revenue
growth in the mid-teens through 2020, with further acceleration in
2021; the timing of the transition of Mariner Cortical to full
commercialization; the Company’s ability to access new market
segments; the potential for Reef Topography to differentiate the
Company’s interbody offerings; the timing of when final data from
an animal study related to Reef Topography will be presented and
the potential of such data to demonstrate the in vivo benefits of
Reef Topography; the timing of the launch of additional interbody
products that incorporate Reef Topography and the number of such
products that will be launched; the Company’s positioning and
ability to transition hospitals from cell-based therapies to its
demineralized bone matrix products; the Company’s ability to
deliver best-in-class solutions for surgeons who prefer
titanium-based, 3D-printed interbodies; the timing of the limited
and full commercial launch of 3D-printed interbody products, the
number of such products that will be launched, and the approaches
and techniques that such products address; the Company’s ability to
execute successfully across a broad range of product development
initiatives and to invest in the additional sets needed to attract
the strongest distribution and to support the number of surgical
procedures that delivers long-term growth and stockholder value;
and the Company’s expectations for full-year 2019 revenue,
including anticipated U.S. Spinal Implants revenue. Among the
factors that could cause or contribute to material differences
between the Company’s actual results and the expectations indicated
by the forward-looking statements are risks and uncertainties that
include, but are not limited to: surgeons’ willingness to continue
to use the Company’s existing products and to adopt its newly
launched products, including the risk that the Company’s products
do not demonstrate adequate safety or efficacy, independently or
relative to competitive products, to support expected levels of
demand or pricing; the ability of newly launched products to
perform as designed and intended and to meet the needs of surgeons
and patients, including as a result of the lack of clinical
validation of products in limited commercial (or “alpha”) launch;
the Company’s ability to continue to invest in medical education
and training, product development, and/or sales and marketing
initiatives at levels sufficient to drive future revenue growth,
including its inability to obtain funding on a timely basis on
acceptable terms, or at all; the Company’s ability to attract new,
high-quality distributors, whether as a result of perceived
deficiencies, or gaps, in the Company’s existing product portfolio,
inability to reach agreement on financial or other contractual
terms, or otherwise, as well as disruption associated with
restrictive covenants to which distributors are subject and
potential litigation and expense associated therewith; risks
inherent in newly initiated collaborations, such as with restor3d,
Inc., or the use of nascent manufacturing techniques, such as
additive processing/3D-printing;continued pricing pressure, whether
as a result of consolidation in hospital systems, competitors or
others, as well as exclusion from major healthcare systems, whether
as a result of unwillingness to provide required pricing or
otherwise; the risk of supply shortages and the associated,
potentially long-term disruption to product sales, including as a
result of the Company’s dependence on PcoMed to supply products
incorporating NanoMetalene technology and a limited number of
third-party suppliers for other components and raw materials, or
otherwise; unexpected expense and delay, including as a result of
litigation or as a result of developing and supporting the launch
of new products, the fact that newly launched products may require
substantial additional development activities, which could
introduce further expense and delay, or as a result of obtaining
regulatory clearances; general economic and business conditions in
the markets in which the Company does business, both in the U.S.
and abroad; and other risks and uncertainties more fully described
in the Company’s news releases and periodic filings with the
Securities and Exchange Commission. The Company’s public filings
with the Securities and Exchange Commission are available at
www.sec.gov.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date when made. SeaSpine
does not intend to revise or update any forward-looking statement
set forth in this news release to reflect events or circumstances
arising after the date hereof, except as may be required by
law.
Investor Relations ContactLeigh
Salvo(415) 937-5402ir@seaspine.com
SEASPINE HOLDINGS
CORPORATIONUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(In thousands, except per share
data)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Total revenue, net |
$ |
39,888 |
|
|
$ |
35,834 |
|
|
$ |
115,344 |
|
|
$ |
105,418 |
|
Cost of goods sold |
14,407 |
|
|
14,247 |
|
|
42,303 |
|
|
40,986 |
|
Gross profit |
25,481 |
|
|
21,587 |
|
|
73,041 |
|
|
64,432 |
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and
administrative |
30,134 |
|
|
27,041 |
|
|
85,050 |
|
|
76,940 |
|
Research and development |
3,896 |
|
|
3,203 |
|
|
10,995 |
|
|
8,783 |
|
Intangible amortization |
792 |
|
|
792 |
|
|
2,377 |
|
|
2,376 |
|
Impairment of intangible
assets |
— |
|
|
— |
|
|
4,993 |
|
|
— |
|
Total operating expenses |
34,822 |
|
|
31,036 |
|
|
103,415 |
|
|
88,099 |
|
Operating loss |
(9,341 |
) |
|
(9,449 |
) |
|
(30,374 |
) |
|
(23,667 |
) |
Other expense, net |
(97 |
) |
|
(190 |
) |
|
(49 |
) |
|
(327 |
) |
Loss before income taxes |
(9,438 |
) |
|
(9,639 |
) |
|
(30,423 |
) |
|
(23,994 |
) |
Provision (benefit) for income
taxes |
225 |
|
|
(107 |
) |
|
265 |
|
|
4 |
|
Net loss |
$ |
(9,663 |
) |
|
$ |
(9,532 |
) |
|
$ |
(30,688 |
) |
|
$ |
(23,998 |
) |
Net loss per share, basic and
diluted |
$ |
(0.51 |
) |
|
$ |
(0.65 |
) |
|
$ |
(1.62 |
) |
|
$ |
(1.66 |
) |
Weighted average shares used
to compute basic and diluted net loss per share |
19,051 |
|
|
14,750 |
|
|
18,947 |
|
|
14,477 |
|
SEASPINE HOLDINGS
CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEET
DATA(In thousands)
|
September 30, 2019 |
|
December 31, |
|
(unaudited) |
|
2018 |
Cash and cash equivalents |
$ |
22,314 |
|
|
$ |
24,233 |
|
Short-term investments |
4,996 |
|
|
29,800 |
|
Trade accounts receivable,
net |
23,720 |
|
|
20,335 |
|
Inventories |
48,011 |
|
|
42,742 |
|
Total current liabilities |
31,210 |
|
|
26,546 |
|
Total stockholders'
equity |
115,752 |
|
|
142,085 |
|
SeaSpine (NASDAQ:SPNE)
Historical Stock Chart
From Mar 2024 to Apr 2024
SeaSpine (NASDAQ:SPNE)
Historical Stock Chart
From Apr 2023 to Apr 2024