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Company Financials: Orthopaedics and Spine

Exhibit 1 displays companies’ orthopaedic sales growth by product segment for 2Q13 vs. 2Q12. (constant currency, pro forma results) Performance highlights follow, and pertain to 2Q13 unless noted.

financials oct2013

aap Implantate
€9.2MM (~US $12.2MM), +1% (Trauma ~$3.7MM, +155%)

  • OEM sales of bone cement/cementing techniques down slightly, offset by strong LOQTEQ and biomaterials sales
  • Divested non-core recon products (hip, knee, shoulder)

Bacterin
$8.3MM, +1%

  • Growth attributed to higher volume sales, partially offset by lower sales prices due to discounting for higher-volume distributors/preferred vendors
  • Able to win back previous accounts, stabilize core hospital business
  • Received clearance for additional indication for OsteoSelect DBM Putty for spinal fusion
  • Not currently working with any physician-owned distributors nor expecting to do so in the future

Baxano Surgical
$3.9MM, +12% (U.S. $3.7MM, +6%, ex-U.S. $0.2MM, flat; Baxano products $0.8MM; U.S. AxiaLIF $1.8MM, -21%; U.S. VEO $0.7MM, +49%) Pro forma $5.6MM (U.S. $5.5MM, +2%; U.S. iO-Flex $2.6MM, +15%)

  • 153 domestic AxiaLIF procedures performed; 1st quarter of meaningful sequential domestic growth since Category III code put in place (early 2009)
  • 69 VEO cases, +73%
  • 679 iO-Flex cases, -8% sequentially (but up year-overyear)
  • All surgeon training now incorporates iO-Flex
  • 23 surgeons returned to AxiaLIF to date in 2012, representing ~10% of AxiaLIF caseload
  • >1MM covered lives for AxiaLIF, consistent w/2Q
  • Completed initial Baxano/TranS1 cross training of integrated salesforce; completion slated for end of 3Q
  • Future product launches include ioTome (4Q) and AVANCE pedicle screw (mid-2014)
  • STRiDE study (Spondylolisthesis Treated with an iOFlex® System enabled Decompression) on track to complete 50-patient enrollment by end of 2013
  • Estimates MIS encompasses ~25% of total spine market; claims that over the next 4-5 years, could approach 50%

Medtronic (for FY1Q14 ended 7/26/13)
$765MM, -1% (U.S. $536MM, -4%; ex-U.S. $229MM, +5%)

  • Core Spinal $641MM, +1% (U.S. $426MM, -1%; ex-U.S. $215MM, +4%)
  • BMP $124MM, -11% (U.S. $110MM, -14%; ex-U.S. $14MM, +15%)
    • Core spinal showing signs of stability, driven by new products/procedures, imaging, navigation, etc.
    • U.S. core spine pricing showed low-single-digit decline, procedure volumes flat
    • BMP decline appears to be tapering; FY14 global sales expected to be down in mid-single-digits
    • Kanghui orthopedic business growing >20%
    • Published manuscript of retrospective analysis of U.S. payor database, investigating cancer incidence in real world use of INFUSE; authors found no evidence that administration of BMP at time of lumbar fusion procedure is associated with cancer risk
    • Planning complete refresh of anterior cervical plate products; cervical contributes nearly 25% of U.S. core spinal business

Sources: Company press releases, earnings calls, filings with the Securities and Exchange Commission

Julie A. Vetalice is Content Coordinator for ORTHOWORLD Inc. She can be reached at 440.543.2101 or This email address is being protected from spambots. You need JavaScript enabled to view it..

 

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