Company Financials: Orthopaedics and Spine

ORTHOWORLD’s estimates place overall 2011 market growth at 4% over 2010, as displayed in Exhibit 1. Performance highlights follow and pertain to both 4Q11 and 2011, as indicated. 

Exhibit 1: Orthopaedic Sales Increases1 by Product Segment: 2011 vs. 2010

financial2011

Notes to Exhibit 1

  1. Orthopaedic products except as indicated; constant currency, pro forma growth
  2. Includes biologics
  3. For the quarter ended 11/30/11; includes Dental. Spine includes Bone Stim and Biologics; Bone Stim reflects all Bone Healing sales.
  4. For the quarter ended 1/27/12
  5. Spine
  6. For the quarter ended 12/31/11
  7. Extremities: extremities + fixation combined; Endoscopy: endoscopic + communications, most of which is orthopaedic; Spine: neuro + spine. Total growth excludes Patient Handling.
  8. ORTHOWORLD estimates
  9. For the quarter ended 12/31/11
  10. Excludes Other (Aerospace)

aap Implantate
€29.2MM (~US $38.9MM), +6% (U.S. $4.4MM, +77%)

  • U.S. sales driven by bone cement
  • Signed bone cement development contract with undisclosed orthopaedic company
  • Launched LOQTEQ trauma product family, expecting FDA clearance during 2012

Bacterin
$30.1MM, +96%
4Q11 revenue: $9.1MM, +72%

  • 2-year study results demonstrated equivalence of OsteoSponge bone scaffold to rhBMP-2 in spinal fusion
  • OsteoSponge used in >100,000 procedures to date
  • Signed distribution agreement with Jeil for LeForte craniomaxillofacial system, expecting full product launch 2Q12
  • Hospital accounts increased to 616 facilities, +27% from 4Q10
  • 2012 product launches include different shapes, prefilled syringes
  • Pursuing FDA clearance for OsteoSponge SC for cartilage regeneration scaffold: enrollment of 75 patients will take ~2 years
  • Salesforce ~56 reps strong, will add 15-20 during 2012
  • ~150 distributors worldwide

China Kanghui
RMB 327.0MM (~US $52MM), +35% (Domestic +32%, International +49%)Ÿ

    • Trauma $32MM, +31%
    • Spine $15.8MM, +46%
    • ŸOEM $4.1MM, +29%

4Q11 revenue: RMB 96.6MM (~$15.3MM), +34% (Domestic $11.1MM, +27%; International $3.5MM, +106%)Ÿ

    • Trauma $10.1MM, +45%
    • Ÿ
    • Spine $4.5MM, +28%
    • OEM $0.7MM, -30%
  • 4Q International growth supported by further penetration of existing channels in Asia, South America
  • Obtained FDA 510(k) clearance for TGM Medical’s Helicon Hip, Milestone Knee, related instruments
  • Launched 4 new products in 2011
  • Added 34 distributors in China, total 297
  • Integration of Wei Rui Li continues smoothly, expecting to introduce knee product in China during 2012
  • Reiterating plan to launch FDA-cleared hip and knee implants from Consensus under own brand internationally during 2012, in China by 2014
  • Other 2012 product launches include cannulated pedicle screw, anterior plate, proximal femoral locking plate, etc.

Corin
£47.9MM (~US $75.7MM), +9%

    • Hips $42.9MM, +41% (+29% excluding MAKO and metal-on-metal/MoM)
    • Knees $11.8MM, -20%
    • Other $20.8MM, -14%

By geographic region:

    • U.K. $12.7MM, -6%
    • Germany/Austria $8.9MM, +1%
    • Australia $19.8MM, -9%
    • Japan $11.1MM, +6%
    • U.S. $13.8MM, +308%
    • Distributor markets $9.7MM, -20%

General

  • Closed joint business in China

Hips

  • Hip growth driven by Metafix, MiniHip and Trinity
  • Growth of Trinity buoyed by introduction of vitamin E polyethylene ECiMA cup liner
  • Rolled out additional sizes and improved instruments for Taperfit cemented hip stem
  • Completely rolled out new cementless hip portfolio in U.S.
  • Commenced supply of Metafix and Trinity hips to MAKO for use with RIO Robotic Arm Interactive Orthopaedic system in U.S.
  • Undertaking development of second cementless hip, focusing on market segments not served by Metafix; evaluation surgeries slated for 2H12 and commercial launch in 2013
  • Terminated U.S. Cormet distribution agreement with Stryker

Knees

  • Growth constrained by difficult market conditions in Turkey, competition in Germany and U.K.
  • MoM now 5% of total sales
  • Terminated potential future distribution of Uniglide mobile bearing partial knee with Stryker
  • Successfully completed first new Unity total knee evaluation surgeries, full commercial launch slated for 1H13

Other

  • Zenith mobile bearing ankle sales flat
  • Disposable surgical product sales declined due to strong competition
  • Sales of LARS ligament grew in U.K., declined significantly in Australia following clinical debate on range of anterior cruciate ligament injury indications that are suitable for repair using LARS, plus high-profile failures in elite athletes
  • Australian reimbursement for LARS under review, results expected in 1H12
  • Extended 5-year distribution agreement for LARS from French manufacturer, to 2013

Mazor Robotics
$5.8MM, +40%
4Q11 revenue: $1.8MM, +38%

  • Introduced next-generation Renaissance surgical robotic system in U.S. in 4Q

TiGenix
€1.1MM (~US $1.4MM), +85%

  • Obtained reimbursement for ChondroCelect in Belgium
  • In 2012, expects to sign distribution agreements for ChondroCelect in additional countries, seek partners to progress allogeneic stem cell treatment for osteoarthritis

TranS1
$19.1MM, -27%
4Q11 revenue: $3.9MM, -32% (U.S. $3.7MM, -14%; ex-U.S. $0.3MM, -56%

  • 4Q U.S. AxiaLIF revenue $3.3MM: 75% 1-level, 25% 2-level
  • 4Q non-AxiaLIF revenue ~$380,000, including ~$180,000 from lateral cases
  • 310 TranS1 procedures performed globally in 4Q, including 256 AxiaLIF cases
  • 4Q case volume weakened due to sales rep turnover in 3Q, reimbursement pressure, etc.; ex-U.S. revenues declined following transition to agency distribution in Germany
  • Launched VEO minimally invasive lateral access fusion system in 4Q, sales force fully trained
  • During 1Q12, CPT Editorial Panel voted to approve an application for a new Category I CPT code (225XX1) for L5/S1 spinal fusion using AxiaLIF implant for pre-sacral interbody fusion
  • Panel also voted to establish a new Category III CPT add-on code (019XXT); both codes effective 1/1/13
  • Health Care Services, BCBS provider for Illinois, New Mexico, Oklahoma and Texas, recently issued an updated policy (effective 6/1/12) that removes coverage for AxiaLIF (See BARE BONES®, 2/12.)
  • Restarted 2-year, 200-patient prospective, randomized control study of AxiaLIF/TLIF (See ORTHOKNOW, 8/11.)
  • Planning clinical study to expand labeling for AxiaLIF to include long constructs

Trauson
RMB 384.8MM (~US $60.8MM), +32%

    • Trauma $38.6MM, +33%
    • Spine $9.5MM, +76%
    • OEM $9.0MM, -1%
    • Other $3.6MM, +54
          
  • R&D/regulatory pipeline includes 4 joint replacement and 7 spine products
  • Added >50 new sales reps during 2011, including many former physicians/orthopaedic surgeons

 

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

Julie A. Vetalice is Editor, Information Products 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..