10+ orthopedic products from AAOS 2019 you need to know

Attendees line up to register for the American Academy of Orthopaedic Surgeons annual meeting in Las Vegas this week. More than 30,000 people were expected. (Image from AAOS)

The American Academy of Orthopaedic Surgeons (AAOS) annual meeting in Las Vegas is abuzz about robotics, according to industry analysts from SVB Leerink.

While the SVB Leerink analysts termed Stryker’s  (NYSE:SYK) Mako platform “best-in-class,” it’s an expanding category. Other major orthopedics companies are using this week’s AAOS meeting to introduce new offerings or tout updates to existing ones.

Johnson & Johnson (NYSE:JNJ), for example, said it plans to debut its Orthotaxy total knee system in 2020, with spine, hip and eventually shoulder indications likely to follow. J&J bought the French robot-assisted surgery startup in 2018, and didn’t have any photos of the prototype to share. But the analysts said it attaches to the patient table and includes a saw/bone cutting capability, like Mako. Unlike Mako, it will not have haptic capability. Rather, it gets the surgeon locked into a cutting plane and preserves the surgeon’s control of the saw (side to side and front to back) on that plane.

Get the full story on our sister site, Medical Design & Outsourcing.

 

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Conformis: Yale study shows customized knee implants save money

ConformisConformis (NSDQ:CFMS) is touting results of a study that found that the average overall cost of care was nearly $1,700 less among Medicare patients treated with the company’s customized individually made knee implants.

Researchers at the Yale School of Medicine and Baker Tilly Virchow Krause conducted the study, which reviewed episode expenditures for all of 2015 among 4,434 Medicare beneficiaries, 739 receiving Conformis customized implants and 3,695 receiving standard off-the-shelf implants.

Results, presented at a recent Knee Society Meeting, found the average overall episode of care was $18,585 for patients with Conformis implants, versus $20,280 for patients with off-the-shelf implants.

Dr. Mary O’Connor, director of the Center for Musculoskeletal Care at Yale School of Medicine and the study’s lead researcher, described the study as the first long-term analysis of the economic impact of Conformis implants among Medicare-funded patients.

“The largest reductions in episode spending were associated with Conformis CIM patients who had overall fewer costs associated with the procedure and hospital stay as well as their post-acute care needs,” O’Connor said in a news release. (Note: O’Connor’s research institute receives support from Conformis, but O’Connor receives no personal compensation from the company.)

 

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Globus Medical gains on Street-beating prelims | Wall Street Beat

Globus Medical (NYSE:GMED) shares closed up yesterday after the orthopedics company reported preliminary fourth-quarter and 2018 sales numbers that beat the consensus forecast on Wall Street.

Audubon, Pa.-based Globus said it expects to post Q4 revenues of $195.5 million and full-year sales of $712.5 million; analysts on The Street were looking for quarterly sales of $188.2 million and annual sales of $705.2 million.

“Our fourth-quarter and full-year results are indicative of strong momentum in several key strategic areas,” CEO Dave Demski said in prepared remarks. “The fourth quarter marked the fifth consecutive quarter of double-digit organic revenue growth, which is particularly outstanding considering the strong comparable quarter last year. Emerging technologies delivered $14.8 million, or 35% growth, a significant accomplishment given the pent-up demand implicit in the fourth quarter of 2017 when we launched our robotic system. The U.S. spinal implant business grew by over 9% year-over-year, continuing the acceleration we saw in the third quarter, driven by robotic implant pull-through and strong recruiting.”

“We are pleased with our fourth quarter and full year performance,” added CFO Dan Scavilla. “We delivered 12% revenue growth and maintained our industry-leading profitability while investing significantly in growing our emerging technologies business. While we are not announcing fourth-quarter or full-year EPS or EBITDA at this time, our performance in the quarter was consistent with our long history of growing efficiently and profitably.”

Globus set its 2019 guidance at $17.72 per adjusted share on sales of $770 million, saying it plans to release its full results Feb. 21.

GMED shares closed up 2.8% at $39.84 apiece yesterday.

ConforMIS tops consensus

ConforMIS (NSDQ:CFMS) also topped the consensus with its Q4 and 2018 top line, saying it expects to post quarterly sales of $22.0 million and annual sales of $89.8 million, including the $10.5 million royalty settlement of its patent victory over Smith & Nephew last year.

Analysts were looking for Q4 sales of $20.8 million and 2018 sales of $86.37 million. Bedford, Mass.-based ConforMIS, which makes customized orthopedic implants, said it plans to report its full results Feb. 6.

CFMS shares closed up 4.4% at 50.5¢ apiece yesterday.

Tactile Systems surges after killing the consensus

Tactile Systems Technology (NSDQ:TCMD) gained big yesterday after crushing the consensus outlook and predicting double-digit top-line growth for this year.

The Minneapolis-based home healthcare device maker guided to Q4 sales of $45.5 million to $46.0 million and full 2018 sales of $142.8 million to $143.3 million, compared with The Street at $38.9 million and $137.7 million, respectively.

“We are excited to close the year with another quarter of strong execution, with revenue growth in excess of 30%, driven by sales of our Flexitouch systems,” CEO Gerald Mattys said in prepared remarks. “Our Flexitouch sales this quarter were driven by several of our primary growth drivers, including the expansion of and continuing execution from our field sales team, and higher than expected volume from a direct contract with a large commercial payer initiated in the third quarter. 2018 was an exceptional year for Tactile Medical, with record sales growth driven by the successful launch of our Flexitouch Plus system in the second quarter, our targeted selling strategy focused on our most productive accounts and strong sales growth in the Veterans Administration channel.

“Looking ahead to 2019, we remain confident in our ability to deliver 20% plus revenue growth and improving profitability as we continue to expand our share of the $4+ billion U.S. market in lymphedema and chronic venous insufficiency,” Mattys said.

TCMD shares closed up 26.2% at $59.73 apiece yesterday. The stock was trading at $59.16 per share today in early trading, down -0.1%.

Iridex slides despite beating forecast

Iridex (NSDQ:IRIX) shares slid after the company released its Q4 and 2018 prelims, despite topping the consensus forecast yesterday.

The Mountain View, Calif.-based laser device maker said it expects to log fourth-quarter sales of $11.0 million to $11.3 million and 2018 sales of$42.1 million to $42.4 million, topping The Street’s outlook for $10.9 million and $42.0 million, respectively.

“Our fourth-quarter results completed an exciting year for Iridex. Our commercial teams continued to drive growth in Cyclo G6 placements and we shipped a record number of G6 probes in the quarter. Overall, I am encouraged by the progress we made throughout the year, as we executed on multiple fronts across the organization,” chairman & CEO William Moore said in prepared remarks. “Heading into 2019, we remain focused on driving awareness and sales among a broad base of glaucoma specialists and comprehensive ophthalmologists, while continuing to innovate and advance our platform to treat the spectrum of the disease.”

Neuronetics also slips after beating The Street

Neuronetics (NSDQ:STIM) shares also took a hit despite beating The Street for both Q4 and 2018.

The Malvern, Pa.-based company, which makes transcranial magnetic stimulation to treat psychiatric disorders, reported Q4 sales of $15.6 million and full-year sales of $52.8 million, which topped both Wall Street and its own 2018 guidance for revenues of $51.0 million to $52.5 million.

Analysts were looking for Q4 sales of $14.9 million and annual sales of $51.8 million.

“We finished 2018 on a high note, as we continue to successfully execute on our strategy to drive higher NeuroStar Advanced Therapy penetration in the U.S.,” president & CEO Chris Thatcher said in prepared remarks. “As we move into 2019, given the success we have seen to date, we will continue to drive adoption through our key growth drivers – expanding our salesforce and related marketing efforts, continuing to focus on high-value accounts and pursuing additional indications for use for the NeuroStar Advanced Therapy system.”

Neuronetics also said it expects a reimbursement decision from the Japanese Ministry of Health, Labour & Welfare during the second half of this year for NeuroStar.

STIM shares closed down -3.6% at $17.00 per share yesterday. The stock was off -.04% at $16.93 per share today in early trading.

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Conformis readies $21m private placement

ConforMIS logo updatedConforMIS (NSDQ:CFMS) said this week that it inked a deal with Lincoln Park Capital Fund to sell $21 million of shares of the company’s common stock over the course of a 36-month term.

According to the terms of the deal, ConforMIS also plans to issue an additional 354,430 shares of common stock to Lincoln Park as commitment shares.

In total, the company said it will sell no more than 12,651,640 shares of common stock to Lincoln Park unless it obtains stockholder approval to issue more.

Also this month, ConforMIS announced that it would lay off roughly 10% of its workforce.

The Billerica, Mass.-based company had 350 employees as of February this year. The cuts are slated to cost approximately $700,000 in severance and other exit charges, the company said. ConforMIS noted that its move to cut workers would generate more than $4 million in savings next year.

“We are taking decisive actions to prioritize our highest-impact new product opportunities, our Conformis hip system and our cementless Press Fit total knee, which we believe provide us an opportunity to build a stronger, more sustainable business. As a result of these actions, we believe we can achieve profitability in 2021,” CEO Mark Augusti said in prepared remarks.

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Conformis to lay of 10% of workforce

ConforMISConforMIS (NSDQ:CFMS) said yesterday that it plans to lay off about 10% of its workforce as it aims to put black ink in the ledger in 2021.

Billerica, Mass.-based ConforMIS, which makes customized knee and hip implants, had 350 employees as of Feb. 28, according to a regulatory filing. The cuts are expected to cost about $700,000 in severance and other exit charges during the fourth quarter, generating savings of more than $4 million next year, the company said.

“We are taking decisive actions to prioritize our highest-impact new product opportunities, our Conformis hip system and our cementless Press Fit total knee, which we believe provide us an opportunity to build a stronger, more sustainable business. As a result of these actions, we believe we can achieve profitability in 2021,” CEO Mark Augusti said in prepared remarks. “These actions included the difficult decision to part ways with many valued employees. On behalf of the entire company, I thank these colleagues for their many contributions to the business.”

Conformis also said it’s working to improve its balance sheet by paying down half of its $30 million debt facility with Oxford Finance.

With the reduced need for capital and to create an improved capital structure, Conformis and Oxford Finance LLC have entered into an amendment to their current Loan and Security Agreement. Under the amended agreement, the Company used cash on-hand to pay down $15 million of its $30 million debt facility, and thereby reduced the total debt outstanding to $15 million and the associated interest expense going forward. The amendment also adjusted certain financial covenants.

“We believe this new plan will help right-size the company, significantly lowering our cash needs,” added CFO Paul Weiner. “When combined with the planned continuation of gross margin improvements, we believe we can achieve cash flow breakeven within the next three years.”

The company said it expects a full commercial launch for the hip implant during the second half of 2019 and limited release of the iTotal G3 knee. The cementless knee product is slated for limited launch in early 2020, Conformis said, adding that it’s also eyeing “selectively identified opportunities” for its knee offerings outside the U.S. as it looks to offset weak sales in Germany.

“We recently achieved our 100th total hip arthroplasty case at Conformis and remain very positive about the status and value proposition of our Conformis hip system. One of our goals when identifying the cost reductions announced today was to insure that they do not affect our previously announced commitment and investment plans for full commercial launch of our Conformis Hip System in the second half of 2019,” Augusti said. “Entering the $7 billion hip arthroplasty market remains a key growth opportunity and a priority for the Company.”

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ConforMIS shares down as Q4, FY2018 earnings show shrinking sales

Share

Shares in ConforMIS (NSDQ:CFMS) have fallen slightly today after the medical device maker posted shrinking sales for its fourth quarter and full fiscal year 2017, despite having topped Q4 losses per share expectations on Wall Street.

The Billerica, Mass.-based company posted losses of $11.9 million, or 27¢ per share, on sales of $20.5 million for the 3 months ended December 31, seeing losses shrink 24.7% while sales shrunk a smaller 4.4% compared with the same period during the previous year.

Quarterly losses-per-share were just ahead of the 31¢ consensus on Wall Street.

For the full fiscal year, ConforMIS posted losses of $53.4 million, or $1.24 per share, on sales of $77.1 million, seeing losses shrink 7.1% while sales shrunk a smaller 2.3% compared with its previous fiscal year.

“As reported earlier, with our fourth quarter revenue of $20.8 million, we exceeded the high-end of our guidance. Importantly, our gross margin – which is a key imperative for us – increased to 42% for the quarter. This improvement exceeded our guidance, is consistent with our efforts throughout 2017 and we believe positions us well heading into 2018,” prez & CEO Mark Augusti said in a press release.

For the upcoming year, ConforMIS said it expects to post sales of between $79.6 million and $83.6 million, for year-over-year growth of 2% to 8%. For its first quarter in 2018, the company said it expects to post revenue between $19.1 million and $19.8 million.

“As I have mentioned previously, 2017 was a transition year for ConforMIS as we focused on improving our long-term growth and profitability profile. We expect continued strength coming from our iTotal PS, which was fully launched in the first half of 2016, and we are focused on improving our commercial execution to drive better results in our base business going forward. We expect continued improvements in our gross margin in 2018. We also expect to continue to report out on our clinical and health economic data throughout 2018 and commence the limited launch of our ConforMIS hip system in the back half of the year,” Augusti said in a prepared statement.