RTI Surgical closes $300m Paradigm Spine buy

RTI Surgical acquires Paradigm Spine

RTI Surgical (NSDQ:RTIX) said last week that it closed the $300 million acquisition of Paradigm Spine and its Coflex lumbar stenosis device.

The cash-and-stock deal, originally announced last November, called for RTI to pay $100 million in cash and more than 10.7 million shares of its own stock worth $50 million, with the $150 million balance pegged to unspecified milestones in cash and stock.

New York City-based Paradigm’s Coflex device won pre-market approval from the FDA in 2012.

“The acquisition of Paradigm aligns with RTI’s growth strategy focused on investing in differentiated products and building scale within our spine business,” RTI president & CEO Camille Farhat said in prepared remarks. “The addition of Coflex allows RTI to provide surgeons who treat patients with moderate to severe LSS a PMA-approved device supported by more than 12 years of clinical data and with expanding coverage from payors. With RTI’s demand generation expertise, scale and infrastructure and the experience of key members of the legacy Paradigm Spine team joining RTI, we are well-positioned to grow coflex as the treatment of choice and standard of care for appropriate LSS patients.”

Piper Jaffray advised Alachua, Fla.-based RTI on the deal, with Sidley Austin and Holland & Knight as counsel for  the transaction and financing, respectively. Dorsey & Whitney was legal counsel to Paradigm Spine.

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RTI Surgical shareholders approve Paradigm Spine buy

RTI Surgical acquires Paradigm Spine

RTI Surgical (NSDQ:RTIX) said yesterday that its shareholders approved its approximately $300 million acquisition of Paradigm Spine and its Coflex lumbar stenosis device.

Alachua, Fla.-based RTI Surgical said that it expects the acquisition to close today.

“We are pleased RTI’s shareholders have given their strong support for our acquisition of Paradigm Spine. With shareholder approval secured, we look forward to closing the acquisition and strengthening our spine portfolio with the addition of the coflex Interlaminar Stabilization device. Coflex is a differentiated and minimally invasive motion preserving stabilization implant that is FDA PMA-approved for the treatment of moderate to severe lumbar spinal stenosis in conjunction with decompression. This milestone represents another advance in RTI’s strategic transformation to reduce complexity, drive operational excellence and accelerate growth,” RTI Surgical prez & CEO Camille Farhat said in a press release.

The cash-and-stock deal, originally announced last November, called for RTI to pay $100 million in cash and more than 10.7 million shares of its own stock worth $50 million, with the $150 million balance pegged to unspecified milestones in cash and stock.

New York City-based Paradigm’s Coflex device won pre-market approval from the FDA in 2012.

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RTI Surgical ticks up on swing to Q4 black

RTI SurgicalShares in RTI Surgical (NSDQ:RTIX) ticked up today on the the medical device company’s report yesterday of a swing to black ink for the fourth quarter.

Alachua, Fla.-based RTI posted profits of $2.1 million, or 3¢ per share, on sales of $71.2 million for the three months ended Dec. 31, 2018, compared with losses of -$8.6 million during the same period in 2017 year and amounting to sales growth of 0.6%. Analysts on Wall Street were looking for earnings per share of 1¢.

Full-year losses were -$3.4 million, or -5¢ per share, on sales of $280.9 million, marking a swing to red from profits of $2.5 million for 2017 and a top-line gain of 0.5%.

“Our fourth-quarter and full-year 2018 results demonstrate solid financial performance resulting from consistent progress across our key strategic initiatives,” president & CEO Camille Farhat said in prepared remarks. “We believe the ongoing successful efforts to reduce complexity and drive operational excellence, including significant cost reduction efforts in tissue manufacturing, are providing the foundation to accelerate RTI’s growth. In 2018, we returned OEM to growth and continued to transition customers to long-term partners signaling the strength of our relationships and importance of our products to our partners. Further, the definitive agreement to acquire Paradigm Spine, announced in November 2018 and anticipated to close in early March, will contribute to the formidable platform of differentiated spine implants we established in 2018.

“We believe our accomplishments in 2018 have provided an exceptionally strong foundation to support our performance in 2019 and beyond. Our investment in rebuilding the spine pipeline has revitalized our new product development efforts, which we anticipate will serve as a catalyst for organic growth starting in 2020. We will work to continue to reduce the complexity of our business and extend operational excellence throughout the company to accelerate the growth trajectory of RTI. We expect our performance will be driven by the successful integration of Paradigm, disciplined R&D efforts and the continued exploration of acquisition opportunities. We are excited for the year ahead,” Farhat added.

RTI said it expects to post adjusted EBITDA of $36 million to $40 million on sales of  $325 million to $335 million for fiscal 2019.

RTIX shares were up 4.8% to $5.22 apiece today in late-morning activity.

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RTI Surgical wins coverage nod for Simmetry implant

RTI Surgical

RTI Surgical (NSDQ:RTIX) said today that non-profit healthcare organization HealthPartners issued a positive coverage decision covering the company’s minimally invasive sacroiliac joint fusion surgery using the Simmetry system, effective November 1.

The Simmetry system is a minimally invasive surgical solution using decotrication technology, bone graft and threaded fixation to facilitate bone fusion and provide long-term pain relief, Alachua, Fla.-based company said.

“As a surgeon in the HealthPartners network who has experience using the Simmetry System, this positive coverage decision is a win for patients suffering from SI joint dysfunction. The Simmetry System is a minimally invasive surgical solution that promotes SI joint fusion through decortication, with a growing body of clinical evidence showing improvements in pain, disability and opioid use for SI joint patients,” Dr. Edward Santos of Minneapolis’ Summit Orthopedics said in a prepared statement.

“RTI is encouraged by HealthPartners’ decision, which expands access to the Simmetry System for patients with SI joint pain or dysfunction. The Simmetry System is supported by a growing body of evidence suggesting long-term pain relief for these patients. We are committed to advancing clinical data for the Simmetry System to aid in further payor decisions,” prez & CEO Camille Farhat said in a press release.

Earlier this month, RTI Surgical said that it agreed to put $300 million on the table for Paradigm Spine and its Coflex lumbar stenosis device.

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RTI Surgical puts $300m on the table for Paradigm Spine

RTI Surgical acquires Paradigm SpineRTI Surgical (NSDQ:RTIX) agreed to put $300 million on the table for Paradigm Spine and its Coflex lumbar stenosis device.

The cash-and-stock deal calls for Alachua, Fla.-based RTI to pay $100 million in cash and more than 10.7 million shares of its own stock worth $50 million, with the $150 million balance pegged to unspecified milestones in cash and stock. The stock shares are slated to be priced using the volume-weighted average closing price of RTIX shares over the five trading days prior to the deal’s closing, expected during the first quarter next year.

New York City-based Paradigm’s Coflex device won pre-market approval from the FDA in 2012.

“With Coflex, the Paradigm Spine team has created a differentiated implant that has a demonstrated track record of improving patient outcomes and addresses a critical and growing need in the spine surgery space,” RTI president & CEO Camille Farhat said in prepared remarks. “Our growth strategy in spine is to invest in differentiated products and build scale. Coflex is a differentiated product that we anticipate will reinforce customer retention, support portfolio pull-through and enhance our overall spine offering. Following the successful acquisition of Zyga earlier this year, and the numerous successes in our ongoing strategic transformation, we believe this transaction demonstrates our commitment to improving outcomes for more patients, unlocking additional growth opportunities and ultimately driving value for all stakeholders.”

“We have spent the last several years building Coflex into a therapy of choice for orthopedic spine surgeons and neurosurgeons. We believe the treatment is on the verge of accelerating growth as coverage from private payors and patient access begin to expand,” added Paradigm co-founder, chairman & CEO Marc Viscogliosi. “We are confident RTI is the ideal partner to help achieve our considerable growth potential and address a vital patient need in the U.S. market.”

RTI said it expects the deal to add to its EBIDTA within 12 months of closing; it’s funding the via $100 million in new debt financing from Ares Capital.

Piper Jaffray is advising RTI, with Sidley Austin and Holland & Knight as legal counsel; Dorsey & Whitney is legal counsel to Paradigm Spine.

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RTI Surgical ticks up on Q3 beats

RTI SurgicalRTI Surgical (NSDQ:RTIX) shares ticked up today after its third-quarter results beat the average forecast on Wall Street.

Alachua, Fla.-based RTI Surgical posted profits of $2.9 million, or 4¢ per share, on sales of $69.1 million for the three months ended Sept. 30, for a bottom-line slide of -82.3% on sales growth of 3.6% compared with Q3 2017.

Adjusted to exclude one-time items, earnings per share were 3¢, two pennies above The Street, where analysts were looking for sales of $68.6 million.

“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,” president & CEO Camille Farhat said in prepared remarks. “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.

“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,” Farhat said.

RTI lowered the top end of its earnings guidance, saying it now expects to log adjusted EBITDA of $32 million to $35 million, compared with $32 million to $38 million previously, and guided to the low end of its prior $280 million to $290 million outlook.

RTIX shares were up 1.8% to $4.66 apiece today in mid-day trading.

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5 medtech stories we missed this week: July 6, 2018

[Image from unsplash.com]

From Zetta getting FDA clearance to Prescient Medical receiving CE Mark approval, here are five medtech stories we missed this week but thought were still worth mentioning.

1. Zetta wins FDA clearance for Zoom MRI software

Zetta announced in a June 25 press release that its MRI software has received FDA 510(k) clearance. The software, known as Zoom, features an algorithm for image quality enhancement and image optimization of short scanning techniques. It works with all MRI models from all major manufacturers, according to the company. Zoom’s algorithm was designed to help MRI imaging departments automatically process MRI imaging techniques.

2. MIM Software, Spectrum Dynamics Medical ink software deal for Veriton scanner

MIM Software and Spectrum Dynamics Medical have partnered to provide MIM-SD advanced visualization and quantitative processing software for the Veriton, according to a June 24 press release. Veriton is a 12 detector CZT multi-organ scanner that has unparalleled sensitivity, image quality and diagnostic accuracy. The detectors are configured for each organ and offers high resolution, lower dose and shorter acquisition times.

3. LumiThera wins CE Mark for LT-300 device for macular degeneration

LumiThera announced in a June 21 press release that it has received CE Mark for its LT-300 device that treats dry advanced macular degeneration. The device is a light delivery system. The CE Mark approval allows the company to commercialize the device in Europe.

4. RTI Surgical launches Fortilink IBF systems

RTI Surgical has launched its Fortilink-TS and -L IBF Systems, according to a June 12 press release. The systems are designed to be used in lumbar interbody fusion procedures at one or two adjoining levels in patients who have degenerative disc disease. Both systems feature the company’s TetraFuse 3D technology that is a 3D printed polymer-based interbody fusion device that uses a nano-rough surface to create more notable trabecular bone ingrowth.

5. Prescient Medical wins CE Mark for CleanCision

Prescient Surgical announced in a June 12 press release that it has received CE Mark approval for its CleanCision system. CleanCision fights and defends against surgical site infection sources. The approval allows for the commercialization of the system throughout Europe. In addition to the CE Mark approval, Prescient Surgical also received ISO 134385:2016 certification for its quality management system.

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RTI Surgical buys Zyga Tech and its SImmetry sacroiliac fusion device, updates 2018 outlook

RTI Surgical (NSDQ:RTIX) yesterday announced an agreement to purchase Zyga Technology and its SImmetry sacroiliac joint fusion system and today released updated guidance for 2018 and beyond.

The Alachua, Fla.-based RTI surgical said that Zyga Technology has approximately 30 employees and $4 million in annual revenue, and that it plans to fund the acquisition through a combination of cash and through borrowing under its existing credit facility.

Terms of the deal were not disclosed, and RTI Surgical it expects the deal to close when the Delaware Department of State re-opens as it is currently closed due to inclement weather.

“Acquiring Zyga Technology further advances our strategic transformation focused on reducing complexity, driving operational excellence and accelerating growth. We are increasing our focus on both internal development and external investment, and acquiring Zyga Technology’s innovative minimally invasive treatment both accentuates our robust spine portfolio and opens significant opportunities to accelerate growth. The acquisition provides access to a procedure that has been growing in excess of 20% in recent years and leverages the core competencies of our Spine franchise. We believe it is perfectly aligned with our Spine-focused expansion strategy to pursue niche differentiated products, to gain scale and customer retention and support portfolio pull-through along the way. As part of the RTI team, we believe Zyga has the potential to produce significant growth by gaining market share, growing procedure volume and driving increased adoption. SImmetry is a differentiated product designed to drive fusion and supported by clinical data and, with access to RTI’s larger, sophisticated sales force, we will introduce the system to a much wider surgeon audience,” prez & CEO Camille Farhat said in a prepared release.

The company today laid out its guidance and long term goals for 2018 and beyond, expecting to see revenues for 2018 between $280 million and $290 million, with full year EBITDA between $32 million and $38 million.

“We expect 2018 will be a year of continued progress with the accelerating implementation of our strategic transformation plans. Our guidance reflects the early results of our initiatives and the ongoing investments necessary to produce sustainable profitable growth and improved cash flow,” CEO Farhat said in a prepared statement.

Beyond 2018, the company said it is hopeful to achieve $500 million in revenue within 5 years, with doubled EBITDA margin moving up to more than 20%.

“We expect the initiatives we began to reduce complexity and drive operational excellence in 2017 to produce improving margins and cash flow in our tissue focused operations in the coming years. This expected improvement in financial performance will allow us to fund organic and acquisitive growth in our spine focused operations. We are committed to driving significant financial improvements and increasing long-term shareholder value,” CEO Farhat said in a press release.

Last November, RTI Surgical revealed a warning letter it received from the FDA related to processes used to manufacture its Map3 cellular allogeneic bone graft over issues with the regulatory classification of the product.

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RTI Surgical shares rise on Q3 beat

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RTI Surgical

Shares in RTI Surgical (NSDQ:RTIX) rose today after the medical device maker met expectations on Wall Street with its 3rd quarter earnings results.

The Alachua, Fla.-based company posted profits of $16.6 million, or 23¢ per share, on sales of $66.7 million for the 3 months ended September 30, seeing a massive swing from the red on the bottomline while sales grew a slight 0.2% compared with the same period during the prior year.

Adjusted to exclude 1-time items, earnings per share were 1¢, just in line with consensus on Wall Street where analysts were expecting to see sales of $65.4 million for the quarter.

“We believe our focus to reduce complexity, drive operational excellence and accelerate growth continued to support solid financial and operational progress during the most recent quarter. We delivered on our financial commitments while mobilizing across our organization to mitigate the impact of the recent hurricanes, which disrupted end-user demand across many of our markets and necessitated the closure of our Florida operations for several days. Each has a long resume of success and, we believe, will play a key role in driving the execution of our strategic objectives. Our entire leadership team has quickly aligned around accelerating initiatives to reduce complexity and drive operational excellence toward those areas that we believe will have the greatest impact on earnings growth and cash generation over the next 12-18 months. With my confidence that our leadership team is driving these initiatives, we will expand our effort to find new and better ways to serve our customers by enhancing our product portfolio and evaluating and pursuing strategic growth opportunities intended to capitalize on our strengths and enable us to take market leadership positions,” CEO Camille Farhat said in a prepared statement.

Shares in RTI rose 8.1% today, closing at $4.70.