Becker's Spine Review

Spine Device & Innovation 21 10 Key Notes on Spine Device Companies By Heather Linder Titan Spine developed a distribution agreement with Biomet for the Titan Spine Endoskeleton interbody fusion devices to bring them to spine surgeons in Germany. Alphatec Spine reported a $14.5 million loss in the third quarter, a 487 percent increase from the $2.5 million loss during the same period last year. Austin, Texas-based LDR Holding reported a third quarter net loss of nearly $8 million, an increase of 161 percent from 2012's net loss of $3 million. Titan Spine reached an 18,000 implantation milestone for its Endoskeleton interbody fusion device. Bacterin International Holdings developed an alliance with DMP Spine Biologics to distribute Bacterin's bone graft products in European markets. NLT Spine received FDA approval for its second generation PROW FUSION implant and eSPIN discectomy tool for lumbar interbody fusions through a minimally invasive posterior incision. Mazor Robotics closed its initial public offering of 2.76 million shares at $17 per share for a total of $46.92 million in gross proceeds. Going Global: Where the Spine Device Market is Headed (continued from page 1) Eric Major: We've been trying to stay focused with an essential strategy for quite some time. We view the overall spine market as a huge business and we focus on devices for minimally invasive complex spine and deformity procedures. We are also building out a complete portfolio of degenerative products. We believe that in this changing environment it is imperative to provide a comprehensive portfolio to our hospital customers around the world. The thing we have not changed is the focus of our technology in research and development to address the most difficult pathologies and let the experience of our engineers and surgeons inspire our products. With the recent Rail 4D launch, we provided a new option to the spine market that is a very different approach to rigidity for facilitating fusion. That is how we have differentiated our business and continued to grow. Now we are in 30 countries and we have been growing dramatically around the world. Q: What have you learned about the global spine market as you expanded your reach? EM: I think as we enter each market we've come to appreciate that while everyone is treating spine patients, there are different perspectives from surgeons coming from around the world. The way a surgeon in Japan considers treating the patient is different from how surgeons in Germany, Italy or the UK treat patients. We need to make sure we have local business partners in each region to help us appreciate the local needs of the market, such as whether the devices need to be designed differently or whether we need to organize the instrument tray differently. We have grown to have a business appreciation of each market around the world. Q: What challenges are there in the healthcare marketplace today that make it difficult to develop new innovations? EM: I think the biggest challenge for the entire medtech market continues to be the uncertainty of healthcare policy as it relates to our continued investment in research and development, and growth globally. Strong entrepreneurial cultures continue to find a way to grow in any market and that's why I think we continue to grow. NuVasive reported its consolidated net income in the third quarter of $7.3 million, up nearly 250 percent compared to the same period last year. Spine revenue also jumped this past quarter, up 16 percent to $131 million. Zimmer Spine launched its newest line of minimally invasive instruments for exposure, retraction, decompression and disc preparation with lumbar fusion and microdiscectomy procedures, The Viewline Instrument Set. Noblesville, Ind.-based Nexxt Spine launched its FACET FIXX Screw System for stabilization and fixation during lumbar spinal fusion procedures. n When I look at publicly traded spine device companies and us, we continue to grow and stay focused on our core competency. We aren't trying to address pathologies outside of spine. The continued uncertainty has all companies pausing as they continue to make strategic decisions. However, I'm bullish on the decisions we made and that's represented by our quarter after quarter growth. Eric Major Q: How are device companies and providers changing to overcome these difficulties and better meet the needs of their patients? EM: As an organization, we have to continue to be nimble and responsive to the changes in the market every day while not losing sight of the patient care. The big thing that is changing across the industry is the continued inclusiveness in the business decision-making of the surgeons, companies and hospitals. They are working with payers to be more collaborative than in the past. In this environment, we have to be more collaborative as we are looking at the business. We have to partner with surgeons, hospitals, payers and other decision makers going forward. Q: Where do you see the biggest potential for future growth in the spine device market? EM: I think ultimately at K2M, we are fortunate to be in an industry where the psychological income of the employees is that we recognize we have a positive impact on patients around the world. If we remain focused on the strategies to provide technology for complex spine pathologies, we'll be able to build a portfolio because we've been able to keep our eye on the spine market. Also, the globalization view of the world allows us to expand our reach to offices in Europe, Asia and the United States. That expansion has given us better visibility in the markets and the unique needs of surgeons around the world. That global view contributes to developing interesting technology that we can bring to the market. n

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