March 23, 2017 | Blake Mossy
Alphatec Holdings, Inc. (ATEC), the parent company of Alphatec Spine, Inc., a provider of spinal fusion technologies, announced financial results for the fourth quarter and full year ended December 31, 2016. Fourth quarter total net revenues of $27.1 million. U.S. commercial revenues for the fourth quarter of 2016 were $24.5 million, down 16.9%, compared to $29.5 million reported for the fourth quarter of 2015. For the fourth quarter 2016, U.S. commercial revenues decreased primarily as a result of a decrease in the Company’s stocking business, lower U.S. hospital unit volume and pricing declines. U.S. gross profit and gross margin for the fourth quarter of 2016 were $15.2 million and 62.2%, respectively, compared to $21.4 million and 72.6%, respectively, for the fourth quarter of 2015. For the fourth quarter and full year 2016, gross margins declined as compared to 2015, primarily as a result of: higher product costs driven by lower than planned sourcing volumes throughout 2016, obsolescence charges related to product portfolio management, and price declines, partially offset by the absence of one-time charges that occurred in 2015. Adjusted EBITDA in the fourth quarter of 2016 was $(2.2) million, compared to $3.4 million for the fourth quarter of 2015.
Alphatec Holdings, the parent company of Alphatec Spine, Inc., a provider of spinal fusion technologies, announced that it has entered into a definitive securities purchase agreement to raise approximately $18.9 million in a private placement of common stock, Series A Convertible Preferred Stock and warrants exercisable for common stock. The private placement is being led by new healthcare dedicated institutional investors, with participation by directors and executive officers of Alphatec and other existing investors. The private placement is expected to close on or about March 28, 2017, subject to the satisfaction of customary closing conditions. Alphatec expects to use the net proceeds from the private placement for general corporate and working capital purposes.
Helius Medical Technologies closed a $10 million through a public offering of 6.6 million shares of common stock. The new capital will be used to complete a clinical trial for its PoNS therapy for the treatment of mild to moderate brain injury and to launch a new trial for multiple sclerosis indication.
Invuity signed a new debt agreement with MidCap Financial. Under the borrowing agreement, the new debt facility consists of a $30 million term loan divided into two tranches. The first tranche is comprised of $20 million and was funded on the close, and the second tranche of $10 million can be drawn down before 2018 year-end. Additionally, the agreement includes a $10 million revolving credit facility with an option to be increased to $20 million. These new debt facilities replace the existing $15 million term loan in place with HealthCare Royalty Partners, and a $7.5 million revolving credit facility with Silicon Valley Bank.
Merit Medical Systems commenced a public offering of shares of its common stock for $125.0 million. Under the terms of the offering, the company plans to grant the participating underwriters an over-allotment of an additional $18.8 million of shares of common stock. The company’s spine portfolio consists of the STAR Tumor Ablation System, which delivers pain relief and localized tumor destruction, and a full-suite of vertebral compression fracture (VCF) solutions that utilize ultra-high viscosity cement to treat pathological fractures and minimize extravasation. Merit intends to use the offering’s net proceeds to repay a portion of its debt obligations under the company’s outstanding credit facilities.
Micro C secured $0.7 million in a seed round funding. The new capital will be used to support milestones such as building a prototype, testing, FDA submission and launch activities for its portable extremity imaging system. The device is comprised of a compact digital x-ray and multi-modal camera that integrates real-time, HIPPA compliant data and image transmission for the treatment of extremity disorders.
RadiAction Medical secured $5.7 million in a strategic A round of financing led by HighGround Tairun Investment, a co-managed investment fund by Chinese HighGround Capital and Boya Capital. The new capital will be used to support its radiation shielding device for fluoroscopic proceduces.
Vertiflex raised $25.3 million in a round of financing led by 8 undisclosed investors. Approximately $10 million of the funds raised are new funds, while $15.3 million came from conversion of debt. The company has not yet said how it plans to spend the funds raised thus far. Earlier this month, the company secured a $40 million round of financing to support its Superion Indirect Decompression System, a minimally invasive spinal implant designed for the treatment of moderate lumbar spinal stenosis.
Integra LifeSciences offered to acquire Johnson & Johnson’s Codman Neurosurgery business for $1.05 billion in an all-cash transaction. Codman Neurosurgery develops medical devices for the advanced hydrocephalus, neuro-critical care and operative neurosurgery segments. Codman’s existing portfolio and new product pipeline in advanced hydrocephalus, neuro-critical care and electrosurgery complement Integra's products and pipeline in tissue ablation, dural repair and cranial stabilization.
Sussex Wire entered into in an agreement into to acquire Marox Corporation, a manufacturer in computer numeric control (CNC) precision machined orthopedic implants and instruments. Under the terms of the agreement, Sussex Wire and MAROX will continue to operate as separate entities, and each retain their respective management teams and employee base. The acquisition was supported by Argosy Private Equity, a lower middle market private equity firm, which is an investor of Sussex.
India’s National Pharmaceutical Pricing Authority (NPPA) announced that 22 medical devices consisting of heart valves, surgical dressings, condoms, stents, disposable hypodermic syringes and orthopedic implants, identified as “drugs”, should carry the maximum retail price on the packaging. The devices are considered non-scheduled formulations, and as such, the manufacturers are not allowed to increase the price of these devices more than 10% a year. Therefore, this new regulation allows the NPPA to help keep track of companies abusing price changes for these medical devices.
Lima Corporate entered into a collaboration with IPG, a device benefit management solutions provider to create a value-based care delivery system of its orthopedic medical devices across the U.S. Through this partnership, Lima will gain access to IPG’s network of direct partnering facilities and surgeons.
Medtronic entered into a collaboration with Atlas General Hospital in Belgrade, Serbia for the signing of its Integrated Health Solutions (IHS) agreement. With this partnership, both companies will contribute to the improvement of the care experiences of spine patients at the Atlas General Hospital. Under the terms of the agreement, Medtronic will provide spine and minimally invasive technologies, assess workflow systems and manage the operating room to deliver high-quality care in a cost-effective way.
Bioventus announced an investment in clinical study of its EXOGEN Ultrasound Bone Healing System, a low-intensity pulsed ultrasound (LIPUS) to help stimulate the body’s natural healing process, evaluating its ability to mitigate the risk of a fracture progressing to nonunion in the presence of known factures. Previous studies suggest that the device supports healing fractures in patients despite the presence of associated medication use. The new study will build on previous evidence and supplement the system’s present data.
NuVasive received updated guidance from the National Industry for Clinical Excellence (NICE) in the U.K. for its lateral interbody fusion in the lumbar spine. NICE stated that evidence on efficacy for lateral interbody fusion is adequate in quality and quantity and the procedure may be used, provided that standard arrangements are in place for clinical governance, consent and audit. The majority of the evidence submitted and reviewed was peer-reviewed journal articles depicting the experience and outcomes using the company’s eXtreme Lateral Interbody Fusion (XLIF), over a 14 year period.
Spinal Elements announced the completion of the initial procedures using its Lucent XP expandable interbody device, a porous titanium coated interbody device that can expand in height and increase in lordotic angle, upon surgical implantation. The device aims to restore the height of the spinal disc space and correct the curvature of the spine.
Spineway announced the completion of the first minimally invasive surgery in the U.S. using its Mont Blanc MIS line for the treatment of lumbar-spine disorders. The surgery took place in Dallas, TX in a patient with degeneration on several vertebral levels, utilizing eight pedicle screws and two titanium alloy rods. The surgery was a result of the company’s recent distribution agreement with SLR Medical Consulting.
Safe Orthopaedics appointed Jochen Esser as head of sales in Germany. Mr. Esser has over 25 years of sales development and sales force leadership experience in the spinal surgery sector, both in Germany and in international markets. Prior to Safe Orthopaedics, Mr. Esser held various sales positions with Zimmer, and DePuy Synthes. Mr. Esser also served as head of sales Germany at Joinmax and he also built up the company’s sales in Austria and Switzerland.
Spinal Simplicity appointed Gary Henley as an Advisor and will join the company’s Board of Managers. Mr. Henley has over 34 years of experience in the orthopedic industry. Most recently, Mr. Henley served as President, Chief Executive Officer and Board Member of United Orthopedic Group from 2011-2014.