Alphatec 2Q18 Revenue

Alphatec (ATEC) reported 2Q18 revenue of US $22.0MM, -9.8% vs. 2Q17, and 1H18 revenue of $43.4MM, -17.3% vs. 1H17.

ORTHOWORLD estimates for segments and growth follow.

Globus Medical acquired Alphatec’s ex-U.S. operations and distribution channels in 2016; therefore, there are no geographic segments to report.

During 2Q, ATEC hosted a record number of surgeons for educational programs, and revenue driven by new surgeons more than doubled sequentially from 1Q18. During June, average daily sales and shipping volumes reached their highest level of the year, even without new products.

Over 80% of ATEC revenue is generated by products developed and launched in or before 2016. Leadership expects increasing contribution to revenue from 12 new product alpha launches in 2H18.

The FDA 510(k) for acquired SafeOp automated neuromonitoring technology is not yet secured, though it’s expected to occur in this quarter. The delay was attributed to being placed behind larger spine companies for testing requirements. It’s still on track for a 2019 launch.

The company continues to transition to a dedicated distribution network and re-engage legacy surgeons. In 2Q, 57% of revenue derived from dedicated distribution, up from 40% at the end of 2017. ATEC will continue to terminate non-dedicated distribution relationships that don’t serve the long-term vision.

ATEC’s leadership rolls grew, with appointments of a new Area Vice President for the South Central Region and Vice President in Sales Channel Development. The company also hired Robert Judd, formerly of NuVasive, as Vice President of Finance and Controller.

Sources: Alphatec; ORTHOWORLD estimates