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Product / Company Performance

NuVasive Posts 1Q18 Revenue -

NuVasive (NUVA) reported 1Q18 revenue of US $260.5MM, +4.6% vs. 1Q17.

ORTHOWORLD estimates for segment sales and growth follow.

  1Q18  1Q17  $ Change  % Change 
 Spine $224.1  $212.4  $11.7  5.5% 
 Trauma $8.7  $7.6  $1.1  14.4% 
 Orthobiologics $27.7  $29.0  -$1.3  -4.4% 
Total  $260.5  $249.0  $11.6  4.6% 

Strong international growth, improving performance in biologics and more discussion of the surgical intelligence platform to come were high points in the NUVA call.

Ex-U.S. sales grew by 28% year over year, with emerging markets called out like South Africa and Saudi Arabia. Japan continues to benefit from the relaunch of XLIF in 1Q17. Brazil sales more than doubled vs. 1Q17. On the down side, Puerto Rico is still challenged by hurricane aftereffects, and the U.K. experienced limited hospital bed availability during a particularly tough flu season.

Spinal hardware benefited from 5% case volume growth and new products, offset by price pressure; surgical support (biologics, clinical services, etc.) was buoyed by $4.5MM in SafePassage revenue and sales of LESSRAY that were offset by lower clinical services case volume. Specific growth drivers included the TLIF expandable cage, RELINE Small Stature, XLIF Modulus and the COHERE PEEK interbody implant. Early adoption of Lateral Single-Position Surgery is going well. Further, PRECICE limb lengthening and RELINE Trauma products are creating product pull-through and gaining new users in the adolescent idiopathic space.

Regarding biologics, in 1Q, NUVA adjusted prices to meet the market price, which was long overdue, and started to work with the salesforce to integrate biologics into the selling process. Expect to see a broader biologic product offering to come.

Finally, in clinical services, NUVA has exited certain accounts that didn’t meet profitability targets.

The manufacturing facility in Ohio is expected to ramp production during 2H18. On a per-unit basis, NUVA is driving unit costs down; however, the present hurdle at the Ohio plant relates to total throughput: they’re not producing enough of them yet.

The Surgical Intelligence Platform, mentioned in the 4Q17 call, will be unveiled at NASS 2018, and slides accompanying the 1Q call mapped the six phases that will integrate neuromonitoring, surgical planning, radiation reduction, navigation/imaging, cloud integration/data connectivity and data insights/smart tools to optimize the O.R.

When asked to comment on perceived shortfalls of robotics technology in the spine segment, CEO Gregory Lucier responded, “We have been consistent in our opinion [that] in the world of healthcare, the last thing the O.R. needs is the addition of $1 million piece of hardware that basically only does one thing and that is help place pedicle screws. [W]hat’s needed in the O.R. is more sophisticated navigation, radiation reduction and smart automation: the right tasks at the right economics.”

Further commenting on breaking into ASCs, Lucier continued, “[M]ost of the growth of spine procedures will happen outside of hospitals. [W]e’re designing systems for where surgery has to be a couple of years from now, not where it is today.” Expect more detail at NASS.

Sources: NuVasive, Inc.; ORTHOWORLD estimates

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