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Product / Company Performance

SeaSpine 2Q18 Revenue +7% vs. 2Q17 -

SeaSpine (SPNE) announced 2Q18 revenue of US $36.4MM, +6.5% vs. 2Q17, and 1H18 revenue of $69.6MM, +5.3% vs. 1H17. This is the company’s highest quarterly growth rate since its spinoff from Integra LifeSciences in 2015.

  2Q18  2Q17  $ Change  % Change 
 Spine $17.8  $16.6  $1.2  7.0% 
 Orthobiologics $18.6  $17.6  $1.0  5.9% 
Total  $36.4  $34.2  $2.2  6.5% 


  1H18  1H17  $ Change  % Change 
 Spine $33.0  $31.4  $1.6  5.1% 
 Orthobiologics $36.6  $34.7  $1.9  5.5% 
Total  $69.6  $66.1  $3.5  5.3% 

Revenue by geographic region:

  2Q18  1H18 
 U.S.  $32.6  $62.2 
 Ex-U.S. $3.8  $7.4 

SeaSpine is now in a share-taking position in the spine market, and has posted its highest quarterly growth rates since its spinoff from Integra LifeSciences in 2015. Leadership has conservatively updated the lower end of 2018 revenue guidance by $1MM for a new range from $136MM to $139MM, reflecting growth of 3.2% to 5.5% vs. 2017.

Overall, current and future growth are attributed to growing market penetration with new products, an engaged and increasingly exclusive distribution network and a deep commitment to education and training. President and CEO Keith Valentine notes that SPNE is able to take advantage of market share losses from some struggling larger players—that’s where new customers are coming from. Also, the company is going deeper into existing accounts.

Spinal implant revenue was primarily supported by the Mariner pedicle-based system for posterior spinal fixation (launched mid-2017) and the Shoreline anterior cervical standalone system (launched in 3Q17). In Orthobiologics, growth was led by OsteoStrand demineralized bone fibers and OsteoBallast demineralized bone matrix in resorbable mesh, which both entered limited launch in 4Q17.

Within the quarter, SPNE transitioned OsteoBallast and OsteoStrand to full commercial launch. OsteoStrand Plus will fully launch by the end of 3Q18. Mr. Valentine noted that the strand material, having performed well in studies, brings the ability to go after premium orthobiologics at a more competitive price.

Further, in 2Q, they launched the comprehensive posterior decompression and disc prep instrument system, as well as instrumentation designed for use with a frequently-used third-party cervical navigation system, both alluded to in the 1Q18 call.

Revenue from products launched since the spinoff—Shoreline, Mariner and Nanometalene-surface-enhanced interbodies—now comprise >45% of U.S. spinal revenue, up from 28% in 2Q17.

After the quarter, SPNE gained FDA 510(k) clearance for REGATTA, a lateral implant and instrumentation system using NanoMetalene technology, which is slated for 4Q18 launch. Year-end will also see launch of additional instrument sets that will expand the navigation system-compatible instrumentation to support the Malibu and Newport MIS posterior fixation system, as well as 20 new sets each for Shoreline, Mariner and Ventura interbodies—another major factor driving future growth.

Sources: SeaSpine; ORTHOWORLD Inc.

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