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Product / Company Performance

SeaSpine Reports 4Q18 Revenue of $38MM, +11.9% vs. 4Q17 -

By Mike Evers, ORTHOWORLD

SeaSpine reported 4Q18 revenue of USD $38MM, +11.9% vs. 4Q17, with 2018 full year revenue of $143.5MM, +8.8% vs. 2017. The company’s growth accelerated to double-digits in the second half of 2018, with both spinal implants and orthobiologics performing well over that stretch. Moving into 2019, SeaSpine expects another strong second half and provided guidance in the range of $152MM to $156MM, growth of 6% to 9%.

New and recent products have been integral in the company’s revenue growth, contributing 50% of U.S. spinal implant revenue for 4Q and 45% for the full year. New instrument sets for the Shoreline and Mariner systems increased 40% over the prior year, while new biologics products commercialized in 2018 accounted for 20% of U.S. biologics revenue in 4Q. SeaSpine’s cadence of new products has also helped the company attract better, more exclusive distributors. Distributors onboarded since 2016 contributed more than 40% of all revenue for both 4Q and full year 2018.

The company plans to carry that same aggressive launch activity into 2019 as it looks to fill gaps in its portfolio and update legacy products to reflect current clinical practice and philosophy. SeaSpine CEO Keith Valentine said, “A number of the items we talked about for 2019 will be product line extensions or updates. Those updates are critical, because there’s been a slight change in how they want instrumentation and implants to perform for different pathologies, and we have to update our items for that.”

In the fourth quarter, the company initiated alpha launch of the Mariner Cortical System, a midline cortical approach commonly performed in ASCs. Full commercial launch is expected in 2H19. SeaSpine will also continue to leverage its modular Mariner system with Mariner Outrigger (designed to support use of the Mariner system in revision surgeries) and Mariner MIS (for percutaneous and mini-open procedures) near midyear. The Shoreline anterior cervical interbody system will get an extension in 3Q19 that incorporates SeaSpine’s NanoMetalene REEF technology.

In late 2019, the company will also introduce a new packaging configuration for OsteoStrand and Osteostrand Plus biologics to simplify the intraoperative hydration method for the DBM fibers and improve procedural integration with their Rapid Graft Delivery system. Additionally, SeaSpine has signed a distribution agreement with Kuros Biosciences to market their proprietary bone graft technology under the brand name OsteoCurrent.

While SeaSpine has no planned formal announcements regarding robotics, leadership did say they see an opportunity in the market for lower cost options that fit well with a surgeon’s procedural flow. The company believes that the technology must be affordable for regional centers and ASCs, where many procedures are going in the future.

Segment sales and growth on an as-reported basis:

  4Q18 4Q17 $ Change % Change
Spine $17.9 $15.9 $1.9 12.2%
Orthobiologics $20.2 $18.1 $2.1 11.6%
Total  $38.0 $34.0 $4.0 11.9%
  FY18 FY17 $ Change % Change
Spine $68.1 $62.7 $5.4 8.7%
Orthobiologics $75.3 $69.1 $6.2 9.0%
Total  $143.5 $131.8 $11.7 8.8%

Revenue by geographic region:

Geographic Region 4Q18 4Q17 $ Change % Change
US $34.0 $31.2 $2.8 9.0%
Ex-US $4.0 $2.8 $1.3 44.9%
Total  $38.0 $34.0 $4.0 11.9%

Net earnings:

4Q18 Amount ($MM) % of Sales
Sales $38.0  
   Cost of Sales -$15.0 39.4%
   Other -$0.8 2.2%
   R & D -$3.3 8.6%
   Selling and Admin -$28.4 74.8%
Net Earnings  -$9.5 -25.1%

 

Sources: SeaSpine

Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.

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