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Current & Critical

Growth Strategies in Action: Leaders in Spine

In observing the lineup of spine revenue over $100 million halfway through the year, as shown in Exhibit 1, we note that NuVasive stands at the forefront of growth while pure-play companies like Globus and K2M are outperforming their diversified peers in the field. (Please note, the numbers below exclude orthobiologics.)


Exhibit 1
Spine Segment Sales, 1H16 vs. 1H15 ($MM)



For reference, here’s how most of these companies ended last year in the segment: Exhibit 2 represents market share standings for 2015, and is excerpted from THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT®.

 

Exhibit 2
Spine Market Share: Largest Players and All Others, 2015



What actions have these companies undertaken to complement their current offerings, broaden their portfolios and grow their share of the market before the end of 2016? Let’s look at what’s gone down in the first half.



MEDTRONIC


 

DEPUY SYNTHES


 

  • Per intel gathered at the Business Review Day, pipeline plan through 2018 has seven products that pertain to spine, including a navigation system and expandable interbody cage
  • Plans to close key portfolio gaps with targeted M&A, upgrade key platforms and simplify the current portfolio (suggests brand reduction)
  • Also noted at Review Day, spine is important to cross-selling efforts in other businesses, like Surgical, and JNJ’s strength in scale will be of extreme value for the spine segment as regulatory challenges ex-U.S. just grow and grow: JNJ’s scale should lend needed muscle to gain regulatory wins


     

NUVASIVE


 

  • Acquired Mega Surgical, its exclusive distributor in Brazil, as well as Biotronic NeuroNetwork and Ellipse Technologies—supplementary to its existing neurophysiological monitoring and scoliosis lines, respectively
  • Secured a CMS add-on payment for MAGEC magnetically-controlled growth rods, cleared by FDA for the treatment of pediatric spinal deformity
  • Gaining momentum with the iGA (Integrated Global Alignment) system, which drives pull-through of spinal hardware sales (specifically, leadership has noted progress in securing contracts with U.S. healthcare systems for bundled offerings that include the NVM5 nerve monitoring system and iGA)


     

STRYKER


 

  • Acquisition of Safewire brought products that support minimally invasive procedures; the company also snapped up BD’s vertebral augmentation portfolio, which was cleared via FDA 510(k) under CareFusion
  • Reporting good demand for 3D-printed Tritanium Posterior Lumbar Cages
  • Co-promoting EU spine business with the EOS imaging platform to existing and prospective customers in the U.K.
  • Launched what is reportedly the only ACDF device to offer uniform compression across the interbody space: the Aero®-C Cervical Stability System, which also offers a less disruptive approach vs. traditional screw-based ACDF


     

GLOBUS MEDICAL


 

  • Took steps to double its ex-U.S. revenue by picking up Alphatec Spine’s international business, gaining immediate access to Brazil and Japan, as well as sales operations in Italy and the U.K.
  • Starting to hire reps for navigation/robotics division will start within 2016


     

ZIMMER BIOMET


 

  • Acquired LDR and Medtech
  • LDR’s Mobi-C cervical disc has FDA approval for 2-level applications, and transaction brings cross-selling of portfolios that also address minimally invasive procedures and complex spine, coupled with biologics
  • Medtech’s ROSA™ Spine robotic-assistive device for minimally invasive surgery received CE Mark approval in 2014 and FDA 510(k) clearance in 1Q16; 100 spinal surgeries have been successfully performed with the system


     

K2M