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Recent Activities Further Progress for 2-level Cervical Disc Replacement in the U.S.

Recent announcements have brought new players to the 2-level cervical disc replacement market in the U.S. Zimmer Biomet finalized its $1 billion acquisition of LDR, which added Mobi-C to its spine portfolio, while Medtronic received FDA Premarket Approval for a 2-level application for Prestige LP.

Mobi-C had been the only 2-level disc on the U.S. market. Expanded reimbursement coverage, updated labeling claims and published peer-reviewed papers resulted in U.S. Mobi-C sales increasing 80% in 2015 vs. 2014.  

Further, in April 2016, LDR reported that Mobi-C surpassed >$100MM in cumulative U.S. revenue since its 2013 launch. Half of the Mobi-C units sold are for 1-level indications and half are for 2-level indications. 

The acquisition of LDR allows Zimmer Biomet to capture about 1% of the worldwide spine market, increasing its share of the market to about 5%, according to ORTHOWORLD estimates. While the purchase of LDR also expands Zimmer Biomet’s traditional cervical and lumbar offerings, Mobi-C is presumably the technology that attracted Zimmer Biomet in seeking to enhance its portfolio.

Medtronic’s entry into the 2-level market is expected to put competitive pressure on Zimmer Biomet and Mobi-C. The 2-level discs will be sold in a small market that faces a lack of reimbursement. To dive into specifics, >50 million lives are covered for Mobi-C’s 2-level procedure, and ORTHOWOLD estimates place the total artificial disc market at ~$275 million in 2016. 

Medtronic’s clout as the largest player in the global spine market, with nearly 30% market share, could drive increased reimbursement coverage and spur market expansion, analysts have said, but the volume and pace of that growth is hard to predict.

Still, Medtronic clearly sees promise in the disc market. In 2Q16, it released data showing that the Prestige LP 2-level disc demonstrated favorable clinical outcomes and patient satisfaction vs. 2-level anterior cervical discectomy and fusion. Though the company has yet to launch the Prestige LP 2-level disc, leadership has said that it is one of a handful of new products among its strategies to invigorate growth in its spine business.

Overall, Medtronic’s worldwide spine sales decreased 4.3% from $2.5 billion in 2014 to $2.4 billion in 2015. (Please note that ORTHOWORLD estimates exclude biologics.) Medtronic also recently restructured its Restorative Therapies Group, which includes spine, orthobiologics, neuro and surgical technologies, to turn the business around. 

The upside for the two companies is that the barrier for approval for a 2-level disc in the U.S. is quite high, e.g. Medtronic’s study took seven years to complete, which is not uncommon. Therefore, Medtronic and Zimmer Biomet are only competing against each other in the 2-level cervical disc market for the foreseeable future.