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NuVasive (NUVA) reported 3Q17 revenue of US $247.4MM, +3.2% vs. 3Q16, and year-to-date revenue of $757.9MM, +9.7% vs. the prior year. Estimated segment sales and growth follow.
3Q17 Geographic growth: U.S. $200.9MM, -3.5%; ex-U.S. $46.4MM, +48.1%
| 3Q17 | 3Q16 | $ Change | % Change | |
| Spine | $211.8 | $199.3 | $12.4 | 6.2% |
| Trauma | $8.9 | $8.6 | $0.3 | 3.2% |
| Orthobiologics | $26.8 | $31.7 | -$4.9 | -15.6% |
| Total | $247.4 | $239.6 | $7.8 | 3.2% |
| 9 Mo 17 | 9 Mo 16 | $ Change | % Change | |
| Spine | $642.0 | $573.2 | $68.8 | 12.0% |
| Trauma | $25.2 | $20.2 | $5.1 | 25.0% |
| Orthobiologics | $90.6 | $97.5 | -$6.9 | -7.1% |
| Total | $757.9 | $691.0 | $66.9 | 9.7% |
This is the first time since 4Q15/2015 that NuVasive has reported revenue growth in single digits.
The company’s ex-U.S. business is doing well—posting its fourth consecutive quarter of above-20% growth. Strong demand prevailed in Italy, Germany and Japan. Ex-U.S. growth is expected to continue in the future.
However, biologics, weather and one less selling day took a toll, in 3Q. Weather disruptions negatively affected revenue by ~$5MM in the quarter. Leadership noted that, excluding the impact of hurricanes and one less selling day, overall 3Q17 growth would have been about 6% rather than 3%.
New leadership has been put in place to address erosion in biologics, which is affected by competitive products and lower procedure volume. (Long-term, NUVA seeks to lower the need for biologics with advanced materials engineering for implants.)
Like others in the industry, NUVA saw lower U.S. procedure volumes in 3Q—noting growth of 1% year over year, lower than expected. Payor pushback, hurricanes and changing payor mix appear to be making a mark.
Despite that, good performance in the U.S. came from greater penetration in the deformity market with ReLine posterior fixation and new products (an interfixated ALIF system, TLX expandable cage, ReLine Small Stature and the 3D-printed titanium Modulus XLIF).
In the last month of the quarter, NUVA launched LessRay radiation-exposure reducing software, and acquired Vertera Spine. Surgeon interest is high for LessRay, which is in use in over a dozen hospitals around the U.S. Based on customer preference for lease vs. outright purchase of the system, NUVA reduced 4Q LessRay revenue expectations to $1MM, down from the $2MM to $3MM previously expected.
With the Vertera purchase, NUVA is now the sole device company offering both PEEK and titanium porous interbody devices to suit surgeon preference and encourage bone ingrowth. NUVA will sell COHERE cervical and COALESCE lumbar interbody fusion systems in the U.S., and plans to apply porous PEEK technology to its product development pipeline.
After the quarter’s close, some dust arose with the filing of a suit against the company’s former executive and Vice Chairman. The suit asserts that Mr. Patrick Miles advised NUVA to pass on the opportunity to acquire Alphatec (ATEC) in 2016, then secured a stake in ATEC and arranged to divert corporate opportunities to the smaller company, improving the value of his stake. (ATEC has responded that the complaint is a PR stunt and full of false claims.)
NuVasive leadership has reduced full-year revenue guidance by $35.0MM, reflecting 3Q results, the impact of the hurricane in 3Q through year-end, currency headwinds and an anticipated 4Q drop in U.S. procedure volumes. Guidance is now ~$1,030.0MM, down from ~$1,065.0MM—still breaking the billion dollar mark. Full-year revenue growth will primarily derive from share gains due to shifts to less-invasive spine surgery, new products and services and ex-U.S. growth.
Sources: NuVasive, Inc.; ORTHOWORLD estimates
NuVasive (NUVA) reported 3Q17 revenue of US $247.4MM, +3.2% vs. 3Q16, and year-to-date revenue of $757.9MM, +9.7% vs. the prior year. Estimated segment sales and growth follow.
3Q17 Geographic growth: U.S. $200.9MM, -3.5%; ex-U.S. $46.4MM, +48.1%
Q17
Q16
$ Change ...
NuVasive (NUVA) reported 3Q17 revenue of US $247.4MM, +3.2% vs. 3Q16, and year-to-date revenue of $757.9MM, +9.7% vs. the prior year. Estimated segment sales and growth follow.
3Q17 Geographic growth: U.S. $200.9MM, -3.5%; ex-U.S. $46.4MM, +48.1%
| 3Q17 | 3Q16 | $ Change | % Change | |
| Spine | $211.8 | $199.3 | $12.4 | 6.2% |
| Trauma | $8.9 | $8.6 | $0.3 | 3.2% |
| Orthobiologics | $26.8 | $31.7 | -$4.9 | -15.6% |
| Total | $247.4 | $239.6 | $7.8 | 3.2% |
| 9 Mo 17 | 9 Mo 16 | $ Change | % Change | |
| Spine | $642.0 | $573.2 | $68.8 | 12.0% |
| Trauma | $25.2 | $20.2 | $5.1 | 25.0% |
| Orthobiologics | $90.6 | $97.5 | -$6.9 | -7.1% |
| Total | $757.9 | $691.0 | $66.9 | 9.7% |
This is the first time since 4Q15/2015 that NuVasive has reported revenue growth in single digits.
The company’s ex-U.S. business is doing well—posting its fourth consecutive quarter of above-20% growth. Strong demand prevailed in Italy, Germany and Japan. Ex-U.S. growth is expected to continue in the future.
However, biologics, weather and one less selling day took a toll, in 3Q. Weather disruptions negatively affected revenue by ~$5MM in the quarter. Leadership noted that, excluding the impact of hurricanes and one less selling day, overall 3Q17 growth would have been about 6% rather than 3%.
New leadership has been put in place to address erosion in biologics, which is affected by competitive products and lower procedure volume. (Long-term, NUVA seeks to lower the need for biologics with advanced materials engineering for implants.)
Like others in the industry, NUVA saw lower U.S. procedure volumes in 3Q—noting growth of 1% year over year, lower than expected. Payor pushback, hurricanes and changing payor mix appear to be making a mark.
Despite that, good performance in the U.S. came from greater penetration in the deformity market with ReLine posterior fixation and new products (an interfixated ALIF system, TLX expandable cage, ReLine Small Stature and the 3D-printed titanium Modulus XLIF).
In the last month of the quarter, NUVA launched LessRay radiation-exposure reducing software, and acquired Vertera Spine. Surgeon interest is high for LessRay, which is in use in over a dozen hospitals around the U.S. Based on customer preference for lease vs. outright purchase of the system, NUVA reduced 4Q LessRay revenue expectations to $1MM, down from the $2MM to $3MM previously expected.
With the Vertera purchase, NUVA is now the sole device company offering both PEEK and titanium porous interbody devices to suit surgeon preference and encourage bone ingrowth. NUVA will sell COHERE cervical and COALESCE lumbar interbody fusion systems in the U.S., and plans to apply porous PEEK technology to its product development pipeline.
After the quarter’s close, some dust arose with the filing of a suit against the company’s former executive and Vice Chairman. The suit asserts that Mr. Patrick Miles advised NUVA to pass on the opportunity to acquire Alphatec (ATEC) in 2016, then secured a stake in ATEC and arranged to divert corporate opportunities to the smaller company, improving the value of his stake. (ATEC has responded that the complaint is a PR stunt and full of false claims.)
NuVasive leadership has reduced full-year revenue guidance by $35.0MM, reflecting 3Q results, the impact of the hurricane in 3Q through year-end, currency headwinds and an anticipated 4Q drop in U.S. procedure volumes. Guidance is now ~$1,030.0MM, down from ~$1,065.0MM—still breaking the billion dollar mark. Full-year revenue growth will primarily derive from share gains due to shifts to less-invasive spine surgery, new products and services and ex-U.S. growth.
Sources: NuVasive, Inc.; ORTHOWORLD estimates
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JV
Julie Vetalice is ORTHOWORLD's Editorial Assistant. She has covered the orthopedic industry for over 20 years, having joined the company in 1999.
