Orthofix Reports 2Q17 Revenue

by Julie A. Vetalice on August 11, 2017

Orthofix posted 2Q17 revenue of US $108.9MM, +4.7% from 2Q16, and 1H17 revenue of $211.7MM, +4.4% vs. 1H16. Based on strong 1H performance, full-year revenue guidance was updated from $411MM-$415MM to $422MM-$425MM which, if achieved, would mark the second year of 3-4% YOY growth.

	2Q17	2Q16	$ Change	% Change
Trauma	$24.7	$26.8	-$2.1	-7.7%
Spine	$21.4	$18.2	$3.1	17.1%
Orthobiologics	$15.7	$14.3	$1.4	9.9%
Other (Bone Stim)	$47.2	$44.8	$2.4	5.4%
Total	$108.9	$104.1	$4.9	4.7%

	1H17	1H16	$ Change	% Change
Trauma	$48.7	$51.5	-$2.8	-5.5%
Spine	$40.6	$37.1	$3.6	9.6%
Orthobiologics	$30.6	$28.4	$2.3	8.1%
Other (Bone Stim)	$91.7	$85.8	$5.9	6.9%
Total	$211.7	$202.8	$8.9	4.4%

Performance highlights:

Trauma sales impacted by ex-U.S. restructuring (divested a non-core U.K. business), slower sales in Brazil and Puerto Rico during conversion from direct to stocking distributor model, decrease in cash collections from ex-U.S. distributors
Trauma decrease partially offset by continued adoption of TL-HEX line
Commenced U.S. limited launch of RIVAL, first full-line internal foot/ankle fixation system; features a universal instrument set that supports >50 indications in one tray
15 RIVAL sets in field now; expecting 60 within the next 60 days (compare this to a typical limited launch in spine, which includes ~20 sets—reflects confidence in product acceptance during limited launch)
Spine supported by new distributors added over last several quarters, improved distributor engagement and new products, partially offset by lower ex-U.S. sales and decrease in cash collections from ex-U.S. distributors
Logged >$1MM in sales of CETRA Anterior Cervical Plate at 5 months since launch; product supports pull-through of interbody and biologics sales
Planning 4Q launch of FORZA XP expandable interbody, filling that gap in portfolio
Increase in Trinity Elite biologic sales driven by new distributors added over past 12 months, improved performance of U.S. distribution partner and reacquisition of a national hospital contract
Noted pipeline of products in development with Musculoskeletal Transplant Foundation
Growth in BioStim continues to benefit from positive NASS coverage recommendation, next-gen products, an engaged salesforce
>20% of bone stim device patients are using the Stim onTrack mobile app, a tool for patient engagement
FDA approved a 540-patient pivotal human clinical IDE study for pulsed electromagnetic field (PEMF) technology as an adjunct to rotator cuff surgery; enrollment to commence this year
PEMF knee OA study should be fully enrolled at 150 patients in early 2018 (later than end of 2017, as previously expected)
Prioritizing JuniOrtho and foot/ankle portfolio expansions; in 2Q, launched four new pediatric and two new foot/ankle products or line extensions
JuniOrtho-branded pediatric/adolescent-focused products account for 1/3 of extremity fixation sales

Source: Orthofix International N.V.

Q17
Q16 ...

	2Q17	2Q16	$ Change	% Change
Trauma	$24.7	$26.8	-$2.1	-7.7%
Spine	$21.4	$18.2	$3.1	17.1%
Orthobiologics	$15.7	$14.3	$1.4	9.9%
Other (Bone Stim)	$47.2	$44.8	$2.4	5.4%
Total	$108.9	$104.1	$4.9	4.7%

	1H17	1H16	$ Change	% Change
Trauma	$48.7	$51.5	-$2.8	-5.5%
Spine	$40.6	$37.1	$3.6	9.6%
Orthobiologics	$30.6	$28.4	$2.3	8.1%
Other (Bone Stim)	$91.7	$85.8	$5.9	6.9%
Total	$211.7	$202.8	$8.9	4.4%

Performance highlights:

Trauma sales impacted by ex-U.S. restructuring (divested a non-core U.K. business), slower sales in Brazil and Puerto Rico during conversion from direct to stocking distributor model, decrease in cash collections from ex-U.S. distributors
Trauma decrease partially offset by continued adoption of TL-HEX line
Commenced U.S. limited launch of RIVAL, first full-line internal foot/ankle fixation system; features a universal instrument set that supports >50 indications in one tray
15 RIVAL sets in field now; expecting 60 within the next 60 days (compare this to a typical limited launch in spine, which includes ~20 sets—reflects confidence in product acceptance during limited launch)
Spine supported by new distributors added over last several quarters, improved distributor engagement and new products, partially offset by lower ex-U.S. sales and decrease in cash collections from ex-U.S. distributors
Logged >$1MM in sales of CETRA Anterior Cervical Plate at 5 months since launch; product supports pull-through of interbody and biologics sales
Planning 4Q launch of FORZA XP expandable interbody, filling that gap in portfolio
Increase in Trinity Elite biologic sales driven by new distributors added over past 12 months, improved performance of U.S. distribution partner and reacquisition of a national hospital contract
Noted pipeline of products in development with Musculoskeletal Transplant Foundation
Growth in BioStim continues to benefit from positive NASS coverage recommendation, next-gen products, an engaged salesforce
>20% of bone stim device patients are using the Stim onTrack mobile app, a tool for patient engagement
FDA approved a 540-patient pivotal human clinical IDE study for pulsed electromagnetic field (PEMF) technology as an adjunct to rotator cuff surgery; enrollment to commence this year
PEMF knee OA study should be fully enrolled at 150 patients in early 2018 (later than end of 2017, as previously expected)
Prioritizing JuniOrtho and foot/ankle portfolio expansions; in 2Q, launched four new pediatric and two new foot/ankle products or line extensions
JuniOrtho-branded pediatric/adolescent-focused products account for 1/3 of extremity fixation sales

Source: Orthofix International N.V.