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SeaSpine reported 1Q20 orthopedic revenue of USD $36.1 million, -0.1% vs. 1Q19. The company had significant momentum in 2H19 (+13%) that, according to leadership, carried over into the early portions of the first quarter. COVID-19 procedure deferrals caused an 18% decline in March U.S. spinal implant volumes. These procedure declines were coupled with mid-single digit price pressure. Biologics managed modest growth despite the slowdown on the strength of SeaSpine’s advanced DBM portfolio.
The company estimates April total revenue declined by -60% but believes procedures will gradually return by the end of June. Leadership was further encouraged by improving trends in early May showing revenue down -30% versus the year prior. Based on conversations with surgeons, SeaSpine believes that the patients it serves are in pain and are motivated to return for their scheduled procedures.
The company finished 1Q20 with $105 million in cash and investments, representing a two- to three-year runway of liquidity. To support this flexibility, SeaSpine instituted cost saving measures totaling more than $6 million for 2020. Most operations at its Irvine biologics facility have been suspended and more than $4 million in capital expenditures have been deferred. Progressive tiered pay reductions through June 20 are in effect for approximately 35% of the company, with the biggest cuts coming to the senior leadership team. The most financially at-risk employees, like manufacturing line workers, were exempt from the pay cuts.
SeaSpine committed to driving an aggressive launch schedule in 2020 despite the pandemic, with plans including:
- Alpha launches for an articulating NanoMetalene with Reef Topography implant and anterior compression and disc preparation instruments
- Alpha launches of a hinged TLIF IBD with NanoMetalene and a suite of Explorer lordotic and parallel expanding interbodies
- Alpha launch of a Cervical Facet Fusion System
- Alpha launch of a suite of 3D-printed interbody devices developed in collaboration with restor3D
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Spine | $16.5 | $17.1 | ($0.6) | (3.7%) |
| Orthobiologics | $19.6 | $19.0 | $0.6 | 3.1% |
| Total | $36.1 | $36.2 | ($0.0) | (0.1%) |
Geographic Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $31.8 | $32.0 | ($0.2) | (0.5%) |
| OUS | $4.3 | $4.2 | $0.1 | 3.2% |
| Total | $36.1 | $36.2 | ($0.0) | (0.1%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $36.1 | |
| Cost of Sales | $13.8 | 38.2% |
| Selling and Marking | $20.5 | 56.7% |
| General & Admin | $8.6 | 23.7% |
| R & D | $3.9 | 10.8% |
| Other | $1.9 | 5.3% |
| Net Earnings | ($12.6) | (34.8%) |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
SeaSpine reported 1Q20 orthopedic revenue of USD $36.1 million, -0.1% vs. 1Q19. The company had significant momentum in 2H19 (+13%) that, according to leadership, carried over into the early portions of the first quarter. COVID-19 procedure deferrals caused an 18% decline in March U.S. spinal implant volumes. These procedure declines were...
SeaSpine reported 1Q20 orthopedic revenue of USD $36.1 million, -0.1% vs. 1Q19. The company had significant momentum in 2H19 (+13%) that, according to leadership, carried over into the early portions of the first quarter. COVID-19 procedure deferrals caused an 18% decline in March U.S. spinal implant volumes. These procedure declines were coupled with mid-single digit price pressure. Biologics managed modest growth despite the slowdown on the strength of SeaSpine’s advanced DBM portfolio.
The company estimates April total revenue declined by -60% but believes procedures will gradually return by the end of June. Leadership was further encouraged by improving trends in early May showing revenue down -30% versus the year prior. Based on conversations with surgeons, SeaSpine believes that the patients it serves are in pain and are motivated to return for their scheduled procedures.
The company finished 1Q20 with $105 million in cash and investments, representing a two- to three-year runway of liquidity. To support this flexibility, SeaSpine instituted cost saving measures totaling more than $6 million for 2020. Most operations at its Irvine biologics facility have been suspended and more than $4 million in capital expenditures have been deferred. Progressive tiered pay reductions through June 20 are in effect for approximately 35% of the company, with the biggest cuts coming to the senior leadership team. The most financially at-risk employees, like manufacturing line workers, were exempt from the pay cuts.
SeaSpine committed to driving an aggressive launch schedule in 2020 despite the pandemic, with plans including:
- Alpha launches for an articulating NanoMetalene with Reef Topography implant and anterior compression and disc preparation instruments
- Alpha launches of a hinged TLIF IBD with NanoMetalene and a suite of Explorer lordotic and parallel expanding interbodies
- Alpha launch of a Cervical Facet Fusion System
- Alpha launch of a suite of 3D-printed interbody devices developed in collaboration with restor3D
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Spine | $16.5 | $17.1 | ($0.6) | (3.7%) |
| Orthobiologics | $19.6 | $19.0 | $0.6 | 3.1% |
| Total | $36.1 | $36.2 | ($0.0) | (0.1%) |
Geographic Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $31.8 | $32.0 | ($0.2) | (0.5%) |
| OUS | $4.3 | $4.2 | $0.1 | 3.2% |
| Total | $36.1 | $36.2 | ($0.0) | (0.1%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $36.1 | |
| Cost of Sales | $13.8 | 38.2% |
| Selling and Marking | $20.5 | 56.7% |
| General & Admin | $8.6 | 23.7% |
| R & D | $3.9 | 10.8% |
| Other | $1.9 | 5.3% |
| Net Earnings | ($12.6) | (34.8%) |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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ME
Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
