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Xtant Medical posted 2Q17 revenue of US $21.4MM, -0.3% vs. 2Q16, with 1H17 revenue of $43.5MM, +2.5% vs. 1H16. Gains in orthobiologic product sales were balanced out almost evenly by decreases in fixation hardware revenue.
ORTHOWORLD estimates segment revenue and as-reported growth as follows.
| 2Q17 | 2Q16 | $ Change | % Change | |
| Spine | $9.3 | $11.4 | -$2.1 | -18.6% |
| Orthobiologics | $12.1 | $10.1 | $2.1 | 20.5% |
| Total | $21.4 | $21.5 | -$0.1 | -0.3% |
| 1H17 | 1H16 | $ Change | % Change | |
| Spine | $21.0 | $22.5 | -$1.6 | -6.9% |
| Orthobiologics | $22.5 | $19.9 | $2.6 | 13.1% |
| Total | $43.5 | $42.4 | $1.1 | 2.5% |
Performance highlights follow.
Within 2Q, Xtant recorded record OsteoVive viable cell allograft revenue at ~$0.47MM, up +92% sequentially from 1Q17. 3Demin demineralized cortical fiber sales reached $1.5MM, +48% vs. 2Q16.
Osteobiologics growth is primarily attributed to the work of legacy hardware distributors pulling through more biologics, due to portfolio selling initiatives—in other words, complementing hardware with biologics. Leadership indicates that over half of 1H17 revenue was generated by distributors marketing both product lines.
Sixteen new contracts signed in 2Q, covering hardware and biologics, added 250 new facilities into which Xtant will sell products.
During 2Q17, the company recorded a charge of ~$0.3MM for excessive wear and tear on fixation instruments and ~$0.2MM in discarded biologics inventory that was about to expire.
A priority focus for 2H17 is the maximization of gross profit and reduction of selling costs. Recently-promoted leadership in Operations and Hardware R&D have teams well-ahead of cost-savings goals in inventory reduction, kit utilization and optimization.
In mid-2Q, Xtant entered a licensing agreement with Sites Medical for use of OsteoSync Ti highly-porous titanium scaffold technology. Xtant estimates that the total addressable U.S. market for its OsteoSync Ti products is $2.5BB, with a 5-year CAGR approaching 4.75%. First products are slated to be showcased at NASS 2017.
Sources: Xtant Medical; ORTHOWORLD estimates
Xtant Medical posted 2Q17 revenue of US $21.4MM, -0.3% vs. 2Q16, with 1H17 revenue of $43.5MM, +2.5% vs. 1H16. Gains in orthobiologic product sales were balanced out almost evenly by decreases in fixation hardware revenue.
ORTHOWORLD estimates segment revenue and as-reported growth as follows.
Q17 ...
Xtant Medical posted 2Q17 revenue of US $21.4MM, -0.3% vs. 2Q16, with 1H17 revenue of $43.5MM, +2.5% vs. 1H16. Gains in orthobiologic product sales were balanced out almost evenly by decreases in fixation hardware revenue.
ORTHOWORLD estimates segment revenue and as-reported growth as follows.
| 2Q17 | 2Q16 | $ Change | % Change | |
| Spine | $9.3 | $11.4 | -$2.1 | -18.6% |
| Orthobiologics | $12.1 | $10.1 | $2.1 | 20.5% |
| Total | $21.4 | $21.5 | -$0.1 | -0.3% |
| 1H17 | 1H16 | $ Change | % Change | |
| Spine | $21.0 | $22.5 | -$1.6 | -6.9% |
| Orthobiologics | $22.5 | $19.9 | $2.6 | 13.1% |
| Total | $43.5 | $42.4 | $1.1 | 2.5% |
Performance highlights follow.
Within 2Q, Xtant recorded record OsteoVive viable cell allograft revenue at ~$0.47MM, up +92% sequentially from 1Q17. 3Demin demineralized cortical fiber sales reached $1.5MM, +48% vs. 2Q16.
Osteobiologics growth is primarily attributed to the work of legacy hardware distributors pulling through more biologics, due to portfolio selling initiatives—in other words, complementing hardware with biologics. Leadership indicates that over half of 1H17 revenue was generated by distributors marketing both product lines.
Sixteen new contracts signed in 2Q, covering hardware and biologics, added 250 new facilities into which Xtant will sell products.
During 2Q17, the company recorded a charge of ~$0.3MM for excessive wear and tear on fixation instruments and ~$0.2MM in discarded biologics inventory that was about to expire.
A priority focus for 2H17 is the maximization of gross profit and reduction of selling costs. Recently-promoted leadership in Operations and Hardware R&D have teams well-ahead of cost-savings goals in inventory reduction, kit utilization and optimization.
In mid-2Q, Xtant entered a licensing agreement with Sites Medical for use of OsteoSync Ti highly-porous titanium scaffold technology. Xtant estimates that the total addressable U.S. market for its OsteoSync Ti products is $2.5BB, with a 5-year CAGR approaching 4.75%. First products are slated to be showcased at NASS 2017.
Sources: Xtant Medical; 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.
