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NuVasive and Alphatec Idea Proposal (NUVA, ATEC)

NuVasive and Alphatec Idea Proposal (NUVA, ATEC)
 

Does either NuVasive or Alphatec have a competitive edge in the spine surgery market?

Report Available: November 3, 2021

 

Blueshift Research found NUVA and ATEC in relative litigious calm compared to the past four years in which the companies engaged in several legal battles. The cases centered on possible inappropriate actions by former NUVA CEO Patrick Miles jumping ship to become CEO at ATEC, along with numerous potential patent infringements by both companies. Despite the legal battles, each company has continued to innovate and prosper in the highly competitive spine surgery device market. As two of the top companies in the industry, they are both dedicated to researching and developing new devices and procedures to improve the outcomes of spine surgery. What is unclear is if one company has a competitive edge on the other, and which has more mind share among spine surgeons and their medical teams.

 

Observations

  1. NUVA, established in 1997, is a leading medical device company focused on developing minimally disruptive surgical products and procedures for the spine. NUVA introduced a new approach to minimally invasive surgery called Maximum Access Surgery (MAS). The flagship procedure is the XLIF (eXtreme Lateral Interbody Fusion) procedure, a minimally disruptive procedure that allows spine surgeons to have direct access to the intervertebral space from the side of the body, as opposed to the front or back. NUVA claims a market share of approximately 16%. Recent highlights include:
    • 30: The first commercial cases using NUVA’s Pulse Platform for spine surgery were completedin Ohio and Texas.
    • 9: NUVA announced new executive leadership. Massimo Calafiore was appointed chief commercial officer, and Ryan Donahoe was appointed chief technology officer, both reporting directly to CEO J. Christopher Barry.
    • 9: NUVA’s Simplify Cervical Disc one-level FDA Investigational Device Exemption (IDE) study data was published in the International Journal of Spine Surgery. Peer-reviewed data results from the multi-center FDA IDE study reiterates that the Simplify Cervical Disc has a greater success rate than anterior cervical discectomy and fusion.
    • July 30: Pulse Platform for spine surgery receivedFDA 510(k) approval. Pulse is an integrated platform made to increase safety and efficiency in spine surgery, according to a July 30 news release. Clinical evidence shows the system has enabled surgeons to reduce operating room time by up to an hour, save nearly $5,000 per patient in hospital costs, and reduce time under anesthesia and hospital stays. It also helps surgeons scale back radiation exposure and improves surgical navigation.
  1. ATEC was founded in 2005 and operates as a holding company for its subsidiaries: Alphatec Spine Inc., EOS imaging, SafeOp Surgical Inc. and Alphatec International LLC. The company and its subsidiaries design, develop, manufacture, and market products for the surgical treatment of spine disorders. The company aims to revolutionize the approach to spine surgery and has approximately 1% share in the spine surgery device market. Recent highlights include:
    • 29: ATEC launches a new spinal fixation system, the InVictus OsseoScrew. The device is designed to be an alternative to the conventional use of cemented fenestrated screws in patients with compromised bone, and it helps restore spinal column integrity.
    • 22: ATEC received FDA approval for different devices and procedures: IdentiTi Porous Ti Interbody System, Transcend PEEK Interbody System, IdentiTi NanoTec Interbody System, Transcend NanoTec Interbody System.
    • August 10: ATEC received FDA approval for its PSX Interbody System.
    • April 9: ATEC received regulatory approval for its $116.9M acquisition of EOS Imaging.
  1. NUVA’s Q2 performance beat the Street’s expectations for both EPS and revenue. Sales increased 44.8% YY to $294.8 million vs. expectations for revenue of  $285.1 million. Earnings of $0.60 per share beat analyst forecasts for $0.43 per share. The sales increase was attributed to the recovery from the COVID-19 pandemic across all procedural segments and continued strong international growth. For FY21, the company expects net sales in the range of $1.19 billion to $1.21 billion.
  2. ATEC’s Q2 produced mixed results, beating revenue but missing EPS expectations. Revenue was up 110% to $62.1 million vs. expectations for revenue of $44.8 million. Earnings were reported as a loss of $0.39 per share vs. analyst forecasts for a loss of $0.02 per share. Full year 2021 guidance was for revenue of approximately $238 million YY. CEO Patrick Miles said, “We are accelerating revenue through sound execution of our growth priorities, but this is just the first inning; we intend to become the dominant force in the industry by significantly improving the clinical experience in spine.”
  3. Blueshift reported positively on both ATEC on Jan. 7, 2021, and NUVA on Oct. 6, 2010. NUVA was found to be a formidable, trailblazing company leading the way in the use of minimally invasive spine surgeries. Blueshift found that ATEC’s product development program and sales channel changes generated mixed opinions regarding its ability to sustain double-digit growth. However, sentiment regarding ATEC’s CEO Patrick Miles was all positive as sources expected him to lead the company to success.

 

How do NUVA’s and ATEC’s product portfolios compare? Is one company’s product line superior to the other?  Which company dominates the mind share of spine surgeons? What is the medical community saying about each company? What are each company’s strengths and weaknesses? How do NUVA and ATEC compare regarding quality of management, innovation, customer support, training, and reputation? How do NUVA and ATEC compare to the competition? Who in the spinal surgery device field is gaining/losing share? Are there any significant product/procedural breakthroughs on the horizon? Can NUVA and ATEC achieve their anticipated 2021 full year financial goals? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Spine surgeons and their teams, Spine surgery sales channel, Ambulatory surgical centers and hospitals, and Industry specialists. 

 

Companies: Alphatech Holding Inc. (ATEC), Globus Medical Inc. (GMED), NuVasive Inc. (NUVA), Medtronic plc (MDT), SeaSpine Holdings Corporation (SPNE), Stryker Corporation (SYK), Zimmer Biomet Holdings Inc. (ZBH)

 

Research Begins: October 18, 2021

 

To see other ideas Blueshift Research is currently working on, please click here.

 

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The Scorecard optimizes the ROI on corporate access by measuring: Concentration, Directionality, Breadth, Impact, Depth, and Duration

 

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