08.04.14
$685 Million
KEY EXECUTIVES:
Alexis V. Lukianov, Chairman & CEO
Keith C. Valentine, President & Chief Operating Officer
Michael J. Lambert, Exec. VP & Chief Financial Officer
Patrick Miles, President, Global Products and Services
Tyler P. Lipschultz, Exec. VP, Global Operations
Russell Powers, Exec. VP, International
Takaaki Tanaka, Exec. VP, Asia-Pacific
Albert Pothier, Sr. VP, Integrated Operative Solutions
Paul Kosters, Sr. VP, EMEA
G. Bryan Cornwall, Ph.D., Sr. VP, Clinical Operations, IMI
NO. OF EMPLOYEES: 1,358
HEADQUARTERS: San Diego, Calif.
The words still echo in Bill Walton’s head, replaying like a broken record: “...And future waits for all who stay, With some success made yesterday...Tomorrow you must try once more, And even harder than before.” Or, “It’s not so important who starts the game but who finishes it.”
Such was the wisdom UCLA Bruins legendary coach John Wooden regularly imparted on his team in the early 1970s to teach players the dedication, discipline and focus they would need to forge successful careers. He had dozens of sayings—“Do not mistake activity for achievement,” “When you are through learning, you are through,” and “Happiness begins where selfishness ends,” to cite just a few—each designed to help prepare his student athletes for the post-academic world.
At 61, Walton can no longer remember all of Wooden’s aphorisms—too much time has passed since his last on-court lecture. Besides, his mind only rehashes those pertaining to faith and perseverance, a testament perhaps, to the principles he holds most dear. Walton has often employed Wooden’s counsel in both areas over the last 40 years to overcome the darkest periods of his life.
Indeed, it was Wooden’s words that helped Walton play through his fear of never again playing basketball (the “perfect game,” in his eyes), and overcoming a stutter to become an Emmy-winning color commentator for the National Basketball Association (NBA)—his speech impediment was reportedly so severe that Walton refrained from saying “hello” or “thank you” until he was 28 years old.
Wooden’s tutelage also inspired Walton to battle through 37 surgeries to fix the congenital foot and spinal defects that forced him to retire from the sport and nearly drove him to suicide in recent years.
“When my life became overwhelmed with chronic pain, Coach Wooden’s life lessons became even more important to me and ultimately helped me push through the toughest times I have ever had to face,” Walton noted in a 16-page brochure outlining his recovery from life-altering back pain, aptly titled “Back in the Game.”
Walton’s physical deterioration began in his senior year of college, during a game against the Washington State Cougars in which he was “low-bridged” and flipped over in mid-air by an opponent. The 6-foot, 11-inch center landed flat on his back, fracturing two vertebrae on the hard gymnasium floor—a devastating injury that sparked his long-term relationship with pain.
“Things were never the same again,” Walton recalled in his brochure.
Not by a longshot. In fact, life gradually grew worse: Walton’s faltering frame—once a source of national pride—began failing him regularly, causing him to miss more games (680) than he played (488) during his 14-year tenure with the NBA. He spent 17 years as an NBA commentator for ABC, ESPN, NBC, CBS, Fox, MSNBC, Turner Sports and KCAL before his bad back finally got the best of him.
“One day in early 2007 I was getting off another endless flight to San Diego and I literally couldn’t move anymore. I couldn’t walk. I couldn’t sit, stand, lie down, sleep, roll over, or get up or down, much less even think. My joyous life was quickly reduced to nothing,” the Naismith Memorial Basketball Hall of Famer wrote. “I tried everything to stop the unrelenting, debilitating, excruciating pain. Nothing worked...my life was so limited, so painful, so endlessly empty, I thought about ending it. I found myself thinking about bridges. I was looking for the highest ones, with the longest of falls and the hardest of bottoms.”
Being confined to the floor, of course, ruled out suicide by bridge. Faced with no other options, Walton reluctantly agreed to undergo a minimally invasive surgical procedure pioneered by spinal device manufacturer NuVasive Inc. The eXtreme Lateral Interbody Fusion technique, or XLIF for short, accesses the spine from the side rather than the front or back, mitigating injury or trauma to nerves, muscles and blood vessels, and facilitating faster healing (six weeks vs. six months for traditional approaches). XLIF procedures also take considerably less time to complete—as little as one hour compared with five for conventional methods—thereby reducing hospital costs.
XLIF incorporates two systems developed by NuVasive: the MaXcess and NVJJB/M5 systems, the former providing better visualization as well as increased angulation and instrument positioning compared to non-MIS approaches, while the latter monitors the patient’s nerve activity throughout the procedure to ensure safe implant placement.
The novelty of NuVasive’s XLIF technique as well as demand for risk-reducing procedures and devices has propelled the San Diego, Calif.-based firm to fourth runner-up in the $8.2 billion global spine market race. Executives, however, believe the crown is within reach based on their estimates of 55 percent growth in minimally invasive spinal surgeries by 2021—a number disputed by Research and Markets, which forecasts a 4 percent compound annual growth rate ($8.7 billion) by 2018.
Regardless, the opportunity to move up the pecking order is prompting NuVasive to chase its dream of becoming a $1 billion “spine powerhouse” with operating margins of 20 percent or better over the next several years.
That dream shouldn’t be too hard to achieve, considering the company is more than halfway to its goal. In 2013, total revenue grew 10.5 percent to $685.1 million and gross profit jumped 8.1 percent to $504.6 million, according to the company’s 2013 annual report. Net income more than doubled to $7.9 million, with per share income swelling from 7 cents in 2012 to 18 cents last year.
Solid gains in each of NuVasive’s three product lines likely drove the growth. Spine Surgery device sales swelled 12.5 percent to $530.3 million, while Biologics proceeds climbed 5 percent to $115.6 million and Monitoring Service revenues rose 0.72 percent to $39.1 million.
“Financial results in 2013 exceeded our expectations,” Chairman/CEO Alexis V. Lukianov told investors in the annual report. “Every one of our major product groups outperformed their targets. We generated a non-GAAP operating margin of almost 15 percent, which was ahead of our expectations in spite of numerous cost headwinds that surfaced over the course of the year. We also generated cash from operations of close to $100 million and non-GAAP earnings of $57.4 million, or $1.23 per share. [Our] 2013 results demonstrate that our market share-taking strategy is thriving. Importantly, we are cultivating the drivers that will support top and bottom-line growth for many years to come.”
One of those drivers is globalization. NuVasive steadily has grown its international presence, with foreign sales surging 44 percent last year to $64.8 million. The company beefed up its offshore footprint by appointing an exclusive Argentinian distributor and tasked its individual country leaders with developing new market opportunities in Germany, Italy, Spain and the United Kingdom. NuVasive relocated and expanded its U.K. office, adding offices, warehousing capabilities and space for staff training and surgeon events.
The company further infiltrated the Japanese market last year by opening an office in Tokyo (headed by Takaaki Tanaka, executive vice president of Asia-Pacific) and winning Shonin approval for both its XLIF technique and Precept system, part of the company’s line of minimally disruptive posterior fixation solutions. The Precept system consists of various polyaxial screws, reduction screws, offset connectors, rods, locking nuts and transverse connectors. The implant components can be rigidly locked into various configurations to suit patients’ individual pathologies and anatomical conditions.
NuVasive claims the system offers ease-of-use, advanced compression/distraction systems and instruments that help improve patient outcomes.
The launches likely will help NuVasive gain shares in Japan’s pedicle screw systems market, a sector that is expected to nearly double to $662 million in the next four years.
“With the approval and launch of Precept, we can introduce Japanese surgeons to additional innovation within our portfolio of procedurally integrated spine solutions,” Lukianov said in announcing the Japan’s first Precept posterior surgeries. “We have our sights set on changing spine surgery and improving patient outcomes in Japan, an exciting new market for us.”
NuVasive remained true to its other markets as well. In May, it released its Maximum Access surgery posterior lumbar interbody fusion (MAS PLIF) procedure internationally, enabling surgeons in Australia, Switzerland, Italy, Germany and the United Kingdom to access the procedure. The system reportedly avoids the need to retract back muscles as wide laterally as a traditional, or “open” PLIF, thereby allowing a smaller incision and reducing the amount of muscle disruption, which helps patients recover faster.
Last fall, the firm rewarded its home market (where revenues climbed 7.8 percent to $620.3 million) with the XLIF Decade plate and an anterior column realignment (ACR) procedure for anterior lumbar interbody fusion (ALIF).
The XLIF Decade plate system provides a comprehensive stabilization solution with four points of fixation for enhanced biomechanical rigidity and load sharing, according to NuVasive. It is designed for the XLIF approach and contoured specifically for the MaXcess IV retractor and CoRoent XL family of implants.
The ALIF ACR procedure corrects the sagittal plane imbalance that can result from advanced degeneration. The product gives surgeons a less invasive approach to achieve the same balance as with traditional techniques. Conventional ALIF implants offer only 8 degrees to 15 degrees of lordosis, but the implants developed for the ALIF ACR procedure offer 20 degree and 30 degree hyperlordotic footprints, potentially improving sagittal balance restoration capabilities.
Besides boosting its international presence last year, NuVasive also ramped up its vertical integration efforts, acquiring one of its major suppliers for $4.5 million. The deal for Dayton, Ohio-based spine implant manufacturer ANC LLC gives the firm a total of 35,000 square feet of manufacturing space and the capability of turning and milling most of its titanium parts. The additional proficiencies will help increase the company’s operational leverage by increasing speed to market and improving the deployment of its resources.
KEY EXECUTIVES:
Alexis V. Lukianov, Chairman & CEO
Keith C. Valentine, President & Chief Operating Officer
Michael J. Lambert, Exec. VP & Chief Financial Officer
Patrick Miles, President, Global Products and Services
Tyler P. Lipschultz, Exec. VP, Global Operations
Russell Powers, Exec. VP, International
Takaaki Tanaka, Exec. VP, Asia-Pacific
Albert Pothier, Sr. VP, Integrated Operative Solutions
Paul Kosters, Sr. VP, EMEA
G. Bryan Cornwall, Ph.D., Sr. VP, Clinical Operations, IMI
NO. OF EMPLOYEES: 1,358
HEADQUARTERS: San Diego, Calif.
The words still echo in Bill Walton’s head, replaying like a broken record: “...And future waits for all who stay, With some success made yesterday...Tomorrow you must try once more, And even harder than before.” Or, “It’s not so important who starts the game but who finishes it.”
Such was the wisdom UCLA Bruins legendary coach John Wooden regularly imparted on his team in the early 1970s to teach players the dedication, discipline and focus they would need to forge successful careers. He had dozens of sayings—“Do not mistake activity for achievement,” “When you are through learning, you are through,” and “Happiness begins where selfishness ends,” to cite just a few—each designed to help prepare his student athletes for the post-academic world.
At 61, Walton can no longer remember all of Wooden’s aphorisms—too much time has passed since his last on-court lecture. Besides, his mind only rehashes those pertaining to faith and perseverance, a testament perhaps, to the principles he holds most dear. Walton has often employed Wooden’s counsel in both areas over the last 40 years to overcome the darkest periods of his life.
Indeed, it was Wooden’s words that helped Walton play through his fear of never again playing basketball (the “perfect game,” in his eyes), and overcoming a stutter to become an Emmy-winning color commentator for the National Basketball Association (NBA)—his speech impediment was reportedly so severe that Walton refrained from saying “hello” or “thank you” until he was 28 years old.
Wooden’s tutelage also inspired Walton to battle through 37 surgeries to fix the congenital foot and spinal defects that forced him to retire from the sport and nearly drove him to suicide in recent years.
“When my life became overwhelmed with chronic pain, Coach Wooden’s life lessons became even more important to me and ultimately helped me push through the toughest times I have ever had to face,” Walton noted in a 16-page brochure outlining his recovery from life-altering back pain, aptly titled “Back in the Game.”
Walton’s physical deterioration began in his senior year of college, during a game against the Washington State Cougars in which he was “low-bridged” and flipped over in mid-air by an opponent. The 6-foot, 11-inch center landed flat on his back, fracturing two vertebrae on the hard gymnasium floor—a devastating injury that sparked his long-term relationship with pain.
“Things were never the same again,” Walton recalled in his brochure.
Not by a longshot. In fact, life gradually grew worse: Walton’s faltering frame—once a source of national pride—began failing him regularly, causing him to miss more games (680) than he played (488) during his 14-year tenure with the NBA. He spent 17 years as an NBA commentator for ABC, ESPN, NBC, CBS, Fox, MSNBC, Turner Sports and KCAL before his bad back finally got the best of him.
“One day in early 2007 I was getting off another endless flight to San Diego and I literally couldn’t move anymore. I couldn’t walk. I couldn’t sit, stand, lie down, sleep, roll over, or get up or down, much less even think. My joyous life was quickly reduced to nothing,” the Naismith Memorial Basketball Hall of Famer wrote. “I tried everything to stop the unrelenting, debilitating, excruciating pain. Nothing worked...my life was so limited, so painful, so endlessly empty, I thought about ending it. I found myself thinking about bridges. I was looking for the highest ones, with the longest of falls and the hardest of bottoms.”
Being confined to the floor, of course, ruled out suicide by bridge. Faced with no other options, Walton reluctantly agreed to undergo a minimally invasive surgical procedure pioneered by spinal device manufacturer NuVasive Inc. The eXtreme Lateral Interbody Fusion technique, or XLIF for short, accesses the spine from the side rather than the front or back, mitigating injury or trauma to nerves, muscles and blood vessels, and facilitating faster healing (six weeks vs. six months for traditional approaches). XLIF procedures also take considerably less time to complete—as little as one hour compared with five for conventional methods—thereby reducing hospital costs.
XLIF incorporates two systems developed by NuVasive: the MaXcess and NVJJB/M5 systems, the former providing better visualization as well as increased angulation and instrument positioning compared to non-MIS approaches, while the latter monitors the patient’s nerve activity throughout the procedure to ensure safe implant placement.
The novelty of NuVasive’s XLIF technique as well as demand for risk-reducing procedures and devices has propelled the San Diego, Calif.-based firm to fourth runner-up in the $8.2 billion global spine market race. Executives, however, believe the crown is within reach based on their estimates of 55 percent growth in minimally invasive spinal surgeries by 2021—a number disputed by Research and Markets, which forecasts a 4 percent compound annual growth rate ($8.7 billion) by 2018.
Regardless, the opportunity to move up the pecking order is prompting NuVasive to chase its dream of becoming a $1 billion “spine powerhouse” with operating margins of 20 percent or better over the next several years.
That dream shouldn’t be too hard to achieve, considering the company is more than halfway to its goal. In 2013, total revenue grew 10.5 percent to $685.1 million and gross profit jumped 8.1 percent to $504.6 million, according to the company’s 2013 annual report. Net income more than doubled to $7.9 million, with per share income swelling from 7 cents in 2012 to 18 cents last year.
Solid gains in each of NuVasive’s three product lines likely drove the growth. Spine Surgery device sales swelled 12.5 percent to $530.3 million, while Biologics proceeds climbed 5 percent to $115.6 million and Monitoring Service revenues rose 0.72 percent to $39.1 million.
“Financial results in 2013 exceeded our expectations,” Chairman/CEO Alexis V. Lukianov told investors in the annual report. “Every one of our major product groups outperformed their targets. We generated a non-GAAP operating margin of almost 15 percent, which was ahead of our expectations in spite of numerous cost headwinds that surfaced over the course of the year. We also generated cash from operations of close to $100 million and non-GAAP earnings of $57.4 million, or $1.23 per share. [Our] 2013 results demonstrate that our market share-taking strategy is thriving. Importantly, we are cultivating the drivers that will support top and bottom-line growth for many years to come.”
One of those drivers is globalization. NuVasive steadily has grown its international presence, with foreign sales surging 44 percent last year to $64.8 million. The company beefed up its offshore footprint by appointing an exclusive Argentinian distributor and tasked its individual country leaders with developing new market opportunities in Germany, Italy, Spain and the United Kingdom. NuVasive relocated and expanded its U.K. office, adding offices, warehousing capabilities and space for staff training and surgeon events.
The company further infiltrated the Japanese market last year by opening an office in Tokyo (headed by Takaaki Tanaka, executive vice president of Asia-Pacific) and winning Shonin approval for both its XLIF technique and Precept system, part of the company’s line of minimally disruptive posterior fixation solutions. The Precept system consists of various polyaxial screws, reduction screws, offset connectors, rods, locking nuts and transverse connectors. The implant components can be rigidly locked into various configurations to suit patients’ individual pathologies and anatomical conditions.
NuVasive claims the system offers ease-of-use, advanced compression/distraction systems and instruments that help improve patient outcomes.
The launches likely will help NuVasive gain shares in Japan’s pedicle screw systems market, a sector that is expected to nearly double to $662 million in the next four years.
“With the approval and launch of Precept, we can introduce Japanese surgeons to additional innovation within our portfolio of procedurally integrated spine solutions,” Lukianov said in announcing the Japan’s first Precept posterior surgeries. “We have our sights set on changing spine surgery and improving patient outcomes in Japan, an exciting new market for us.”
NuVasive remained true to its other markets as well. In May, it released its Maximum Access surgery posterior lumbar interbody fusion (MAS PLIF) procedure internationally, enabling surgeons in Australia, Switzerland, Italy, Germany and the United Kingdom to access the procedure. The system reportedly avoids the need to retract back muscles as wide laterally as a traditional, or “open” PLIF, thereby allowing a smaller incision and reducing the amount of muscle disruption, which helps patients recover faster.
Last fall, the firm rewarded its home market (where revenues climbed 7.8 percent to $620.3 million) with the XLIF Decade plate and an anterior column realignment (ACR) procedure for anterior lumbar interbody fusion (ALIF).
The XLIF Decade plate system provides a comprehensive stabilization solution with four points of fixation for enhanced biomechanical rigidity and load sharing, according to NuVasive. It is designed for the XLIF approach and contoured specifically for the MaXcess IV retractor and CoRoent XL family of implants.
The ALIF ACR procedure corrects the sagittal plane imbalance that can result from advanced degeneration. The product gives surgeons a less invasive approach to achieve the same balance as with traditional techniques. Conventional ALIF implants offer only 8 degrees to 15 degrees of lordosis, but the implants developed for the ALIF ACR procedure offer 20 degree and 30 degree hyperlordotic footprints, potentially improving sagittal balance restoration capabilities.
Besides boosting its international presence last year, NuVasive also ramped up its vertical integration efforts, acquiring one of its major suppliers for $4.5 million. The deal for Dayton, Ohio-based spine implant manufacturer ANC LLC gives the firm a total of 35,000 square feet of manufacturing space and the capability of turning and milling most of its titanium parts. The additional proficiencies will help increase the company’s operational leverage by increasing speed to market and improving the deployment of its resources.