SeaSpine’s Second-Quarter Revenue Climbs 3 Percent

SeaSpine Holdings Corporation pumped up the profits during the second quarter this year.

The company’s Q2 revenue climbed 3 percent to $34.2 million, with international proceeds soaring 20.5 percent to $3.8 million.

“We are pleased with our second quarter results, which reflect our ongoing commitment to develop innovative and cost effective solutions to treat spinal disorders and expand our distributor footprint,” said Keith Valentine, president and CEO. “We remain focused on our mission to drive improved procedural solutions that combine efficient spinal instrumentation systems with industry- leading orthobiologics to deliver clinical value to surgeons, hospitals, and patients.”

U.S. revenue for the second quarter (ended June 30) was $30.4 million, a 1.1 percent increase compared to the same period of 2016, due primarily to the improved performance of orthobiologics distributors during the current year period.
 
Orthobiologics revenue rose 4.8 percent to $17.6 million, driven primarily by an increase in U.S. sales. Spinal instrumentation revenue increased 1.1 percent to $16.6 million due to stocking orders from a recently added distributor in Latin America.
 
Gross margin for the second quarter of 2017 was 59.1 percent, compared to 58 percent for the same period in 2016. The increase in gross margin was mainly driven by lower manufacturing costs for orthobiologics products manufactured at the company’s Irvine, Calif., facility. This was partially offset by a $200,000 increase in non-cash amortization of technology intangible assets acquired in September 2016 from N.L.T. Spine Ltd. and by lower gross margins associated with international sales, which were slightly higher as a percentage of total revenue in Q2 compared to the second quarter of 2016.
 
Operating expenses for the second quarter of 2017 totaled $28.4 million, compared to $31.5 million for the same period of the prior year.  The $3.1 million decrease in operating expenses was driven by lower selling, general and administrative and intangible amortization expenses.
 
Net loss for the second quarter of 2017 was $8 million, compared to a net loss of $12 million for the second quarter of 2016.
 
Cash and cash equivalents at June 30 were $12.3 million and the company had $4 million of outstanding borrowings against its $30 million credit facility. SeaSpine realized $4.6 million in net proceeds in the second quarter of 2017 through the sale of approximately 477,000 shares of its common stock under its “at the market” equity offering program.

During Q2, Seaspine executed the full commercial launch of the Mariner Posterior Fixation System, a modular pedicle screw system that provides surgeons with multiple intra-operative options to facilitate posterior lumbar fixation, and also implemented a limited commercial launch of the Skipjack Expandable Interbody System, an expandable interbody system that provides in-situ expansion in either height or lordosis for an improved anatomical fit.
 
SeaSpine expects full-year 2017 revenue to be in the range of $130 million to $133 million, reflecting growth of 1 percent to 3 percent over full-year 2016 revenue.
 
SeaSpine designs, develops and commercializes surgical solutions for the treatment of spinal disorders. SeaSpine has a portfolio of orthobiologics and spinal instrumentation solutions to meet the varying combinations of products that neurosurgeons and orthopedic spine surgeons need to perform fusion procedures on the lumbar, thoracic and cervical spine. SeaSpine’s orthobiologics products consist of a range of advanced and traditional bone graft substitutes that are designed to improve bone fusion rates following a wide range of orthopedic surgeries, including spine, hip, and extremities procedures. SeaSpine’s spinal instrumentation portfolio consists of an extensive line of products to facilitate spinal fusion in minimally invasive surgery (MIS), complex spine, deformity and degenerative procedures. SeaSpine currently markets its products in the United States and in more than 30 countries worldwide.