SpineGuard Sales Surged 43 Percent in 2015

SpineGuard’s financial health improved dramatically last year. The French developer of spinal surgery technology posted increases in both sales and gross margin, and reduced its net loss for 2015.

Sales spiked 43 percent to 6.3 million euros, while gross margin surged 42 percent to 5.4 million euros. A total of 7,449 PediGuard units sold last year, a 22.9 percent increase compared with the 6,063 units sold in the previous year. The gross margin (as a percentage of revenue) held steady at 84.5 percent (compared with 85.2 percent in 2014). The 0.7 bps decrease year-on-year was mainly caused by a different country-product mix compared with 2014.  

“Whether you look at sales, financing or strategic achievements, 2015 was an excellent year for SpineGuard,” SpineGuard co-found Pierre Jérôme said. “The strong growth in the U.S., Europe and Japan, as well as the regulatory approval in China, continue to validate the clinical value of the PediGuard range. Our Dynamic Surgical Guidance technology is now integrated into the spinal implant itself thanks to the collaborations with our partners, Neuro France and Zavation. The CE-marking and successful first surgeries with DSG screws are already opening opportunities with great prospects for us.”

The company improved its net loss by 661,000 euros but boosted operating expenses 13 percent to 9.3 million euros, mainly driven by sales and marketing investments. At Dec. 31, 2015, cash and cash equivalents were 3.2 million euros compared with 2.5 million euros in 2014.

SpineGuard secured an innovation loan with Bpifrance of 1.5 million euros and also has the option to exercise the three remaining tranches with IPF Partners for a total of 3.2 million euros for the bonds until the end of 2016. The company has an available equity line (Paceo) of 265,000 shares, representing an estimated 1.3 million euros net of expenses at its March 22, 2016, stock price.

“By securing 7.7 million euros financing with Bpifrance and IPF Partners, the company has reinforced its financial resources in a flexible way, providing the necessary means to properly deploy our new products worldwide,” Chief Financial Officer Manuel Lanfossi said. “The solid growth achieved in 2015 combined with the control of the operating expenses and the working capital make us confident for the future.”

The company continued to expand its distribution network throughout the United States last year and enhanced PediGuard’s adoption in teaching institutions. A total of 35 centers (compared with 25 at the end of 2014) are now using DSG-enabled devices in their curriculum.

In the rest of the world, the Company continued to focus on training and marketing activities to support its distributors across geographies:

• In Europe, SpineGuard delivered significant revenue growth in France (up 20 percent), the United Kingdom (up 53 percent) and Germany (up 23 percent). In Russia, numerous surgeons were trained in coordination with the distributor. However, the market there remains challenging due macro-economic factors and the weakening of the ruble vs. the euro.
• In Asia, the revenue growth in Japan remained strong with a 60 percent revenue jump. Singapore sales grew 47 percent, and in China, following regulatory clearance by the Chinese Food & Drug Administration (CFDA) for the Classic PediGuard, the company is selecting local distributors.
• In Latin America, sales in Chile and Peru grew 15 percent and 121 percent respectively, though 2015 was a consolidation year in Mexico (revenue was down 6 percent). Brazil sales were down as well, due to macro-economic reasons and distributor-specific causes.
• Middle-East sales growth of 12 percent was underwritten by winning a tender in Saudi Arabia, which resulted in the sale of more than 400 units.

In a major milestone, PediGuard Threaded (with DSG technology) received CE mark and the first surgeries took place during the fourth quarter of 2015. The company also deployed new marketing tools for surgeons and the sales teams.

Last year was clinically productive as well. Eight surgeons presented their experience with PediGuard in international scientific conventions and six new clinical studies were completed:

• Prospective study regarding osteoporotic patients including a U.S. and a Brazilian center.
• Retrospective study on scoliosis (France).
• Prospective study on scoliosis (Chile).
• In-vitro study about the placement and use of PediGuard in cervical surgery.
• In-vitro study about the placement and use of PediGuard in minimally invasive surgeries (MIS).
• Meta-analysis about screw misplacements covering more than 100 publications.