08.15.17
$962 Million
KEY EXECUTIVES:
Gregory T. Lucier, Chairman & CEO
Quentin S. Blackford, Exec. VP & CFO
Carol Cox, Exec. VP, External Affairs & Corporate Marketing
Jason Hannon, President and COO
Skip Kill, Exec. VP, International
Matt Link, President, U.S. Commercial
Ed Roschak, CEO, NuVasive Specialized Orthopedics
NO. OF EMPLOYEES: 2,200
GLOBAL HEADQUARTERS: San Diego, Calif.
Competing in the spine market is no easy task. Some of the world’s largest medical device companies—Medtronic plc, Johnson & Johnson (DePuy Synthes), Stryker Corp., and Zimmer Biomet to name a few—comprise a large chunk of the spine market. Companies looking to claim a slice of the spine pie therefore must have a new twist on traditional spinal technologies to stand a chance of competing with these long-established giants.
San Diego, Calif.-based NuVasive Inc.’s quirk for the spine market lies right in the firm’s name—a portfolio dedicated to minimally invasive (or in the company’s words, minimally disruptive) spine surgery technologies. The full-line spine company has established a niche in procedurally integrated spine solutions, capitalizing on the demand for surgical alternatives with less tissue disruption and patient trauma and an aging “baby boomer” population seeking a speedy return to daily living following surgery.
Because NuVasive’s strategy involves transforming traditional spinal offerings into less invasive versions, the firm can sometimes fall prey to patent litigation of technologies appearing a little too similar to existing products. In 2008, for example, Medtronic’s Spinal division filed a patent infringement lawsuit against NuVasive, claiming the company’s XLIF (lateral lumbar interbody fusion) surgical technique encroached on several patents Medtronic held. NuVasive responded in kind with counterclaims that Medtronic had infringed on its patents. The initial trial on the first phase of the case concluded in 2011, resulting in an unfavorable verdict against NuVasive regarding several Medtronic patents, and one favorable verdict. Monetary damages of $101.2 million were awarded to Medtronic (which both companies appealed), and the funds were put in escrow for a future verdict.
The second phase of the case, which involved a Medtronic cervical plate patent, was resolved in 2013. NuVasive received a license to practice various patent families collectively representing a majority of Medtronic’s patent rights to cervical plate technology. NuVasive made a one-time $7.5 million payment to Medtronic, which was also awarded a royalty on NuVasive’s Helix and Gradient cervical plate products. The final phase alleged NuVasive’s spinal implants, Osteocel Plus bone graft, and XLIF procedure using MaXcess IV retractor infringed several Medtronic patents.
In June 2016, the patent litigation was finally resolved. NuVasive ended up paying Medtronic $45 million, and all parties released each other from ongoing patent litigation. Each company was granted irrevocable, worldwide, non-exclusive, paid-up, royalty-free licenses on certain respective patents of their product lines. In addition, neither company will assert claims against the other related to spinal implants and related instruments, biologics and neuromonitoring for seven years.
“We are very pleased to have negotiated a mutually agreeable settlement that removes the ongoing burden of this litigation and provides for a framework for resolution of potential patent disputes in the future,” Chairman and CEO Gregory T. Lucier said in a news release announcing the settlement.
Lucier was installed as NuVasive’s CEO in mid-2015 after Alex Lukianov’s resignation due to lack of compliance with expense reimbursement and other personnel policies. At the time, there were some stirrings of a NuVasive sale because Lucier seemed more amiable than Lukianov to the strategy, according to comments made to Reuters by Leerink Swann analyst Richard Newetter.
NuVasive did not go up for sale in fiscal year 2016 (ended Dec. 31), but the company was certainly made a much more attractive target due to double digit sales growth. NuVasive garnered $962 million of revenue in 2016, up a compelling 19 percent from the year prior. The company has certainly found its niche in the spine market—NuVasive’s procedure volume expanded significantly in 2016 due to the continued adoption of minimally invasive procedures for spine, as well as elevated international market acceptance for these practices.
The company’s Spinal Hardware division mirrored the company’s total FY16 gains, magnifying 20 percent to $674 million in sales. This generous hike was supported by NuVasive’s $380 million purchase of Ellipse Technologies—which develops procedural solutions for skeletal deformity—early in the year. By grabbing Ellipse, NuVasive added a platform of magnetically expandable growing rod implant systems able to be non-invasively lengthened with an external remote control via MAGnetic External Control (MAGEC) technology. MAGEC technology lets physicians customize patient therapy non-invasively, lowering the necessity for repeat surgical procedures and improving outcomes. The treatment is the only non-invasive growth modulation system for early onset scoliosis patients. NuVasive also obtained Precice, a technology for limb lengthening, in buying Ellipse.
“…the acquisition of Ellipse will aggressively insert NuVasive into early onset and idiopathic scoliosis, an important and attractive part of the spinal deformity market for NuVasive where we have tremendous opportunities for accelerated growth,” Lucier said at the time of the announcement. “Additionally, this investment expands NuVasive’s footprint into new niche markets with highly differentiated technology that will be strategically applied in other spine and orthopedic applications, including degenerative spine disease, trauma, and knee osteoarthritis.”
Following the acquisition’s close in late February, former Ellipse CEO Ed Roschak was appointed CEO of NuVasive Specialized Orthopedics (NSO). The MAGEC system was granted U.S. Food and Drug Administration (FDA) clearance to be surgically implanted using NuVasive’s Reline posterior fixation system for severe spinal deformity patients in September, and FDA-cleared for 1.5T magnetic resonance imaging in October.
NuVasive’s iGA (Integrated Global Alignment) platform—a procedurally-integrated digital array of specialized products to help surgeons achieve more precise spinal column alignment—also continued to evolve in 2016. The company brought iGA to the U.K. market in April 2016’s BritSpine conference and provided educational workshops and exhibitions to those unfamiliar with the technology. Further, NuVasive showcased the iGA platform for cervical at 2016’s North American Spine Society (NASS) annual meeting. The expanded platform made the company a pioneer in spinal alignment for all spine procedures, and supported the launch of Bendini OCT, a computer-assisted rod bending system with the ability to bend spinal rods for occipito-cervico-thoracic cases. The Base Interfixated Titanium system for iGA was also introduced, which offers versatile fixation options with a distinctive locking mechanism and anatomic implant design to help rebuild spinal foundation.
Adding to the company’s implant distribution system, in March 2016 NuVasive acquired Mega Surgical, its exclusive Brazil distributor. Mega Surgical had partnered with NuVasive since 2008.
Though not quite as flashy as Spinal Hardware, the Surgical Support business—which offers intraoperative monitoring (IOM) services, disposables, and biologics still demonstrated double digit growth in 2016, swelling 14 percent to $288 million in revenue. Like the Spinal Hardware segment, this expansion was mainly fueled by key acquisitions NuVasive made during the year.
The first of these occurred in July 2016, when the company purchased BNN Holdings Corp. for $98 million. BNN Holdings owns Biotronic NeuroNetwork, an intraoperative neurophysical monitoring services firm. Biotronic NeuroNetwork caters to surgeons and healthcare facilities across the United States, and was combined with NuVasive’s existing IOM business to form the new division NuVasive Clinical Services (NCS). The firm also acquired the LessRay software technology suite from SafeRay Spine in September 2016, and showcased the newly obtained technology at NASS 2016. LessRay integrates into surgeon workflow and utilizes an algorithm to drive image registration and help surgeons and hospital staff manage radiation exposure using low-dose image quality enhancement. This technology is expected to become an integral component of NuVasive’s IOM service and Maximum Access Surgery (MAS) platform.
Enhancing the biologics portfolio, the company launched its AttraX Putty autograft extender for posterolateral spine surgery in May 2016. AttraX Putty’s biotextured surface helps to facilitate regeneration of the bone at the implanted site, outperforming competitive synthetic bone graft options in terms of bone formation and mechanically stronger fusions in clinical studies.
NuVasive also promoted Jason M. Hannon to president and chief operating officer in September 2016, succeeding Patrick S. Mikes, who was appointed vice chairman of the company. In over 11 years at NuVasive, Hannon lead key areas of the firm’s business, including strategy, corporate development, legal, and regulatory. Since July 2015, Hannon has served as executive vice president, International.
“Jason has extensive knowledge about our business operations and the markets we serve, as well as strong relationships with our customers,” Lucier said in a company release detailing Hannon’s promotion. “Jason has demonstrated operational acumen as the leader of our international business where he spearheaded a successful revitalization in our global markets with a return to double-digit revenue growth. I am proud of our efforts to develop a deep bench of executive talent, along with a clear succession plan aligned to our long-term strategic goals.”
KEY EXECUTIVES:
Gregory T. Lucier, Chairman & CEO
Quentin S. Blackford, Exec. VP & CFO
Carol Cox, Exec. VP, External Affairs & Corporate Marketing
Jason Hannon, President and COO
Skip Kill, Exec. VP, International
Matt Link, President, U.S. Commercial
Ed Roschak, CEO, NuVasive Specialized Orthopedics
NO. OF EMPLOYEES: 2,200
GLOBAL HEADQUARTERS: San Diego, Calif.
Competing in the spine market is no easy task. Some of the world’s largest medical device companies—Medtronic plc, Johnson & Johnson (DePuy Synthes), Stryker Corp., and Zimmer Biomet to name a few—comprise a large chunk of the spine market. Companies looking to claim a slice of the spine pie therefore must have a new twist on traditional spinal technologies to stand a chance of competing with these long-established giants.
San Diego, Calif.-based NuVasive Inc.’s quirk for the spine market lies right in the firm’s name—a portfolio dedicated to minimally invasive (or in the company’s words, minimally disruptive) spine surgery technologies. The full-line spine company has established a niche in procedurally integrated spine solutions, capitalizing on the demand for surgical alternatives with less tissue disruption and patient trauma and an aging “baby boomer” population seeking a speedy return to daily living following surgery.
Because NuVasive’s strategy involves transforming traditional spinal offerings into less invasive versions, the firm can sometimes fall prey to patent litigation of technologies appearing a little too similar to existing products. In 2008, for example, Medtronic’s Spinal division filed a patent infringement lawsuit against NuVasive, claiming the company’s XLIF (lateral lumbar interbody fusion) surgical technique encroached on several patents Medtronic held. NuVasive responded in kind with counterclaims that Medtronic had infringed on its patents. The initial trial on the first phase of the case concluded in 2011, resulting in an unfavorable verdict against NuVasive regarding several Medtronic patents, and one favorable verdict. Monetary damages of $101.2 million were awarded to Medtronic (which both companies appealed), and the funds were put in escrow for a future verdict.
The second phase of the case, which involved a Medtronic cervical plate patent, was resolved in 2013. NuVasive received a license to practice various patent families collectively representing a majority of Medtronic’s patent rights to cervical plate technology. NuVasive made a one-time $7.5 million payment to Medtronic, which was also awarded a royalty on NuVasive’s Helix and Gradient cervical plate products. The final phase alleged NuVasive’s spinal implants, Osteocel Plus bone graft, and XLIF procedure using MaXcess IV retractor infringed several Medtronic patents.
In June 2016, the patent litigation was finally resolved. NuVasive ended up paying Medtronic $45 million, and all parties released each other from ongoing patent litigation. Each company was granted irrevocable, worldwide, non-exclusive, paid-up, royalty-free licenses on certain respective patents of their product lines. In addition, neither company will assert claims against the other related to spinal implants and related instruments, biologics and neuromonitoring for seven years.
“We are very pleased to have negotiated a mutually agreeable settlement that removes the ongoing burden of this litigation and provides for a framework for resolution of potential patent disputes in the future,” Chairman and CEO Gregory T. Lucier said in a news release announcing the settlement.
Lucier was installed as NuVasive’s CEO in mid-2015 after Alex Lukianov’s resignation due to lack of compliance with expense reimbursement and other personnel policies. At the time, there were some stirrings of a NuVasive sale because Lucier seemed more amiable than Lukianov to the strategy, according to comments made to Reuters by Leerink Swann analyst Richard Newetter.
NuVasive did not go up for sale in fiscal year 2016 (ended Dec. 31), but the company was certainly made a much more attractive target due to double digit sales growth. NuVasive garnered $962 million of revenue in 2016, up a compelling 19 percent from the year prior. The company has certainly found its niche in the spine market—NuVasive’s procedure volume expanded significantly in 2016 due to the continued adoption of minimally invasive procedures for spine, as well as elevated international market acceptance for these practices.
The company’s Spinal Hardware division mirrored the company’s total FY16 gains, magnifying 20 percent to $674 million in sales. This generous hike was supported by NuVasive’s $380 million purchase of Ellipse Technologies—which develops procedural solutions for skeletal deformity—early in the year. By grabbing Ellipse, NuVasive added a platform of magnetically expandable growing rod implant systems able to be non-invasively lengthened with an external remote control via MAGnetic External Control (MAGEC) technology. MAGEC technology lets physicians customize patient therapy non-invasively, lowering the necessity for repeat surgical procedures and improving outcomes. The treatment is the only non-invasive growth modulation system for early onset scoliosis patients. NuVasive also obtained Precice, a technology for limb lengthening, in buying Ellipse.
“…the acquisition of Ellipse will aggressively insert NuVasive into early onset and idiopathic scoliosis, an important and attractive part of the spinal deformity market for NuVasive where we have tremendous opportunities for accelerated growth,” Lucier said at the time of the announcement. “Additionally, this investment expands NuVasive’s footprint into new niche markets with highly differentiated technology that will be strategically applied in other spine and orthopedic applications, including degenerative spine disease, trauma, and knee osteoarthritis.”
Following the acquisition’s close in late February, former Ellipse CEO Ed Roschak was appointed CEO of NuVasive Specialized Orthopedics (NSO). The MAGEC system was granted U.S. Food and Drug Administration (FDA) clearance to be surgically implanted using NuVasive’s Reline posterior fixation system for severe spinal deformity patients in September, and FDA-cleared for 1.5T magnetic resonance imaging in October.
NuVasive’s iGA (Integrated Global Alignment) platform—a procedurally-integrated digital array of specialized products to help surgeons achieve more precise spinal column alignment—also continued to evolve in 2016. The company brought iGA to the U.K. market in April 2016’s BritSpine conference and provided educational workshops and exhibitions to those unfamiliar with the technology. Further, NuVasive showcased the iGA platform for cervical at 2016’s North American Spine Society (NASS) annual meeting. The expanded platform made the company a pioneer in spinal alignment for all spine procedures, and supported the launch of Bendini OCT, a computer-assisted rod bending system with the ability to bend spinal rods for occipito-cervico-thoracic cases. The Base Interfixated Titanium system for iGA was also introduced, which offers versatile fixation options with a distinctive locking mechanism and anatomic implant design to help rebuild spinal foundation.
Adding to the company’s implant distribution system, in March 2016 NuVasive acquired Mega Surgical, its exclusive Brazil distributor. Mega Surgical had partnered with NuVasive since 2008.
Though not quite as flashy as Spinal Hardware, the Surgical Support business—which offers intraoperative monitoring (IOM) services, disposables, and biologics still demonstrated double digit growth in 2016, swelling 14 percent to $288 million in revenue. Like the Spinal Hardware segment, this expansion was mainly fueled by key acquisitions NuVasive made during the year.
The first of these occurred in July 2016, when the company purchased BNN Holdings Corp. for $98 million. BNN Holdings owns Biotronic NeuroNetwork, an intraoperative neurophysical monitoring services firm. Biotronic NeuroNetwork caters to surgeons and healthcare facilities across the United States, and was combined with NuVasive’s existing IOM business to form the new division NuVasive Clinical Services (NCS). The firm also acquired the LessRay software technology suite from SafeRay Spine in September 2016, and showcased the newly obtained technology at NASS 2016. LessRay integrates into surgeon workflow and utilizes an algorithm to drive image registration and help surgeons and hospital staff manage radiation exposure using low-dose image quality enhancement. This technology is expected to become an integral component of NuVasive’s IOM service and Maximum Access Surgery (MAS) platform.
Enhancing the biologics portfolio, the company launched its AttraX Putty autograft extender for posterolateral spine surgery in May 2016. AttraX Putty’s biotextured surface helps to facilitate regeneration of the bone at the implanted site, outperforming competitive synthetic bone graft options in terms of bone formation and mechanically stronger fusions in clinical studies.
NuVasive also promoted Jason M. Hannon to president and chief operating officer in September 2016, succeeding Patrick S. Mikes, who was appointed vice chairman of the company. In over 11 years at NuVasive, Hannon lead key areas of the firm’s business, including strategy, corporate development, legal, and regulatory. Since July 2015, Hannon has served as executive vice president, International.
“Jason has extensive knowledge about our business operations and the markets we serve, as well as strong relationships with our customers,” Lucier said in a company release detailing Hannon’s promotion. “Jason has demonstrated operational acumen as the leader of our international business where he spearheaded a successful revitalization in our global markets with a return to double-digit revenue growth. I am proud of our efforts to develop a deep bench of executive talent, along with a clear succession plan aligned to our long-term strategic goals.”