The global spinal implants and surgical devices market ‘is expected to reach USD 17.27 Billion by 2021, growing at a CAGR of 5.3% from 2016 to 2021’, according to a press release from MarketsandMarkets (http://dtn.fm/uHV0W). Increasing longevity and the resulting larger elderly population means more spinal disorders, such as herniated discs, degenerative disc disease, spondylolisthesis, prolapsed intervertebral discs, and spinal stenosis. In addition, the development of minimally invasive surgical (MIS) procedures is leading to wider adoption of technologically advanced spinal implants.
MIS is NuVasive’s forte. The company is best known for developing the eXtreme Lateral Interbody Fusion® (XLIF) procedure, a minimally disruptive procedure that allows spine surgeons to have direct access to the intervertebral disc space (the “joint” of the spine) from the side of the body, as opposed to the front or back. The XLIF procedure is just one of the company’s many innovative procedures, which have redefined spine surgery and opened doors to treat pathologies not previously treated with minimal disruption.
NuVasive has also developed a revolutionary nerve avoidance monitoring system (NVJJB™ /M5®) designed to help ensure nerve and spinal cord safety – this unique and advanced technology may help reduce the incidence of injury to neural elements during spinal procedures by providing real-time feedback and notifying surgeons immediately of any neurological insult. Additionally, NuVasive offers a portfolio of biologics products to help in the bone healing process.
A recent report from Aegis Capital (http://dtn.fm/H1sQC) suggests that NuVasive’s rapid growth is far from over. The company has been steadily paring manufacturing inefficiencies. As a consequence, gross profit has hovered around 75 percent. Other operating margin improvements are expected from economies of scope as the marketing offering expands and economies of scale form an increasingly larger international footprint. Aegis sees “900bp of operating improvements to come, which will continue to drive value.”
In a fast growing industry (2–3% p.a.), NuVasive, focused on developing minimally disruptive surgical products and procedures for the spine, is a fast growing company (2-3x faster than the overall market). The drivers of growth are its ‘expanding platform of offerings, adapting a holistic approach with regards to its sales effort, and increased Integrated Global Alignment (iGA) integration which allows better planning for deformity and saves cost.’
Alignment is one of three important factors to be considered when spine surgery is being contemplated. In cases of spondylolisthesis, for example, the first concern is usually decompression of the nerves to ease any pain or discomfort the patient may be experiencing. In many instances, this means removing the disc or other offending piece from the spine. The resulting space is, typically, filled by bone graft or a synthetic substance in a procedure known as lumbar interbody fusion (LIF). At this point, alignment procedures to straighten the spine may be implemented.
NuVasive, which has a presence in over 30 countries and employs more than 1,600 people globally, had revenues of $811 million in 2015. A 17 percent increase to $953 million is expected this year. Aegis has initiated coverage with a ‘Buy’ rating and a price target of $72.00. The stock, trading on the NASDAQ under the symbol NUVA, is currently around $67.00.
For more information, visit www.nuvasive.com
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