How RTI Surgical's integration of Paradigm Spine is going

Written by Laura Dyrda | May 13, 2019 | Print  |

In the first quarter of 2019, RTI Surgical reported net loss of $9 million related to the acquisition of Paradigm Spine, and President and CEO Camille Farhat said the company is making progress to integrate the coflex device in its spine portfolio.

"Many Paradigm team members joined RTI immediately following the close of the acquisition to drive our business forward," said Mr. Farhat during the first quarter conference call, as transcribed by Seeking Alpha. "Collaboration between the teams has been excellent. Integration continues to progress smoothly and in line with our expectations."

The company is now focused on growing coflex, an interlaminar stabilization device, with physician engagement and additional reimbursement. RTI Surgical expanded its U.S. Spine commercial team to two teams, one focused on novel therapies and the other on established therapies. The novel therapies group, which includes coflex, will need additional investments and expanded surgeon training. The company brought on former lead of DePuy Synthes, Johnson & Johnson's orthopedics and spine business, Tom Popeck.

Mr. Farhat estimates Paradigm will add around 35 percent more revenue to RTI's international franchise. Revenue growth for the full year is expected to increase 11 percent to 14 percent, driven by Paradigm Spine contributions.

"We anticipate that sometime in Q3 we will be done with the integration and then commercially the channel has been established, the structure is in place and where we have some open positions, we're filling them right now," said Mr. Farhat.

The company is also setting up a "reimbursement summit" to bring in experts to potentially adjust the approach to achieving coverage for devices. However, Mr. Farhat said, "We're not relying [on] and we don't need additional reimbursement coverage for the 2019 guidance numbers. We feel very good about where we are in the opportunity through the focus of the dedicated sales force channel and the broader RTI established therapies channel to [meet our goals]."

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