Amedica reported 51 percent silicon nitride ceramic products revenue increase for the second quarter of 2014 as the company moves to grow over the next six months.
"The first half of this year was marked by considerable progress against our strategy," said Amedica President and CEO Eric Olson. However, a few new developments could turn the negative trend around. Here are five key factors from the company's financial report:
• Silicon nitride ceramic product revenue reached $2.7 million in the second quarter, a 51 percent increase over the same period primarily due to market adoption of the second generation Valeo spinal interbody devices and the company's focus on its core silicon nitride technology.
• Total product revenue for the six months end increased 3 percent to $11.6 million due primarily to a 46 percent increase in silicon nitride ceramic product revenue, which reached $5.2 million for the first half of the year.
• Amedica reported overall net loss at $13.2 million for the second quarter, up significantly from $3.1 million reported over the same period last year. The higher net loss was primarily a result of non-cash stock compensation expense of approximately $7.4 million.
• The company repaid its GE credit facility, which will eliminate required principal payments in 2014 and enable the company to focus on new products in the spine and other medical device markets.
• Mr. Olson also reported strong improvement in manufacturing volumes and efficiencies, enabling the company to leverage its silicon nitride technology platform.
"In support of our roll-out of our second generation silicon nitride spine products, manufacturing volumes increased by approximately 500 percent during the first half of this year, as compared to prior year period," said Mr. Olson in a conference call about the financial report published by Seeking Alpha. "Product yields have also increased by approximately 18 percent in 2014, compared to the same half-year period in 2013."
At the same time, unit prices for the silicon nitride interbody devices declined around 26 percent and 45 percent — depending on the product — over the second quarter of last year. Additionally, the company hired new sales members during the second quarter and added 34 new surgeon customers.
Mr. Olson described new studies on silicon nitride bearings, showing positive results for a potential alternative to total hip arthroplasty designs in the future. "We believe that research and development expenses will continue to increase in 2014 as we implement additional clinical studies to support the utility of our silicon nitride products," said CFO Jay Moyes in the conference call.