Why Alphatec Spine is focused on titanium, not 3D printing going forward

Spinal Tech

Alphatec reported a 15 percent increase in net revenue for the first quarter of 2019, hitting $24.6 million, and 22 percent of the revenue was from new products.


During the second quarter, the company launched two IdentiTi products, which are titanium products for anterior cervical discectomy and fusion. Surgeons can also use the device from a posterior approach.

"What makes the launches exciting is, really titanium has become rogue in spine surgery," said Pat Miles, executive chairman, president and CEO of Alpahtec during the first quarter conference call, as transcribed by Seeking Alpha. "There's a density in the porous titanium that both enhances imaging and is similarly stiff to host bone. And so we believe that from an imaging perspective and from a performance perspective, it's a very predictable product. Additionally, it's made via subtractive manufacturing."

While several companies have released 3D printed spine and orthopedic devices, Mr. Miles said that is not a focus for Alphatec. "I think surgeons care less about how something is made and [it] doesn't reflect the requirements of a predictable patient outcome, and so our focus really has been on what the future is set to ultimately drive predictability, and I think we got it in both the IdentiTi ACDF products as well as the IdentiTi PLIF product."

Mr. Miles also touched on Alphatec's DBM fiber in the biologics line, which has interconnected fibers to promote the maximum number of growth factors. In April, the company promoted Dave Sponsel to executive vice president of sales. Mr. Sponsel has experience with Stryker Spine and Medacta prior to joining Aphatec and spent time as the area vice president of the west before his promotion.

During the first quarter, Mr. Miles reported 100 percent revenue growth from the top 20 surgeons, indicating the company works with surgeons doing more complex procedures. He also reported 38 percent growth in the number of surgeons hosted at its home office for the first quarter and 13 percent increase in revenue per case.

Alphatec also reported $2.7 million of litigation expense for the quarter. "This is a very aggressive environment," said Mr. Miles. "The expense is going toward defending ourselves, and so my expectation is that we're creating ripples and that's why people love to sue us. And so I expect [litigation expenses] to go down and we've had a stay, and so expectations are that they'll go down next quarter. But I don't think you ever made great progress and become a disruptive company without a little bit of fighting going on."

Mr. Miles also made it clear during the call that Alphatec will move forward as a spine-only company. "If there presents an opportunity to do something else, outside of spine with some partner at some point in the future, we would evaluate that," he said. "But for the next foreseeable future, we will concentrate on the behemoth, which is spine because there is just so much opportunity up and down in the cervical spine, in the thoracic spine and in the lumbar spine with regard to [SafeOp] technology."


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