- Includes Unique Technology and Inventory -
- Annual 2006 Product Revenue Guidance of $2 to $3 Million -
- Rights of First Refusal on Further Technological Advances -
SAN DIEGO, June 6 /PRNewswire-FirstCall/ -- NuVasive, Inc. (Nasdaq: NUVA),
a medical device company focused on developing products for minimally
disruptive surgical treatments for the spine, announced today that it has
acquired the intellectual property and related assets for a cervical plate
technology from RSB Spine LLC, a privately owned company focused on spine
technology, for $5.5 million of cash and 222,929 shares of the Company's
common stock or approximately $9 million based on NuVasive current stock
price. In addition, RSB will receive annual milestone payments for the life of
the acquired patent based on sales.
The transaction provides NuVasive with cervical plate technology that
received FDA 510(K) clearance and was first commercialized in 2004. NuVasive
will obtain all product revenues beginning in June of 2005 and plans to
re-launch the cervical plate (currently named Smart Plate), under its own
product name in July 2005. The product is a dynamic plate that offers unique
features and benefits that the Company believes make the plate superior to
others on the market including those under development at NuVasive. The
product has been used in approximately 250 cervical fusion procedures to date.
The Company's guidance is for 2006 annual product revenue of approximately $2
to $3 million.
The transaction provides NuVasive with a dynamic cervical plate that
encompasses a gradient locking mechanism that enables the screws to be
progressively resistant to axial compression. This dynamic technology allows
the plate to settle in concert with the eventual allograft implant settling
that occurs within the disc space over time, offering a better anatomical fit.
NuVasive's cervical plate previously under development was a fixed cervical
plate that did not account for such implant settling, which produces better
fusion results. An additional design feature is the product's low profile
tapered leading edge design, which translates into less post-operative soft
tissue disruption for the patient. As with other NuVasive surgical
approaches, the product utilizes familiar instrumentation that allows for
rapid surgeon adoption and easier insertion of the plate on to the spine.
In addition to the intellectual property and pending patent, the sale
includes instrument sets and accompanying cervical plate inventory of
approximately $1 million. The agreement grants NuVasive the right of first
refusal on all additional existing technologies and any future technology that
may be developed by RSB Spine during the next five years. This would include
enhancements to the gradient locking technology and other products that would
be complementary to the acquired technology.
Separately, the Company announced that it will take a charge in the second
quarter of 2005 of approximately $400,000. The charge is for investments in
fixed assets and inventory created for the initial alpha/beta testing of the
Company's own cervical plate that was under development.
Alexis V. Lukianov, Chairman and Chief Executive Officer of NuVasive,
said, "This cervical plate technology is among the best that we have seen in
the market. We were impressed with the technology and dynamic nature of the
plate, which we believe makes it superior to the fixed plate we have had under
internal development. The gradient locking mechanism represents a substantial
leap in technology. We complement the work that Dr. Bray and RSB have done in
developing the plate and bringing the product to successful
Mr. Lukianov continued, "We are particularly excited with the gradient
locking technology and look forward to its potential application to future
spinal products in our development pipeline. The right of first refusal on
new technologies in essence expands our existing product pipeline. We
believe this access to additional technology from RSB in and of itself
provided a strong rationale to proceed with this transaction."
Mr. Lukianov continued, "We believe the cervical plate product offers
strong synergies for surgeons using a NuVasive interbody cervical implant and
believe surgeons will find the product's ease-of-use and clinical benefits
extremely effective and beneficial to their patients. The plate is a
strategic addition to our classic fusion line as we continue to consolidate
our distribution efforts and move towards greater exclusivity among our
Dr. Robert Bray of Cedar-Sinai Medical Center and Marina Hospital in Los
Angeles, developer of the acquired cervical plate technology, said, "Over the
years, I have used a variety of cervical plating systems for my patients in
concert with an interbody graft. The SmartPlate is the first system that
provides controlled settling of the spine onto the graft with progressive
constraint of screw motion as the cervical spine naturally falls into balance.
I have seen rapid incorporation of the grafts with less post operative pain
which has made a positive impact on my patients' recovery and return to normal
function in the short and long term."
Andrew Cappucino, MD, FAAOS, FACS, Spinal Surgeon, Kenmore Mercy and
Millard Fillmore Gates Circle Hospitals in Buffalo, commented, "The RSB plate
is the only available dynamic cervical plate that truly controls graft load
with its gradient locking system. There is tremendous advantage in delivering
this feature in an easy to use cervical plating system."
NuVasive will hold a conference call at 11:00 a.m. EDT / 8:00 a.m. PDT to
discuss the announcement. The dial-in numbers are 1-800-811-8830 for domestic
callers, and 1-913-981-4904 for international. The reservation number for
both is 5984540. A live Web cast of the conference call will be available
online from the investor relations page of the Company's corporate Web site at
After the live Web cast, the call will remain available on NuVasive's Web
site, http://www.nuvasive.com, through June 20, 2005. In addition, a
telephonic replay of the call will be available until June 27, 2005. The
replay dial-in numbers are 1-888-203-1112 for domestic callers and
1-719-457-0820 for international callers. Please use reservation code
We are a medical device company focused on the design, development and
marketing of products for the surgical treatment of spine disorders. Our
product portfolio is focused on applications in the over $2 billion U.S. spine
fusion market. Our current principal product offering includes a minimally
disruptive surgical platform that we call Maximum Access Surgery, or MAS(TM),
as well as classic fusion implants.
The MAS platform offers advantages for both patients and surgeons such as
reduced surgery and hospitalization time and faster recovery. MAS combines
three categories of our current product offerings -- NeuroVision(R), a
proprietary software-driven nerve avoidance system, MaXcess(R), a unique
split-blade design retraction system and specialized implants, like SpheRx(TM)
and CoRoent(TM) -- that collectively minimize soft tissue disruption during
spine surgery while allowing maximum visualization and surgical
reproducibility. Our classic fusion portfolio is comprised predominantly of
proprietary saline packaged bone allografts and internal fixation products.
NuVasive also has a robust R&D pipeline emphasizing both MAS and motion
preservation products such as Total Disc Replacement (TDR).
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 that involve risks,
uncertainties, assumptions and other factors which, if they do not materialize
or prove correct, could cause NuVasive's results to differ materially from
historical results or those expressed or implied by such forward-looking
statements. All statements, other than statements of historical fact, are
statements that could be deemed forward-looking statements. The potential
risks and uncertainties that could cause actual growth and results to differ
materially include, but are not limited to, the rapidly changing and
competitive nature of the medical device industry, NuVasive's ability to
convince surgeons to use its products, the ability of patients to obtain
third-party reimbursement for surgical procedures employing NuVasive's
products, risks related to government regulation of medical devices, risks
related to NuVasive's ability to effectively manage the growth of its
business, risks related to ownership and enforcement of intellectual property
rights, NuVasive's ability to successfully develop new products, and other
risks and uncertainties more fully described in NuVasive's Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and
Exchange Commission.. NuVasive's public filings with the Securities and
Exchange Commission are available at http://www.sec.gov. NuVasive assumes no
obligation to update any forward-looking statement to reflect events or
circumstances arising after the date on which it was made.
Kevin C. O'Boyle
EVP & Chief Financial Officer
Carol Ruth /Nick Laudico
The Ruth Group
SOURCE NuVasive, Inc.
CONTACT: Kevin C. O'Boyle, EVP & Chief Financial Officer, NuVasive,
Inc., +1-858-909-1800, firstname.lastname@example.org;
Investors - Carol Ruth,
+1-646-536-7004, email@example.com, or Nick Laudico, +1-646-536-7030,
both of The Ruth Group for NuVasive, Inc.
Web site: http://www.nuvasive.com