March 23, 2017
PARIS & SAN FRANCISCO–(BUSINESS WIRE)–Regulatory News:
SpineGuard (FR0011464452 – ALSGD), an innovative company that develops and markets disposable medical devices designed to make spine surgery safer, reported today its full-year 2016 financial results as approved by the Board of Directors on March 23, 2017.
|€ thousands – IFRS Audited||Dec 31, 2016||Dec 31, 2015|
|Revenue||7 463||6 346|
|Gross margin||6 354||5 365|
|Gross margin (% of revenue)||85,1 %||84,5 %|
|Sales, distribution & marketing||6 643||6 514|
|Administrative costs||2 049||1 968|
|Research & Development||1 295||857|
|Operating profit / (loss)||-3 633||-3 974|
|Net profit / (loss)||-4 178||-3 878|
Pierre Jérôme, CEO and co-founder of SpineGuard, said: “2016 saw SpineGuard’s sales momentum continue and showed the great potential of our DSG™ technology platform. Our commercial organization keeps delivering double-digit growth via our PediGuard family of smart drilling probes, which we expanded with the successful launch of the PediGuard Threaded. At the same time, our R&D investments for the integration of the DSG technology into implantable devices such as pedicle screws has begun to bear fruit with first surgeries in Europe and FDA clearance early in 2017. The US is a key market for SpineGuard where we keep growing significantly year after year. Our focus on operating expenses also allowed the company to improve its operating result. We will continue to pursue this path as one of our corporate objectives for 2017.”
Operating income improves by 9%
In 2016, SpineGuard reported full-year revenue of €7,463k compared with €6,346k for 2015, an 18% increase both on reported basis and cc. 8,603 PediGuard units were sold compared with 7,449 in 2015, including 4,948 in the United States.
The gross margin improved by nearly €1M and 60 bps at 85.1% compared with the prior year of 84.5%, and remains strong. The improvement year-on-year is the result of a combined stability of average selling prices and more favorable country mix with an improved performance on manufacturing cost despite headwinds on currency vs. prior year.
Operating costs increased by €648k (+7%); mainly due to R&D expenses related to the clearance of both PediGuard Threaded and the DSG™ screw (€438k).
With the combination of an improved gross margin and the control of operating expenses, the operating result improved by +€340 k (or +9%) vs. prior year.
The Company reported a net loss of €4,178k for the full-year 2016 compared with a loss of €3,878k for the full-year 2015, impacted by the increase of financial costs related to lower Fx gains of €114k and an increase of interest on loans by €439k.
Working capital was €955k compared with €-65k for the full-year 2015. The increase is mainly due to the building of the inventory of the new products prior to their commercial launch (PediGuard Threaded and DSG modules for the screw), the anticipation of purchases with our Singapore-based manufacturing partner and the Fx Euro/dollar unfavorable impact on the manufacturing cost.
At December 31, 2016, cash and cash equivalents were €1,804k compared with €3,229k at December 31, 2015. The Company has the possibility under certain conditions to draw a €1.5M tranche of debt with IPF Partners.
2016: Excellent sales momentum and strategic objectives achieved
Sales; marketing and regulatory:
2016 was a year of significant breakthroughs in the United States:
- Contracts with important hospital systems were either signed or consolidated;
- A partnership agreement with OrthoPediatrics for the exclusive commercialization of PediGuard® in pediatric hospitals was signed;
- A commercial agreement with Spartan, which is dedicated to veteran and military institutions;
- The expansion to 36 spine teaching institutions using DSG-enabled devices in their curriculum;
- A number of non-stocking distributors growing from 77 to 80;
- The sales team was reinforced with the hiring of a Sr. Sales Manager for the South region and by repositioning a product specialist in the Northeast region;
- FDA clearance of the PediGuard Threaded was received in June 2016, with a product launch in October 2016 at the North American Spine Society (NASS) congress.
In the rest of the world, the Company focused on procuring extensive training and marketing support to the network of distributors making significant progress in various markets:
- PediGuard now used in 50% of the French spine teaching institutions (CHU);
- more than 800 PediGuard units sold in Saudi Arabia through a tender;
- over 70 surgeons participated to the PediGuard Threaded workshop at EuroSpine congress in Berlin in October 2016.
Eleven surgeons presented their experience with PediGuard in international scientific conventions and five new clinical studies were initiated:
- 2 prospective mono-centric studies for the use of PediGuard in minimally invasive surgery in France and United Arab Emirates;
- 1 retrospective mono-centric study for the PediGuard use in so-called bi-cortical techniques in the US;
- 1 prospective randomized and mono-centric study comparing PediGuard to navigation in the US;
- 1 study on specimen about the use of the DSG™ screw with Zavation in the US.
After the FDA clearance in the US early 2017 for the DSG™ screw, SpineGuard intends to:
- Foster adoption of the DSG™ technology through sustained efforts towards surgeons, distributors, teaching institutions and industrial partners;
- Sign new deals to expand the commercial penetration of the DSG™-enabled screws;
- Enlarge the scope of the DSG™ platform to other applications such as Bone Quality Measurement (BQM), combination with robotic, licensing agreements for non-spine (trauma, maxillo facial);
- Continue to grow sales and improve its operating result.
Next financial press release: First Quarter 2017 revenue, on April 6, 2017.
Co-founded in 2009 in France and the USA by Pierre Jérôme and Stéphane Bette, SpineGuard’s mission is to make spine surgery safer by bringing real-time digital technology into the operating room. Its primary objective is to establish its proprietary DSG™ (Dynamic Surgical Guidance) technology as the global standard of surgical care, starting with safer screw placement in spine surgery and then in other surgeries. PediGuard®, the first device designed using DSG, was co-invented by Maurice Bourlion, Ph.D., Ciaran Bolger, M.D., Ph.D., and Alain Vanquaethem, Biomedical Engineer. It is the world’s first and only handheld device capable of alerting surgeons to potential pedicular or vertebral breaches. Over 50,000 surgical procedures have been performed worldwide with DSG enabled devices. Numerous studies published in peer-reviewed medical and scientific journals have demonstrated the multiple benefits that PediGuard delivers to patients, surgical staff and hospitals. SpineGuard is expanding the scope of its DSG platform through strategic partnerships with innovative medical device companies and the development of smart instruments and implants. SpineGuard has offices in San Francisco and Paris. For further information, visit www.spineguard.com.
For further information, visit www.spineguard.com.
The SpineGuard securities may not be offered or sold in the United States as they have not been and will not be registered under the Securities Act or any United States state securities laws, and SpineGuard does not intend to make a public offer of its securities in the United States. This is an announcement and not a prospectus, and the information contained herein does and shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in the United States in which such offer, solicitation or sale would be unlawful prior to registration or exemption from registration.
Chief Executive Officer
Tel: +33 (0)1 45 18 45 19
Chief Financial Officer
Europe / NewCap
Investor Relations & Financial Communication
Florent Alba / Pierre Laurent
Tel: +33 (0)1 44 71 94 94
Ronald Trahan, APR, Ronald Trahan Associates Inc.