PARIS and SAN FRANCISCO, Sept. 24, 2015 – SpineGuard (FR0011464452 – ALSGD), an innovative company that designs, develops, and markets disposable medical devices intended to make spine surgery safer, announced today financial results for the half year ending June 30, 2015, as approved by the Board of Directors on September 22, 2015.
Pierre Jérôme, CEO of SpineGuard, said: “We are very pleased with these results for the first half of 2015. Last year’s adjustments to our sales & marketing strategy in response to the rapid changes in our industry and in the health economic environment are now bearing fruit, particularly in the USA and France, where the trend of recent months is really encouraging. This strong rebound after a challenging 2014 revenue-wise demonstrates our resilience and the great value of our DSG™ technology. Apart from a robust sales performance, in H1 we gained Chinese regulatory clearance for PediGuard and performed successful trials with our partners on the DSG screw and threaded drill functional prototypes. These achievements let us foresee promising perspectives for the future of SpineGuard.”
Sales growth, improved gross margin, and reduced net loss
For H1 2015, the Company reported revenue of €2,970k, up 41% compared with H1 2014 and up 21% cc.
Revenue in the United States increased 52% (23% cc) to €2,274k in the first half of 2015, compared with €1,500k in the first half of 2014. In the rest of the world, revenue increased 14% during the first half of 2015 to €696k compared with €610k in the first half of 2014. France, the company’s second direct market after the United States, reported a 42% growth in the second quarter of 2015 after 36% in the first quarter, and represents 5% of the global revenue.
3,716 PediGuard units were sold in the first half of 2015 compared with 3,008 in the first half of 2014, including 1,923 in the United States, representing 52% of total units sold.
Gross margin of 86.1% at June 30, 2015, showed an improvement of 50 bps, compared with the prior year of 85.6%. The gains mainly reflect the sustained ASP level and the optimization of production costs mainly thanks to the scale-up of the products launched in 2013 and 2014.
Operating expenses were €4,890k compared with €4,135k for H1 2014, an increase of €755k compared with June 30, 2014, of which € 427k is attributable to the USD/Euro currency impact and € 227k to variable costs on sales such as US agents’ commissions. Excluding those two elements, operating expenses increased by €102k or 2.5% compared with June 30, 2014.
The Company reported a net loss of €2,180k for the first half of 2015 compared with a loss of €2,467 for the first half of 2014, i.e. an improvement of €287k.
Working capital requirements were €365k, an improvement compared with €406k at December 31, 2014. This continues to illustrate the relatively low operating cash needs of the Company and the efficient management of its financial resources.
At June 30, 2015, cash and cash equivalents were €2,570k compared with €2,507k at December 31, 2014, and is explained as follows:
· The operating cash flow of € (1,943)k compared with the same period last year of €(1,759)k.
· The repayment of bonds, subscribed by Norgine, of €414k for tranche A and €138k for tranche B.
· The on-going repayment of the BPI Innovation loan, of €50k.
· The increase in shareholders’ equity, as a result of:
i. Two Paceo equity facility draws in April and May, totaling €345k (net of expenses).
ii. Two capital increases in June of €1.6M by private placement and €0.9M by other
qualified investors including the co-founders and certain managers and directors.
The Company’s workforce count is 27 at H1 2015, compared with 25 at the end of December 2014.
Outlook and recent events:
The half-year revenue for 2015 is very encouraging and highlights the strides accomplished by the company in the past few months. The USA and France markets stand out in this regard. SpineGuard has executed the roadmap presented at its IPO but also accelerated the DSG™ (Dynamic Surgical Guidance) screw and threaded drill projects.
The recent regulatory clearance of the PediGuard Classic range in China allows the company to enter the second-largest market in spine after the USA.
SpineGuard also continues to work with its Middle-East partners in order to capture the opportunities offered by the large tenders in this region of the world.
The DSG platform is unique in its ability to both differentiate between tissues in real-time and limit radiation exposure to surgical teams and patients. The DSG screw and DSG threaded drillprojects are potentially disruptive innovations, greatly simplifying the placement of the most commonly used device in spine surgery: the pedicle screw.
SpineGuard’s first two non-exclusive partnerships with Neuro France Implants and Zavation have delivered on rapid developments. The Company remains highly confident that first DSG threaded drill and screw surgeries will take place in Europe before year end, less than 12 months from signing of the partnerships. SpineGuard believes these new products will provide strong growth for the company in the future.
Next financial press release: 2015 third quarter revenue, October 6,2015
SpineGuard will participate at the Large & Midcap Event 2015 on October 7 and 8 in Paris.
SpineGuard will participate at Actionaria on November 20 and 21 in Paris.
About SpineGuard®
Co-founded in 2009 in France and the USA by Pierre Jérôme and Stéphane Bette, SpineGuard’s mission is to make spine surgery safer. Its primary objective is to establish its proprietary DSG™ (Dynamic Surgical Guidance) technology as the global standard of surgical care, initially for 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 40,000 surgical procedures have been performed worldwide with PediGuard. Numerous studies published in peer-reviewed medical and scientific journals have demonstrated the multiple benefits that PediGuard delivers to patients, surgical staff and hospitals. In 2015 SpineGuard started to expand the applications of DSG into pedicle screws through partnerships with innovative surgical companies in France and the US. SpineGuard has offices in San Francisco and Paris. For further information, visit www.spineguard.com.
