An initially promising Q4 faltered under the weight of the COVID-19 resurgence, leading to a Q420 WW Spine Hardware Market decline of -1.0%. 

The continued rebound that everyone had been hoping for was dampened by the COVID-19 resurgence in Q420. While the quarter got off to a promising start, COVID headwinds picked up negatively impacting Spine procedure volumes due to challenges with hospital resource utilization and renewed restrictions around elective procedures. For example, NuVasive* management noted that the Company entered Q4 with relatively stable case volumes but experienced market disruption from the resurgence of COVID-19 at the exit of the quarter, most notably in parts of the US and Europe.

Among the many topics covered in the comprehensive Q420/FY20 Spine Market Recap * are:

Derrick Johns, President and CEO of DiFusion Technologies, discusses the challenges and opportunities associated with developing and commercializing a new biomaterial in an interview with SmartTRAK. 

Nearly every company in Spine (and dare we say all of Orthopedics) is working to find the holy grail of biomaterials for interbody implants and more. DiFusion Technologies’ President and CEO Derrick Johns discusses the challenges and opportunities associated with bringing a novel material to market in an interview with SmartTRAK.

To listen to the interview, recorded live via Zoom, click on the following video. A link to download a complete transcript of the interview is also provided below.

Tracking which procedures will drive growth within the Spine hardware market as we ride the ups and downs of COVID-19.

Following a Q320 rebound in elective procedures sparking a return to growth for the COVID-ravaged Spine market, the recent COVID resurgence has once again dragged US Spine growth rates down. While many companies have yet to report Q420 earnings, early signs point to a downturn, with procedure volumes impacted by hospital resource utilization and renewed restrictions around elective procedures.

In this article, Julianne Burns, SmartTRAK's GM, Spine, looks at the following topics:

• The COVID Impact Update
• Shifts in Cervical Total Disc Replacement (cTDR)
• Growth in Prone Lateral Procedures
• Expansion in SI Joint Fusion
• Innovation in Interbody Materials

Orthopedic Robotic Installations Continued to Shatter Expectations in Q320

Orthopedic robotics is still in the early stages of adoption with SmartTRAK estimating that more than 25% of US hospitals have a robot and that fewer than 18% of TKA procedures in the US will have been performed robotically by YE2020. However, Stryker* noted in its Q320 earnings call that orthopedic robotic adoption (MAKO*) has started to reach an inflection point with an uptick in momentum that includes increasing interest, multiple installations in centers, placements into teaching hospitals and a shift to ASCs. Increasing competition from Zimmer Biomet’s* ROSA* and the launch of Smith & Nephew’s* CORI* second-generation robotic platform, has helped to push accounts that were thinking about purchasing a robot to follow through.

Among the many topics, including company revenues, shares, charts and expert analysis, covered in the comprehensive Q320 CAS Ortho Market Recap* are:

Continuing robotic implant pull-through and achievement of enabling technology milestones reflect increasing importance of CAS Spine technology in Q320.

Similar to market dynamics in recon robotics, spine robotics are beginning to reach a tipping point in market acceptance. In its Q320 earnings call, CEO Dave Demski noted that Globus Medical* is seeing increasing interest in its Excelsius GPS* robot and that the Company is in a different part of the robotic adoption curve, with surgeons well beyond their initial skepticism as robots have become more mainstream. Globus and Medtronic* have the strongest positions in enabling technology and robotics in spine. However, competition will be heating up over the next several years.

Rising COVID cases in the US casting shadows of doubt on ongoing rebound for the Spine market. 

Quarterly results hint at a sustained rebound for the Spine market even as the US faces a surge of COVID cases. WW Spine Hardware revenues were up as surgeons worked through a backlog of patients postponed due to COVID-19. The US Spinal Fusion Market saw a +3.6% uptick in Q320, with the US Disc Replacement market, VCF and Dynamic Devices all showing growth, according to SmartTRAK Financial Dashboard.

In an October Needham Spine & Robotics Expert Call, Spine surgeon Dr. Peter Whang noted that he and his peers were operating at full capacity at the time with a large backlog of patients to work through. In order to catch up on cases, accommodations are being made with extended clinic hours and elective cases scheduled on weekends. Dr. Whang affirms that COVID has accelerated the shift of spine procedures to an ASC setting and notes that ASC cases recovered faster and will be more resistant to any restrictions due to future COVID spikes.

Among the many topics covered in the comprehensive Q320 Spine Market Recap* are:

The effects of COVID-19 were felt throughout the WW Spine Market with dramatic Q220 declines in both the US and international markets. 

COVID-19 stifled the Spine Hardware Market in Q220, driving WW revenues down -26.4% in the quarter, with the US at -30.5%. The US Spinal Fusion Market took the hardest hit, with that market seeing a -31.4% decline in Q220 vs US Disc Replacement and VCF Markets at -26.6% and -24.6%, respectively, according to SmartTRAK Financial Dashboard. Needham estimates that Medtronic* gained the most spine share in Q220, with DePuy Synthes* losing the most. 

Among the many topics covered in the comprehensive Q220 Spine Market Recap* are:

Tracking the surge of Spine M&A activity during COVID-19.

The med device market downturn related to COVID-19 has led to a notable uptick in M&A activity across the board, with a number of acquisitions that will impact the Spine market.

Recent Deals
Perhaps the most notable deal has been Medtronic's* (MDT) agreement to acquire Medicrea, a manufacturer of custom spine implants, for about €7.00 per share, a premium of 22% over the closing price of shares on July 14. The acquisition is expected to close by the end of 2020.

The latest intel suggests the spine market is rebounding more quickly than expected, but certain new market dynamics will persist.

While much remains up in the air, early data suggests the spine market is rebounding more quickly than expected. Surgeons are beginning to perform cases that were postponed through March and April due to COVID-19. In conversations with WFS analysts,  NuVasive* (NUVA) management reported a mix of both deferred cases and new volume in May. NUVA’s spine business reportedly tracked ~50% below pre-COVID levels in May versus ~70% below in April. The Company’s current trajectory and consensus expectations for the quarter implies a recovery in procedure volumes to 35% below pre-COVID levels in June according to  WFS NUVA: Takeaways From The 2020 “Virtual” Bus Tour Report. Similarly, Canaccord Genuity estimates  Alphatec’s* FY20 US revenue will be down –9.7% YoY with an estimated -45.6% drop in Q220 sales. This assumes the impact from COVID-19 started in mid-March, April revenues were down ~60-70%, and notable improvement began in early May as more states resume procedures.

Spine’s solid start to Q120 was derailed in March by COVID-19, leading to a -10.6% YoY decline globally.

Q120 reporting gives us the first glimpse into the effect of COVID-19 on the spinal hardware market, with the impact in the US felt starting in mid-March. A multi-dimensional survey of 902 spine surgeons around the globe revealed that 67.1% of respondents saw the cancellation of greater than 75% of their surgical cases per week in late March/early April. Global Spine J.

The WW Spine Hardware market experienced a -10.6% downturn in the quarter, with the US down -11.2%. Several companies noted they were tracking for strong Q1 growth prior to the pandemic. At the end of February, SeaSpine* reported that it was looking at another quarter of double-digit US growth, but ended up with a slight overall decline in Q1 US revenue due to March procedures being down an estimated -18% vs March 2019. 

Among the many topics covered in the comprehensive Q120 Spine Market Recap* are: