Medical device player Greatbatch ($GB) expects that the spinoff of its Algostim subsidiary will be complete by year end. Now, it's dubbed the anticipated new public company Nuvectra, whose creation was previously announced in late April. FDA approval is expected by the end of the year for Nuvectra's first product, the Algovita Spinal Cord Stimulation (SCS) system to treat chronic intractable pain of the trunk and/or limbs.
The company previously said that it received an approvable letter from the FDA for Algovita regarding its PMA submission. Agency approval of Algovita is subject to an "FDA inspection that finds the manufacturing facilities, methods and controls in compliance with the applicable requirements of the Quality System regulation," the company said in a statement. The device gained a CE mark in June 2014.
Greatbatch will continue to manufacture the Algovita SCS system under a long-term supply agreement. The spinoff is expected to be tax-free to shareholders. The new company expects to develop additional applications of the QiG technology platform, upon which Algovita is based.
"Nuvectra is focused on new ideas and approaches to implantable medical devices that improve the overall safety, efficacy, and usability for clinicians and patients," said Tom Hickman, EVP of the Nuvectra subsidiary, in a statement.
As for the remaining Greatbatch, it will focus more closely on the cardiac, vascular and orthopedic markets as it spins off the neurostim group that was established in 2008.
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| Greatbatch CEO Thomas Hook |
"Orthopedics continues to have sustainable constant currency double-digit growth," summed up Greatbatch President and CEO Thomas Hook in an April call regarding the spinoff. "However, cardiac neuromodulation will continue to show the impact of end of life products and customer inventory initiatives for at least one more quarter. In addition, our portable medical product lines fell short again this quarter, though we are very encouraged because of the pipeline of products. We are working on and the excellent progress we are making in transitioning to our new manufacturing facility. We also have several margin expansion initiatives that are on or ahead of schedule."
Greatbatch shareholders have remained relatively neutral on the Nuvectra spinoff, sending shares down almost 1% since April 30. For the year, Greatbatch is up 7% to a market cap of almost $1.4 billion.
- here is the release
- and the April transcript from Seeking Alpha