|Mobi-C Cervical Disc--Courtesy of LDR Holding|
Spinal surgical device player LDR Holding ($LDRH) has raised $86.5 million in a follow-on financing on the strength of its revenue growth. The $1.2 billion company expects to see revenue increase by as much as 20% before the currency impact in 2015--but hasn't guided as to when it expects to become profitable.
Leading LDR's revenue growth is the Mobi-C cervical disc, which FDA approved in August 2013 and the company claims is the only disc replacement device approved for both level one and level two spinal cervical disease. The Mobi-C demonstrated clinical superiority versus the fusion of two cervical vertebral levels in its pivotal trial. Then in October 2013, LDR went public with an IPO that raised $75 million in which shares were priced at $15.
The company anticipates that the currently small cervical device market will become "one of the fastest growing segments of the U.S. spine implant market," the company said in its follow-on prospectus.
LDR's strategy is to use Mobi-C as an entry point with spinal surgeons to cross-sell its other cervical and lumbar products. The company offers cervical products for spinal fusion, as well as non-fusion approaches, which include one and two level cervical disc replacement. It reported $80.6 million in revenue during the first half of 2015; it expects them to total $166.7 million to $168.1 million for the full year.
Up next, LDR expects to launch its Avenue T posterior transforaminal interbody fusion cage during the fourth quarter. The FDA cleared the device in June.
The company also hopes to gain an FDA clearance for a new product based on its VerteBridge technology and conduct a U.S. launch for it in 2016. The technology reduces the volume of spinal implant hardware by 45% to 60% versus traditional pedicle screw constructs--thereby lowering the trauma and soft tissue damage and preserving surgical revision options for the future, the company said.
"We believe our VerteBridge and Mobi platforms enable products that are less invasive, provide greater intra-operative flexibility, offer simplified surgical techniques and promote improved clinical outcomes for patients as compared to existing alternatives," summed up LDR in its prospectus.
The company had a net loss of $9 million during the first half of 2015 and $62.6 million in cash at June 30. It expects to use $18.2 billion to repay existing debt. LDR also expects to use the cash to fund acquisitions of "complementary technologies," according to the prospectus.
Still, the financing, which netted the company about $75.1 million, could offer plenty of runway as it continues to ramp up revenues. In the offering it sold 2.3 million shares, including the underwriter option, at $40 each.
Although LDR is off a bit on the financing to about $41, so far this year it's gained 27%--indicating shareholders think the company is moving in the right direction.
- here is the statement
- and the latest earnings transcript