Micro-cap Amedica raises $15M to back silicon nitride implants as it chases profitability

Valeo II AL Interbody Fusion Device--Courtesy of Amedica

Tiny public company Amedica ($AMDA) has managed to restructure its finances, including raising $15 million in capital from undisclosed institutional investors. That's an impressive feat for a micro-cap with a market cap of less than $30 million that has yet to become profitable.

In addition to the financing, the company also settled with existing investor MG Partners, as well as amended existing loan agreements with Hercules Technology Growth Capital. Investors drove the volatile penny stock up 4% in early trading on the news.

Amedica is focused on marketing silicon nitride ceramics based spinal fusion implants. It's also developing next-gen components for hip and knee arthroplasty. Silicon nitride is thought to be largely chemically inert--the company also claims it has properties that promote bone growth and osteo-integration, as well as antibacterial properties.

Amedica CEO B. Sonny Bal

"We sell branded products directly to hospitals through a sales force and distribution structure that's established," summed up Amedica chairman and CEO Dr. B. Sonny Bal on an August earnings call.

"Second, we can privately label these innovative silicon nitride products to other companies looking to broaden and differentiate the product portfolio. And lastly, we are able to develop OEM (original equipment manufacturer) partnerships where we can take a company's existing device, the product line which is made out of the legacy material such as plastic, or metals with limitations are known and we can ceramitize it or convert it very precisely into silicon nitride better than anybody else," he said

"This multi-pronged strategy allows us to capture additional market share while achieving profitability on an accelerated timeline as compared to our peers given the superior benefits of our biomaterial technology platform," Bal concluded.

At June 30, Amedica had $12.4 million in cash with a first half 2015 operating loss of $6.6 million. That's down from the same period the year prior when it had a $14.7 million operating loss.

Not only is it trimming its losses, but the company anticipates a total of $19 million to $20 million in 2015 revenue. Amedica also expects to end 2015 with a $5 million to $7 million operating profit, reaching operating cash flow breakeven in the second half of 2016.

The company's silicon nitride product sales are expected to gain 15% to 20% in 2015, but its other products are weighing on that growth. 

- here is the announcement
- and here is the August earnings transcript