NuVasive, Inc. Obtains New Pedicle Screw Intellectual Property and Buys Out Royalty Obligations on SpheRx Product Line
Under the first transaction, NuVasive has satisfied all remaining royalty obligations for its SpheRx platform of products for a single cash payment of $3.25 million. The transaction provides NuVasive with complete ownership of all features, designs and patents related to "ball-in-rod" technology for use in current and future products. The Company believes the ball-in-rod design is a valuable feature for minimally invasive lumbar and thoracic spine surgery and also has applications in cervical spine surgery. The technology provides surgeons greater angular attachment and ease-of-use features for distraction and compression that are particularly critical during MAS procedures.
Under the second transaction, NuVasive has acquired an exclusive license to intellectual property for the development of its next generation pedicle screw system in exchange for $3 million in cash and certain royalty obligations on sales of the developed product. The Company plans to utilize this technology to develop an additional pedicle screw system in 2009, which will provide greater access to multi-level constructs and trauma procedures. This system will include posted pedicle screws, which allow spine surgeons simpler compression and distraction maneuvers while minimizing the required room in small exposure surgery. This is expected to be a key addition to the Company's future pedicle screw offerings.
Related to these transactions, NuVasive expects to incur a one-time charge of $4.2 million in its first quarter 2008 financial results and to record an intangible asset of $2.1 million which will be amortized over seven years. This one-time charge is not included in the Company's full year GAAP earnings per share guidance, which was provided on February 19, 2008.
Alex Lukianov, Chairman and Chief Executive Officer, said, "The acquisition of this intellectual property is an important strategic step that ensures the continued expansion of our innovative pedicle screw platform through 2015. We believe that our "ball-in-rod" patent portfolio, combined with the newly-acquired exclusive rights to posted screw intellectual property, will create a broad product platform for the further development of innovative pedicle based fusion systems. We also plan to expand our "ball-in- rod" technology to thoracic and cervical applications."
About NuVasive
NuVasive is a medical device company focused on the design, development and marketing of products for the surgical treatment of spine disorders. The Company's product portfolio is focused on applications in the over $4.2 billion U.S. spine fusion market. The Company's current principal product offering includes a minimally disruptive surgical platform called Maximum Access Surgery, or MAS(TM), as well as a growing offering of cervical and motion preservation products.
The MAS platform offers advantages for both patients and surgeons such as reduced surgery and hospitalization time and faster recovery. MAS combines three categories of current product offerings: NeuroVision® a proprietary software-driven nerve avoidance system; MaXcess® a unique split-blade design retraction system; and specialized implants, like SpheRx® and CoRoent®, that collectively minimize soft tissue disruption during spine surgery while allowing maximum visualization and surgical reproducibility. NuVasive's product offering is also focused on cervical internal fixation products and its R&D pipeline emphasizes both MAS and motion preservation.
NuVasive cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause NuVasive's results to differ materially from historical results or those expressed or implied by such forward-looking statements. The potential risks and uncertainties that could cause actual growth and results to differ materially include, but are not limited to: the uncertain process of seeking regulatory approval or clearance for NuVasive's products or devices, including risks that such process could be significantly delayed; the possibility that the FDA may require significant changes to NuVasive's products or clinical studies; the risk that products under development, including those that we intend to develop as described in this press release, may not provide the expected clinical results and may not achieve commercial acceptance; the risk that competitors may develop superior products or may have a greater market position enabling more successful commercialization; the risk that additional clinical data may call into question the benefits of NuVasive's products to patients, hospitals and surgeons; and other risks and uncertainties more fully described in NuVasive's press releases and periodic filings with the Securities and Exchange Commission. NuVasive's public filings with the Securities and Exchange Commission are available at www.sec.gov. NuVasive assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made.
Contact: Investors: Kevin C. O'Boyle Nick Laudico/Zack Kubow EVP & Chief Financial Officer The Ruth Group NuVasive, Inc. 646-536-7030/7020 858-909-1800 nlaudico@theruthgroup.com investorrelations@nuvasive.com zkubow@theruthgroup.com
Media: Jason Rando The Ruth Group 646-536-7025 jrando@theruthgroup.com
Source: NuVasive, Inc.