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NuVasive (NUVA) Completes First COHERE XLIF Case in U.S.

Zacks Equity Research

In line with its expectation to launch COHERE XLIF in the United States by the second quarter of 2019, NuVasive, Inc. NUVA recently announced the first case using this technology. Cohere XLIF is the first-of-its-kind lateral implant for XLIF (eXtreme Lateral Interbody Fusion) surgical procedure and lateral single-position surgery using Porous PEEK technology.

With this success, NuVasive’s Advanced Materials Science implant portfolio will be enhanced by the incorporation of Porous PEEK technology into its implants for lateral single-position surgery. This apart, the new spinal implant has now become integral to the ongoing NuVasive prospective multicenter study (announced in September 2018), evaluating the advanced implant technologies in XLIF procedures.

COHERE XLIF Prospects

NuVasive claims itself to be the only medical device company to offer porous interbody technology across both PEEK (Cohere and Coalesce) and titanium materials (Modulus implant family). Accordingly, it can cater to the wide spectrum of surgeons' needs and preferences for interbody implants.

Meanwhile, NuVasive’s Porous PEEK technology offers a three-dimensional architecture in conjunction with PEEK’s radiolucent properties. This technology, featured in Cohere implants, is designed to facilitate bone in-growth and claims to deliver improved early clinical outcomes over smooth PEEK and allograft implants.

In this regard, we note that last November, the company received the FDA’s 510 (k) clearance for its COHERE Porous PEEK implant to be used in eXtreme Lateral Interbody Fusion (XLIF) surgical spine procedures.

Market Potential

Per a report by Becker’s Spine Review, the global minimally-invasive spine surgery market is projected to see a CAGR of 7.6% between 2017 and 2021. According to a Technavio report, the global spinal implants market is likely to witness a CAGR of roughly 6% in the 2016-2020 period.

Given the current market prospects, we believe, the company is on the right track to gain traction. We also believe that an ageing population, unhealthy lifestyle, rising awareness and expenditure in healthcare will continue to drive growth for the technology in this minimally-invasive spine surgery market.

A Glimpse of the U.S. Spinal Hardware Business

In the recently reported quarter, revenues at the U.S. Spinal Hardware business increased around 7% to $146.1 million, attributable to the launches of modular 3D printed titanium implants for TLIF and XLIF, Porous PEEK offerings, the expanded PLF implant suite and RELINE Small Stature in the United States. The latest technological development is anticipated to lend an impetus to the company’s revenue contribution from the segment.

Share Price Movement

Over the past year, NuVasive has underperformed its industry. The stock has gained 4.2% compared with the industry’s 14.2% rise.

Zacks Rank and Key Picks

Currently, NuVasive carries a Zacks Rank of #4 (Sell).

Some better-ranked stocks in the broader medical space are Stryker Corporation SYK, Penumbra, Inc., PEN and Varian Medical Systems, Inc VAR, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Stryker’s long-term earnings growth rate is projected to be 10%

Penumbra’s long-term earnings growth rate is estimated at 20.9%.

Varian’s long-term earnings growth rate is forecast at 8%.

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