(SEEKINGALPHA.COM )–Globus Medical (NYSE:GMED) is a medical device company that focuses on the design, development, and commercialization of musculoskeletal implants that promote healing in patients with spine disorders and products for patients suffering from orthopedic traumas; all in all some 180 products.
GMED is doing well because it is growing considerably faster than the market; that is, it is taking market share from the competition. Here is management on the Q1CC:
The overall U.S. Spine market is growing between 0% and 2%. I don’t know if that’s noticeably different in Q1 for us, but I as would tell you and I always remind everybody, at a 7% share, we’re share takers.
The company is moving beyond its traditional market with the introduction of the ExcelsiusGPS robotic navigation platform for spinal surgery, which raked up its first sale in January this year.
An analyst surmised during the Q1CC that sales are going well:
It’s pretty easy to back into a number that’s 20, 25 systems-ish that was placed over the first two quarters and probably relatively evenly through the two.
Management wasn’t drawn in to comment except stating that interest is strong and increasing, and there were more than a hint that it is emerging as a serious competition for Mazor (NASDAQ:MZOR). From the Q1CC:
I couldn’t tell you at the hospital level in each case where we sold one if they actually compared it to Mazor. I know several of the surgeons that we’re in talks with have seen both systems and we’ve come out favorably in those comparisons from my understanding.
It’s also gaining traction from clients who haven’t previously used Globus implants, so this is a promising situation developing here.
The company is not only selling the ExcelsiusGPS, but it also opens the door to selling more implants. But that’s not all, the company will expand the use of the Excelsius for more indications. Here is management on the Q1CC:
We’re looking at all aspects of the procedure. So, you think about fusion procedure, discectomy, decompression, putting the rod in, all of those aspects of the case. New indications and FDA approval is going to come the second half of this year and then into next year.
Just as its robotic guidance and navigation system, the Excelsius, another part of its Emerging Technology Products are its relatively new trauma products.
In total, this category produced some $12.78M in revenues (out of a total of $174.4M), but this category was zero a year ago.
International sales are another obvious candidate with just 17% ($28.79M) of company revenues coming from abroad. It could do with a little more effort here as these sales are actually growing slower (+10.1%) compared to the US sales (+12.3%).
However, management argued this is mostly an optical effect from having a tough comp due to Q1 2017 international sales being inflated by the Alphatec acquisition where sales were shifted to Q1 2017.
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