Renowned MedTech company, NuVasive Inc. NUVA that works on minimally disruptive, procedurally integrated solutions particularly for spine space, received the U.S. FDA’s 510(K) clearance for one of its spine products. This CoRoent Small Interbody System works on intervertebral body fusion at multiple contiguous levels in the cervical spine.
This is the first cervical cage product for up to four contiguous levels, to be approved by the U.S. FDA. Hence, it should capture huge market acceptance post its commercial launch. Notably, cervical radiculopathy and myelopathy secondary to cervical degenerative discs are commonly found in adult these days, causing significant disability and loss of productivity. Data shows that, annually over 0.2 million surgical procedures on cervical spine are performed in the country, indicating a huge and growing market within this niche.
NuVasive is highly optimistic about this 510(k) clearance which is one of the key milestones to strengthen the company’s competitive position in the cervical spine market. Notably, in the recent past, the company has been focusing on expansion in the cervical spine market.
This business got a boost with the launch of iGA cervical in the last reported fourth-quarter 2016. We note that, the iGA platform includes cervical procedures. Encouragingly, NuVasive is the first company to offer a solution for surgeons to address spinal alignment for all spine procedures.
In the last quarter, the company delivered 10% sequential revenue growth and in the coming quarters, it hopes to perform further with this development. Earlier, the company expected its U.S. spinal hardware and other revenues to grow at the rate of 8.4% in 2017, primarily fueled by the adoption of iGA including iGA for cervical.
In the last one month, NuVasive traded below the Zacks categorized Medical – Products industry. The company lost 1.32% over this period, wider than the broader industry’s 0.07% loss. Over the recent past, the company has been witnessing a weak gross margin scenario with expectations of a further decline. Pricing, reimbursement issues and competitive landscape are the other major downsides.
Zacks Rank and Key Picks
NuVasive currently carries a Zacks Rank #3 (Hold). Some better-ranks stocks within the broader medical space include Inogen, Inc. INGN, Orasure Technologies, Inc. OSUR and ZELTIQ Aesthetics, Inc. ZLTQ. While Inogen sports a Zacks Rank #1 (Strong Buy), Orasure and ZELTIQ Aesthetics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inogen gained 28.05% in the last one year compared with the S&P 500’s gain of 14.3%. The company reported a stellar four-quarter positive average earnings surprise of over 49.08%.
Orasure surged 76.8% in the last one year compared with the S&P 500’s gain. Its four-quarter average earnings surprise was a positive 123.5%.
ZELTIQ Aesthetics gained over 100% in the past one year, better than the S&P 500 mark. It posted a trailing four-quarter positive average earnings surprise of 12.03%.
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