Baxano Surgical reported a huge increase in revenue in the first quarter of 2013 when compared with the same period last year, but reported a $0.19 loss per share.
Here are five takeaways from Baxano's most recent financial report:
1. The company's revenue did not meet projections for the first quarter. Revenue was $4.4 million, a 42.4 percent increase over the same period last year. Domestic revenue also increased $2 million to reach $4.3 million — almost all of the company's revenue — during the first quarter. After evaluating the sales force effectiveness over the past few quarters, the company will implement a revised sales force strategy.
"While our revenue this quarter came in slightly below our expectations, we are confident that this revised strategy will drive us towards sequential revenue growth and reduce operating expenses," said Ken Reali, president and CEO of Baxano Surgical. The company expects total revenue for the second quarter at $4.4 million to $4.8 million.
2. The company also reported a $9.1 million net loss in the first quarter, which was significantly more than the same period last year. On April 22, 2014 the company announced the closing of private placement of approximately $10 million aggregate principle amount of subordinate convertible debentures and warrants to purchase around 9.4 million shares of common stock to entities affiliated with two institutional investors.
3. In April, the company received an FDA 510(k) clearance for its Avance MIS Pedicle Screw System, which may be used as an adjunct to fusion in numerous degenerative and complex pathologies. The percutaneous pedicle screw system can address single or multi-level pathologies with minimal tissue disruption and trauma. The product will be in limited market released during the second quarter and is planned for a full launch in the fourth quarter of this year.
"We believe the recently cleared Avance MIS Pedicle Screw System is another strong addition to our differentiated portfolio of products focused on MIS degenerative lumbar spine," said Mr. Reali.
4. Surgeon users during the first quarter were consistent with the fourth quarter, but case volume and case per surgeon were down materially, according to a Seeking Alpha report of the first quarter earnings conference call.
"The case volume declines were primarily due to some seasonal strength in the fourth quarter as patients elected to have procedures prior to their deductibles being reset, coupled with the adverse weather conditions in the first quarter in the Northeast and Midwest which caused procedures to be delayed," said Mr. Reali in the report. "We have seen a nice bounce back in case volumes in April, providing an encouraging start to the second quarter."
5. AxiaLIF revenue was $1.2 million during the first quarter, down significantly from the previous quarter, primarily due to private payer resistance to covering the procedure. Two-level AxiaLIF also declined. Worldwide revenue for iO-Flex was $2.4 million, down slightly from the fourth quarter; however iO-Flex had 26 new surgeon users in the first quarter.
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