$2.52 Billion
Prior Fiscal: $1.57 Billion
Percentage Change: +60.5%
R&D Expenditure: $163.7M
Best FY24 Quarter: Q4 $657.3M
Latest Quarter: Q2 $745.3M
No. of Employees: 5,300
Global Headquarters: Audubon, Pa.

Executive shuffling is nothing new to the orthopedic device industry. New leaders offer a fresh face and ideas to (hopefully) propel their organizations into long-term success.

In mid-July (2025) Globus Medical revealed that three-year chief executive officer Daniel Scavilla was leaving the company to inhabit the corner office of Dentsply Sirona, a global dental equipment and solutions company. Scavilla joined the company in 2015 as senior VP and chief financial officer (CFO). He moved to the chief commercial officer role in 2020, and took the CEO role in 2022.

Keith Pfeil, who was elevated to Globus’ chief operating officer and CFO position in February, was tapped to be the new president and CEO of the company.

“It has been an honor to lead Globus Medical and be part of this exceptional team,” said Scavilla. “As the company continues to move forward, I have made the decision to step down to pursue another opportunity. I look forward to watching the company’s continued success as Keith leads Globus into its next chapter and know that he will drive meaningful impact to the company as it moves ahead. I’m proud to have been part of Globus.”

Pfeil began his tenure with Globus in 2019 as senior VP and CFO. Kyle Kline was accordingly promoted from senior VP of finance to senior VP and CFO. Kline joined the company in 2017 as the assistant controller and moved up the ranks over his eight-year career there.

“I’m deeply grateful to David and the board for this opportunity and want to thank Dan for his mentorship and partnership throughout my journey thus far at Globus,” commented Pfeil. “I’ve had the opportunity to grow with this team over the past six years, and I am excited to carry forward our strong culture of purpose, innovation, and teamwork that will meaningfully impact the lives of patients as we move ahead.”

Now that NuVasive Inc. has been fully welcomed into Globus’ fold, the company and its new CEO enjoyed nearly $1 billion more revenue than the previous year, rocketing 60.5% upward to $2.52 billion of revenue in its most recent fiscal year (ended Dec. 31, 2024).

U.S. proceeds ascended $720.3 million (56.3%), significantly driven by the merger with NuVasive. Domestic musculoskeletal sales climbed $658.8 million due to a $564.6 million hike in spine products, as well as neuromonitoring solution revenues of $73.7 million. Domestic enabling technology sales rose $36.2 million compared to the prior year, which was provoked by higher unit placement.

ANALYST INSIGHT: “With the acquisition of Nevro (neurovascular) and NuVasive (spine), Globus seems to be gaining market traction through acquisition. The key question will be: Can Globus execute on these acquisitions to gain market share or will it distract them?”

—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors

International sales went up $230.6 million (79.9%), also greatly driven by the NuVasive merger. The increase was mainly a result of musculoskeletal sales growth of $231.3 million thanks to spine products. The Europe and Middle East region led the charge with a $116.9 million revenue expansion, followed by $87.2 million in Asia Pacific and $26.8 million in Latin America.

U.S. Food and Drug Administration (FDA) clearance for the ExcelsiusFlex and Actify 3D total knee system arrived in July 2024. ExcelsiusFlex assists with primary total knee arthroplasty for robotically-guided resections based on surgeons’ implant placeless planning. It offers multiple workflows and unrestricted, jig-less resections to control the saw and procedure, and streamlined software facilitates efficient surgeries.

The Actify 3D total knee was designed to pair cementless reconstruction with operative efficiency and anatomic fit. The knee is additive engineered to combine strength and a porous lattice interface to accommodate surgeon preference and varying anatomies.

The company was unfortunately handed a warning letter from the FDA in July as well. It was issued because the company failed to follow quality systems regulation and medical device reporting requirements. The letter also noted issues with the company’s corrective and preventative action (CAPA) practices for not correctly addressing recurring quality issues, including the firm’s analysis of dozens of reports of misplaced surgical screws.

“In your responses, you provided data showing counts of misplaced screws per 10,000 screws implanted from 2017 to 2024,” said FDA. “However, there was no additional level of data analyses, using appropriate statistical methodology, to determine whether there are any trends associated with part numbers, including the spine and cranial modules; lot numbers; patient symptoms; confirmed and alleged defects; causes determined by complaint investigations (e.g., software, components, user error); etc., for complaints specifically related to misplaced screws navigated by the EGPS surgical robot.”

The letter, according to a Globus SEC filing, didn’t identify safety concerns with use of the ExcelsiusGPS robotic system, and didn’t raise issues with its manufacturing process.

FROM THE TOP: “Our financial results demonstrate the potential of our combined organization and the growing value creation from the merger. Despite the complexities of integration, we delivered record fourth quarter and full year sales, while maintaining our disciplined approach to operational excellence and cost management.”

—Keith Pfeil, CEO

August witnessed the commercial launch of the Adira XLIF plate system, the company’s first launch compatible with its expanded lateral interbody portfolio. The plates provide simplified insertion and a rigid coupling mechanism to align plates over interbody spacers to boost construct stability. They’re compatible with bone screws and lateral MIS anchors, providing versatility in bone fixation options and interbody spacer types.

Adira plates can be assembled to lateral lumbar interbody fusion devices—HEDRON L, TransContinental, RISE-L, Modulus XLIF, Cohere XLIF, or CoRoent—with an alignment screw to create an Adira plate-spacer assembly. The plates come in one-, two-, and four-hole configurations.

The company introduced several additions to its orthopedic trauma portfolio in October. Globus notched FDA clearance for the Tensor suture button system, its first suture-based product. Tensor aims to redefine suture management through a self-locking suture and an inserter with integrated tensioning handles. It’s compatible with the company’s Anthem ankle and one-third tubular plates and features a two-hole washer kit to repair isolated syndesmotic injuries.

The Anthem distal radius fracture system touts anatomically contoured plates and polyaxial locking tech that allows for ±20° of angulation (40° cone) in polyaxial volar, fragment specific, and diaphyseal metaphyseal plates. MonoAx locking tech allows a thin volar plate design to support distal plate placement for complex, intra-articular fractures.

The Autobahn trochanteric nail system treats a variety of pertochanteric femur fractures and comes with the PRO instrument set and distal targeting system. The Captivate SOLA headless compression screw addresses fracture repair, bone reconstruction, osteotomy, and arthrodesis procedures through ample implant options and shared instruments for paired screw sizes. Screw diameters include 2.0, 2.5, 3.0, 3.5, 4.0, 4.5, 5.5, 6.5, and 7.5 mm in lengths ranging from 10-140 mm. All screws are available in stainless steel and titanium alloy, with options for short and long partial threads.

The ExcelsiusHub navigation system launched in November. Designed to elevate freehand navigation, it offers real-time visualization of implant placement and reduced reliance on X-ray imaging during spine surgery. The system facilitates screw and interbody spacer implant placement and can reduce OR radiation compared to conventional fluoroscopy.

Safety features pair navigational accuracy with patient array shift tracking and navigation of the DuraPro oscillating system. It comes with imaging versatility with three distinct workflows: automatic registration with Exclesius3D, CT to fluoroscopy merging for pre-op implant planning and quick intraoperative re-registration, and interoperative 2D navigation. Instrument and implant navigation supplies complete procedural solutions from the cervical spine to the sacrum.

$1.57 Billion
Prior Fiscal: $1.02 Billion
Percentage Change: +53.3%
R&D Expenditure: $124M
Best FY23 Quarter: Q4 $616.5M
Latest Quarter: Q1 $606.7M
No. of Employees: 5,000+

It seemed like a winning strategy, at least in theory.

The plan, in its simplest form, called for automotive powerhouses Daimler-Benz and Chrysler Corporation to join forces and rule the car manufacturing industry.

From foe to friend.

The strategy made sense, as both companies faced the same global challenges at the time (late 1990s)—overcapacity, rising environmental awareness, strengthened position of clientele—and were indubitably developing similar solutions. By banding together, the firms could significantly boost their chances of conquering those formidable market forces.

A logical step, presumptively.

Thus, with a metaphorical eye on market dominance, Daimler-Benz and Chrysler merged on May 7, 1998, in a historic $37 billion marriage. It was the largest acquisition (up to that point) of a U.S. company by a foreign buyer.

The corporate newlyweds began their blended life together under a new name—DaimlerChrysler AG—and new synarchy (Daimler stockholders owned the majority of shares). The honeymoon, however, didn’t last very long.

Trouble between the pair began soon after their proverbial vows. The firms found themselves on opposite ends of the corporate culture spectrum, clashing over leadership hierarchy, financial models, brand perception, pay scales, labor practices, regulatory priorities, and market dynamics.

Basically, everything.

Compounding all those irreconcilable differences was the fact the so-called “merger of equals” was, in essence, a takeover of Chrysler.

The two companies were never successfully integrated, and their dreams of market dominance quickly faded. The pair divorced in 2007 after Daimler-Benz off-loaded Chrysler to global investment firm Cerberus Capital Management LP for $7 billion.

“Why did this happen? Because the two organizations really didn’t like each other, and couldn’t cooperate to the extent necessary to make the combination work,” Genesis Advisors cofounder and IMD leadership and organizational change professor Michael D. Watkins wrote in a May 2007 Harvard Business Review article. “And there were unbridgeable differences in the cultures of the two organizations. As is too often the case in acquisitions, the synergies were all on the surface. In theory, the Daimler-Chrysler combination should have yielded two very potent sources of competitive advantage. [But] the two organizations never were integrated into anything that approached a cohesive whole. The potential synergies that were used to justify the deal went unrealized.”

The Daimler-Chrysler merger failure exemplifies the difficulty of post-acquisition integration. Companies often underestimate the importance and challenges of M&A integration, assuming the combined parties’ workforce, projects, products, and internal processes will fall smoothly into place. Few realize that integration is probably one of the most difficult aspects of an acquisition or merger.

To ensure a problem-free and successful post-merger unification, organizations must fully understand each other’s corporate culture and work to create a harmonious environment where both entities can thrive.

Such an environment is beginning to take shape in the wake of Globus Medical’s $3.1 billion deal for minimally invasive (MI) spinal implant maker NuVasive Inc. Revealed in February 2023 and finalized last fall, the union created the second-largest spine firm behind Medtronic, capturing 21% of the global market share, industry data indicate.

The combined company (retaining the Globus Medical moniker) is expected to benefit from a larger sales force and each half’s respective strengths—Globus’ in-house manufacturing capacity, for example, and NuVasive’s global distribution networks. The post-merger entity also anticipates an estimated $170 million reduction in costs.

Analysts have expressed their doubts about the chances for a happy Globus-NuVasive marriage. Published reports from the time of the deal’s announcement quoted several industry analysts who noted the two companies’ “traditional differences” and “different approach to commercialization, profitability, and corporate culture.”

Globus President/CEO Daniel T. Scavilla, however, allayed those misgivings during an earnings call earlier this year, assuring analysts the company is on track for implementing “common operating systems” and organizational structures that will enable employees to “work as one company and one team.” He also relayed his observations from the combined firm’s U.S. National Sales Meeting, claiming it was impossible to distinguish between Globus and NuVasive sales folk.

“By the first evening’s product fair, you could no longer tell who came from Globus or who came from NuVasive,” Scavilla said during a Q4/full-year 2023 earnings call in February (2024). “There was only one strong energy in the room, focused on our combined portfolio and innovation, and a genuine excitement to get back out in the field and win. This team and that meeting reconfirmed by belief that we really are more alike than different and when combined, we’re unstoppable. I believe the potential for Globus has never been greater. It’s up to us to harness our resources and shape the future of the markets. We have at our fingertips everything we need to realize this.”

Everything including financial clout: Buttressed by a $414.9 million contribution from its corporate spouse, Globus surpassed $1.5 billion in annual sales last year for the first time in its history, officially reaching $1.57 billion, according to its 2023 annual report. NuVasive clearly was the catalyst in the 53.3% sales spike, though Globus performed well as a single entity too, jacking revenue 12.8% to $1.15 billion (excluding the NuVasive deal’s impact).

Globus attributed the sales increases to NuVasive’s addition as well as higher spine product revenue and enabling technology volume.

Those same factors spawned gains in U.S. and international proceeds last year. U.S. sales jumped 46.8% to $1.28 billion, while international revenue skyrocketed 91.3% to $288.7 million, the annual report indicates.

Similarly high growth rates materialized within Globus’ two reporting segments in fiscal 2023. Musculoskeletal Solutions sales shot up 56.2% to $1.44 billion, and Enabling Technologies revenue swelled 25% to $120.2 million.

Among those momentum-producing product launches was the MARVEL Growing Rod and Precice Bone Transport systems.

Released in July 2023, the MARVEL Growing Rod corrects early onset pediatric scoliosis and maintains correction while allowing for growth through minimally invasive distraction. The product’s growing rods feature a geared mechanism that provide efficient lengthening through a large 40 mm or 60 mm expansion range, with PEEK polymer bearing surfaces to minimize wear. The lengthening of each rod is achieved via a minimally invasive procedure with a small incision for driver access to minimize soft tissue disruption.

“The need to balance curve correction with growth in patients with early onset scoliosis makes it one of the most challenging conditions facing pediatric spine surgeons,” orthopedic surgeon Shyam Kisham, M.D., medical director at Medical City Children’s Hospital Orthopedics & Spine in Dallas, Texas, said when the MARVEL rod made its market debut. “MARVEL’s design allows for reliable distraction for continued spinal growth while minimizing impact to the patient.”

The MARVEL rod’s market release occurred just two months after Globus augmented its scoliosis solutions portfolio with the U.S. Food and Drug Administration approval of its REFLECT Scoliosis Correction System.

Reportedly the company’s first humanitarian device, REFLECT is designed to correct progressive scoliosis in young patients while preserving motion, maintaining stability, and allowing for future modulated growth.

Unlike rigid metal rods for fusion, REFLECT uses a flexible, durable cord to harness the power of innate patient growth for correction. The flexible cord is tensioned on the convex side to control the curve while allowing growth on the concave side. The implants may be inserted using a minimally invasive approach through a few small incisions between the ribs.

The REFLECT System is indicated for skeletally immature patients who need surgery to correct and maintain control of their progressive idiopathic scoliosis, who have Cobb angles ranging from 30 degrees to 65 degrees whose osseous structure is dimensionally adequate to accommodate screw fixation, as determined by radiographic imaging. Patients also should have failed bracing and/or are intolerant to brace wear.

Four months after the REFLECT System’s approval, Globus debuted the Precice Bone Transport system in targeted regions. An innovation from NuVasive Specialized Orthopedics, the less invasive solution was created in partnership with limb reconstruction surgeons worldwide. Its magnetic adjustable technology uses an external remote to non-invasively lengthen implants.

Precice has been implanted by more than 2,000 surgeons, 15,000 times, in roughly 45 countries.

Globus spent the final quarter of 2023 extolling the technological virtues of its new mate, first celebrating the 20-year anniversary of NuVasive’s XLIF procedure at the Society for Minimally Invasive Spine Surgery’s 2023 Annual Forum in early October. Then, two weeks later, the company shared promising results from the NuVasive Simplify Cervical Disc study at the North American Spine Society Annual Meeting in Los Angeles. The study demonstrated positive, long-term clinical outcomes, a high rate of overall composite success at five years, and statistical superiority to anterior cervical discectomy fusion procedural outcomes.

“I am eager to witness the continued success of these results beyond the 60-month mark,” Pierce D. Nunley, M.D., of the Spine Institute of Louisiana, said when the study results were released. “This study further reinforces that Simplify is an outstanding motion-preserving solution with enduring clinical advantages over ACDF.”

$1.02 Billion
Prior Fiscal: $958.1 Million
Percentage Change: +6.67%
R&D Expenditure: $73M
Best FY22 Quarter: Q4 $274.5M
Latest Quarter: Q1 $276.7M
No. of Employees: 2,600

So the rumor was true, after all.

Nearly two years ago, Reuters reported that Globus Medical Inc. and NuVasive Inc. were surreptitiously exploring a merger deal. Citing “people familiar with the matter,” the worldwide news agency claimed Globus approached its rival with an “indicative cash-and-stock offer,” but noted the deal was far from certain.

“The discussions between the companies are preliminary and there is no certainty a deal will be reached,” Reuters reported.

Not surprisingly, neither company commented on the rumor—which in retrospect, should have been a tipoff about its possible veracity.

It should have, but without official verification, Reuters abandoned the story to cover more urgent global issues like runaway inflation, migrant emigration, COVID-19 vaccine boosters, and climate change-induced calamities.

The rumored merger was quickly forgotten.

Even though the “rumor” was true.

Indeed, Reuters was spot-on with its reporting—Globus had indeed propositioned its rival about merging, though the Reuters story was a bit fuzzy on the timing.

The first merger meeting between the two firms occurred in late September 2021—more than seven weeks before Reuters leaked word of it on Nov. 15, according to a proxy statement filed in March (2023) with the U.S. Securities and Exchange Commission (SEC). Only the board chairmen and CEOs of Globus and NuVasive attended that first meeting.

The two companies continued meeting over the next month and a half but abruptly ended discussions when Reuters publicly disclosed the negotiations. “On or about Nov. 15, 2021, there were reports in the media that NuVasive and Globus were considering a potential transaction,” the proxy statement reads. “These reports led to stock price volatility, as well as disruption impacting the companies’ respective employees and other stakeholders. Given the very early stages of discussions…and the fact that no diligence information had yet been shared, Globus and NuVasive agreed that engaging in more substantive interactions would lead to further unwanted disruption. Therefore, the parties decided to cease further discussions with respect to a potential transaction…”

Despite tabling the merger talks, however, the two companies maintained open communications over the next year, occasionally discussing industry trends, developments, and consolidation.

Merger dialogue resumed last fall, but negotiations stalled amid an exclusivity clause, the macroeconomic environment, and stock price volatility. The latter factor actually ended discussions (briefly), as the gap between the two companies’ common stock price widened considerably. The proxy statement indicates Globus’ share price rose 7.3% from Nov. 1 to Nov. 15, 2022, while NuVasive’s fell 16.6% during that same time.

The companies continued to work out details of the merger in late 2022 and early 2023 before announcing the $3.1 billion all-stock deal in February. The merger—unanimously approved by both companies’ boards (despite analyst and investor skepticism)—creates the second-largest spine market player behind Medtronic. The Federal Trade Commission (FTC), however, reputedly is mulling a potential lawsuit to challenge the deal, according to media reports.

The acquisition—if allowed by the FTC—is expected to deliver a mid-30% EBITDA profile to the combined entity over the next three years, including approximately $170 million in identified cost synergies. Strategically, the newly-blended firm will gain an advanced commercial scale and solutions portfolio, and be supported by strong commercial and clinical professional development teams, leading to better customer service.

Moreover, the complementary nature of Globus’ and NuVasive’s products, customers, and geographic footprint will thus serve more surgeons with varied solutions, creating more long-term growth opportunities, industry analysts observe.

“Looking at where we compete, and when we really dug, not even just at the customer level, at the surgeon level, what you see is it’s a very complementary geographic dispersion of where our portfolio plays,” NuVasive CEO/Director J. Christopher Barry said during a Feb. 9 investor conference call detailing the merger. “Spine is not made up of two companies. It’s several companies. We compete in several different fronts. And it’s just the natural evolution of these two companies [which] have produced technologies that naturally are complementary, and that’s played well on geographic dispersion. That’s not just a U.S. phenomenon. It’s actually a global phenomenon. So we’re excited about the very…minimal overlap and the complementary nature of the portfolio, and…those meaningful cross-selling opportunities as we look forward.”

The minimal overlap and complementary portfolio ultimately will help minimize disruption to surgeons, Globus President, CEO, and Director Daniel T. Scavilla noted.

“We have a highly complementary commercial footprint in the U.S. and international markets with minor overlaps. This will allow us to focus on our surgeons without disruption,” he declared on the conference call. “Combining our product portfolios will create the best-in-class offering to our surgeons in spine and trauma. Bringing together two highly innovative product development teams will create focus and impact on future offerings. The operational footprint fits perfectly with our expansion needs. The Globus financial discipline and NuVasive drive for growth will create strong results in sales, EPS, and cash flow to benefit our shareholders.”

“Importantly, this transaction will position Globus to capitalize on multiple high-growth levers in the $50 billion musculoskeletal market,” Scavilla continued. “This includes joint arthroplasty, trauma, enabling technologies, and power tools. With expanded commercial reach as a combined company, we see significant opportunities to further penetrate existing and future markets and continue each company’s track record of above-market net sales growth.”

That above-market growth enabled Globus to cross the $1 billion net sales threshold in 2022, its 20th anniversary year. The company marked the occasion with a flawless fiscal performance, posting gains in all product reporting categories and geographic areas, and throughout its consolidated financial statement.

U.S. sales, for example, climbed 6.4% to $871.9 million in fiscal 2022, while international proceeds swelled 8.9% to $150.9 million, Globus’ latest annual report indicates. Musculoskeletal Solutions revenue, meanwhile, rose 5.7% to $926.7 million, and Enabling Technologies ballooned 18.2% to $96.1 million.

Total company sales expanded 6.8% to $1.02 billion, fueled by a 5.6% boost in gross profit (from $718.8 million to $759.1 million), a 32.6% spike in operating income (from $171.9 million to $227.9 million), 27.5% growth in net income (from $149.1 million to $190.1 million), and a 27.7% jump in basic earnings per share (from $1.48 to $1.89).

“Globus Medical was founded 20 years ago with a small group of talented engineers who had a vision of improving care for patients with musculoskeletal disease,” said Scavilla, who replaced Dave Demski in the corner office in April 2022. Scavilla began working for Globus in 2015 as chief financial officer (CFO) after having spent 28 years with Johnson & Johnson, holding various positions in Finance, including CFO of Vision Care. In 2019, he was promoted at Globus to executive vice president, Chief Commercial Officer, and in 2020 became president of Trauma.

“The journey from startup to $1 billion in sales is certainly worthy of note and particularly so at this milestone anniversary of the company’s founding,” Scavilla noted. “Our future continues to look bright as we improve the lives of patients, surgeons, employees, and shareholders by working to further achieve our vision.”

Indeed, Globus’ future looks bright, thanks in part to its blockbuster NuVasive purchase and solid demand for its spinal products, the latter of which helped the company hit the $1 billion sales mark. Globus also is securing its future through autologous biologics capabilities—gained from the Q4 2022 membership interest purchase of Harvest Biologics LLC ($30.1 million)—and the firm’s Excelsius technology, used to improve spinal surgery accuracy.

The latest update to this platform made its clinical debut last spring at Northwest Specialty Hospital in Post Falls, Idaho; MedStar Union Memorial Hospital in Baltimore; and NYU Langone Health in New York, N.Y. Surgeons at each facility performed the first procedures with Excelsius3D, an advanced intraoperative three-in-one imaging platform designed for 2D fluoroscopy, 2D digital radiography, and 3D imaging of adult and pediatric patients.

Excelsius3D combined with ExcelsiusGPS offers an intraoperative, image-guided robotic navigation solution for improving implant placement accuracy, lowering radiation exposure, and reducing procedure times.

“With these two technologies, we are able to efficiently perform surgery with minimally invasive techniques,” Paul C. McAfee, M.D., an orthopedic spine surgeon at MedStar Union Memorial, said after using Excelsius3D for the first time. “The seamless interface between the two platforms allows us to provide leading-edge technology to patients.

“The addition of Excelsius3D to our operating room has helped to streamline our navigation workflow with ExcelsiusGPS,” Jeffrey A. Goldstein, M.D., (NYU Langone), stated in a news release. “The intraoperative imaging technology enables us to efficiently visualize anatomy, offers three imaging modes in a single comprehensive system, and is easy for our radiology technicians to maneuver and position. We’re excited about this new tool to help us provide patients with the best possible care.”

$958 Million
Prior Fiscal: $789 Million
Percentage Change: +21.4%
R&D Expenditure: $97.3M
Best FY21 Quarter: Q2 $251M
Latest Quarter: Q1 $231M
No. of Employees: 2,400

In October, Globus Medical filed a lawsuit in Delaware against Life Spine, alleging the company infringed on seven different Globus expandable interbody spacer technology patents. The action involved a number of products manufactured by Life Spine, as well as marketed by them and other companies.

“We’ve invested tremendous effort and millions of dollars in research and development to create innovative technology to improve the lives of patients, generating over 256 patents related to expandable interbody implants alone,” then-CEO Dave Demski told the press. “Our intellectual property is a critical component in making such advancements possible, and we are committed to protecting our proprietary technology against companies that benefit from making and distributing infringing devices.”

Life Spine responded to the allegations a few days later, with CEO Michael Butler claiming they would “vigorously fight” the allegations. Life Spine called the suit a “meritless patent lawsuit” and an effort to slow Life Spine’s growth. Nothing new has come to light since the announcement in October.

Globus was one of the few ortho-focused companies that grew its revenue in 2020—though minimally—and the company posted substantial gains to keep growing in its 2021 fiscal. The company captured $958.1 million of revenue last year, rising 21.4% over the year prior.

Domestic revenue grew 23.3% to reach $819.5 million last year. The company noted increased spine product sales here resulting from penetration in existing territories, as well as a higher sales volume of enabling technologies. U.S. sales make up most of Globus’ income—international sales, however, also grew. International revenue rose 11.2%, coming to rest at $138.5 million. The same market trends affecting the U.S. were at play here last year.

Musculoskeletal Solutions proceeds rose 17.1% to accrue $876.7 million in the company’s 2021 fiscal.

The CREO ONE robotic screw hit the market last April. Designed for spine surgery with ExcelsiusGPS robotic navigation, it simplifies pedicle preparation and touts increased pullout strength of 86% compared to traditional pedicle screws, according to Globus.

“The screw completely eliminates the need to tap and simply requires a starting, pilot hole to break the cortex prior to placing the vertebral pedicle screw, further streamlining the operative workflow while increasing screw pullout strength,” said Dr. Frank La Marca, neurosurgeon in Jackson, Mich. “The awl-style tip helps the screw follow a pre-planned trajectory and gives me the confidence of maintained navigational accuracy without performing traditional pedicle preparation.”

October’s Orthopaedic Trauma Association meeting saw the premiere of the ANTHEM mini fragment fracture system. Designed for fixation of small bones and non-load-bearing stabilization of long bones, it features both titanium and stainless steel implants with eight plate styles, including K-plates and mesh plates in many sizes. The plates accommodate a variety of anatomies and fracture patterns, and have 30o polyaxial locking. They’re also compatible with locking, non-locking, and self-drilling speed screws for quick unicortical fixation.

Enabling Technologies contributed $81.3 million to the company’s wallet. Revenue from this segment almost exactly doubled from 2020 to 2021, growing an impressive 100.1%.

The company’s Excelsius3D 3-in-1 imaging system was granted U.S. Food and Drug Administration (FDA) 510(k) clearance last August. It consolidates 360° cone-beam CT, fluoroscopy, and high-resolution digital radiography into one system. Excelsius3D does not have a separate viewing station—the standalone imaging unit has a more compact footprint than its predecessors. The system is indicated for use where a physician benefits from 2D and 3D information on anatomic structures and high contrast objects with high x-ray attenuation such as bony anatomy and metallic objects. It was commercially released in the fourth quarter of last year.

The ExcelsiusGPS robotic navigation system achieved a couple of milestones last year. The first came in July, when Globus marked over 20,000 spine procedures performed using the robotic platform. The second came in September, when the system accomplished its first ever robot-assisted, navigated deep brain stimulation (DBS). Cranial Solutions was the latest evolution of the system, transforming it into a two-in-one application system.

“This platform has been designed by surgeons in collaboration with engineers,” Dr. Francisco Ponce of Barrow Neurological Institute, who was the surgeon to perform the procedure, said to the press. “It is very intuitive and eliminates the need for the standard arc and frame in the procedure which significantly improves OR efficiency and removes one aspect of potential human error from the procedure.”

During the company’s Q3 earnings call, then-CEO Dave Demski revealed the acquisition of Michigan-based Capstone Surgical Technologies. Capstone added to Globus, portfolio—for a price tag of $24.5 million—a patented surgical drill with oscillating technology to accomplish bone removal, disk removal, and screw insertion for minimally invasive spine surgery. Demski said Globus plans to incorporate the safe, efficient tissue removal capability into the company’s robotic platforms in the future.

In the fourth quarter of 2021, Globus also acquired an undisclosed company for $10 million that develops technology for robotic surgery platforms. This purchase wasn’t considered material to last year’s consolidated financial statements.

There was a brief hullabaloo in November when both Bloomberg and Reuters reported that Globus approached fellow spine tech maker NuVasive with an acquisition offer, according to “people familiar with the matter.” The anonymous sources said Globus made an indicative cash-and-stock offer for NuVasive in the weeks prior to the report. If the deal takes place, it would create one of the largest players in the spine market with 17% market share, according to Truist analysts Samuel Brodovsky and David Rescott.

However, the Truist analysts also though the deal unlikely at the time because Globus has a track record of bolt-on deals and growing organically. “We think that large orthopedic integrations can be messy, and a potential large integration could significantly disrupt this strategy,” Brodovsky and Rescott said.

Nearly five-year Globus CEO Dave Demski also announced he was parting ways with the firm this past April. He’s served the company in various roles since its 2003 founding, including CFO from 2003-2008, president and COO from 2008-2015, and president of emerging technologies until he began leading the company in 2017.

“It has been a privilege to be part of the executive leadership of Globus Medical since its inception, working with talented and dedicated team members for almost two decades to improve the lives of patients,” said Demski. “This departure allows me to pursue other opportunities with the confidence that I am leaving Globus in good hands and well positioned for the future.”

Daniel Scavilla, who was the company’s executive VP, chief commercial officer, and president of Trauma was elevated to the CEO position as a result.

$789 Million
Prior Fiscal: $785 Million
Percentage Change: +0.5%
No. of Employees: 2,200

For many medical device companies, especially those that provided products used in elective surgeries, Q2 2020 was going to represent a revenue shortfall. This fact was especially true of many companies on the ODT Top Companies list, as much of their focus is on the orthopedic industry. As most orthopedic procedures are considered elective surgeries, the pause was especially damaging to the bottom line of those firms.

With this in mind, it was especially surprising to see shares of Globus Medical increasing by almost 14 percent in early August after the company provided its second-quarter results. As expected, the organization saw a loss during the three-month period (down 23.4 percent year over year for that quarter). However, in a statement put out by the company regarding its Q2 results, the CEO for Globus Medical, Dave Demski, explained the losses as “an exceptional result when compared to our peers within the industry.”

“We are highly encouraged by the rebound in spine procedures in the U.S.,” Demski went on to explain. “The spine business in the U.S. bottomed in mid-April, but rebounded to produce double digit growth in June, which has accelerated into the mid-teens growth in July. Interest in robotic technology has remained high and we were able to close several deals in June and July. We are excited about the second half of 2020: Globus is poised for robust growth if the recent trends continue; and, if we do experience further disruption, our lean organization structure and strong liquidity will position us to weather the storm effectively.”

By the time Globus put out its 2020 annual report, which provided insights on the overall impact the pandemic had on the firm, Demski’s words rang true. The organization finished with a modest 0.5 percent increase year over year compared to its 2019 fiscal. That was reflected in growth from $785 million in 2019 to $789 million in 2020.

Globus Medical reports on two product segments—Musculoskeletal Solutions and Enabling Technologies. Musculoskeletal Solutions, which consist primarily of implantable devices, biologics, accessories, and unique surgical instruments used in an expansive range of spinal, orthopedic and neurosurgical procedures, is the primary source for Globus Medical’s revenue. It reported $748 million in 2020, which was up from 2019’s $738 million.

The Enabling Technologies segment is comprised of imaging, navigation, and robotics solutions for assisted surgery. The division is substantially smaller as a source of revenue for Globus Medical. In 2020, the segment contributed $40.6 million, which was a decrease from the previous year’s tally of $47 million.

Sales region had a similar disparity, but not as dramatic. The majority of Globus Medical sales occur within the U.S., which represented $664 million of the firm’s revenue in 2020. That was a 2.6 percent gain over the 2019 fiscal, which saw the figure at $648 million. Internationally, sales followed the overall industry trend for orthopedics, posting sales of $125 million in 2020, which represented 9.5 percent shrinkage when compared to 2019’s $138 million.

In addition to its promises kept regarding the recovery from pandemic losses, Globus Medical also moved forward with efforts to spur future growth. This was accomplished in a number of ways. One method saw the organization awarded a group purchasing agreement with Premier—one of the largest group purchasing organizations in the U.S.—for a number of its trauma products. The agreement specifically included the company’s ANTHEM Plating, AUTOBAHN Nailing, ARBOR External Fixation, and CAPTIVATE Screw Platforms.

The firm also announced continued advancements with its ExcelsiusGPS robotic surgical solution in November 2020.

Dr. Sheeraz Qureshi (Hospital for Special Surgery, New York, N.Y.) and Dr. Paul Park (University of Michigan, Ann Arbor, Mich.) were the first surgeons to utilize the ExcelsiusGPS Interbody Solutions module. Dr. Qureshi performed a robotic navigated transforaminal lumbar interbody (TLIF) fusion and Dr. Park executed a robotic navigated single position lateral interbody fusion procedure, both using the ExcelsiusGPS robotic navigation system.

Dr. Park remarked, “The advanced planning and ability of the robot to impact surgery beyond screw placement makes Interbody Solutions the next step forward in the evolution of robotic spinal surgery.”

“I am very excited for the newest evolution of the ExcelsiusGPS platform,” said Dr. Qureshi. “This update provides advanced solutions for interbody placement using a robotic navigation platform that do not currently exist.”

In other clinical news, Globus Medical announced Dr. Joshua S. Rovner became the first spine surgeon to implant.

HEDRON IA, a 3D printed integrated ALIF spacer that leverages anchors or screws for vertebral body fixation. The minimally invasive outpatient procedure was performed at Englewood Health, one of New Jersey’s leading hospitals and healthcare networks.

“Offering my patients the benefits of smaller incisions and less exposure to potential complications is why I specialize in minimally invasive surgery,” said Dr. Rovner. “For the ALIF procedure, I require an implant that’s easy to insert yet provides a sturdy construct. HEDRON delivered with the additional benefit of endplate-to-endplate porosity to promote fusion.”

HEDRON spacers feature a biomimetic porous scaffold designed to promote bone formation onto and through the implant. Unlike first generation 3D printed implants, HEDRON strikes the optimal balance of strength and porosity through a sturdy frame and a pore size distribution similar to trabecular bone.

To support its future growth for innovative products similar to the two first used in 2020, the company announced an expansion of its manufacturing operations to Montgomery County in Pennsylvania. Gov. Tom Wolf made the announcement in September 2020 when he explained the expansion would result in more than 240 jobs.

“Globus Medical has an established presence in our state and has worked with the commonwealth for years in their growth and expansion—starting with only four employees in 2003,” said Gov. Wolf. “With this manufacturing operation expansion, their workforce will grow substantially, and will build upon their continued commitment to bringing new jobs and opportunities to southeast Pennsylvania.”

Globus Medical also acquired Synoste, a company that produced implants for minimally invasive bone lengthening treatments. Leg length discrepancy can lead to chronic back pain and osteoarthritis in the long term. Using Synoste’s technology, the bone of the shorter leg is lengthened in a gentle way over a period of several months. The deal was for $23.5 million and completed through the firm’s subsidiary, Globus Medical Ireland Ltd.

$785.4 Million
Prior Fiscal: $713 Million
Percentage Change: +10.2%
No. of Employees: 2,000

For years, Chuck Scott and Greg Brown suffered in solitude, each unaware the other existed.

The two were neither friends nor relatives yet they led strikingly parallel lives, their paths conjoining in a tangle of physical torment.

They are similar yet different: Well past middle-aged, one is clean-shaven and balding, the other is bearded, bushy-haired, and bespectacled.

They are different yet similar: One is older and slimmer, the other younger and huskier. Back pain loomed large in their lives.

Not surprisingly, the pain itself was similar yet different: Affecting the lower back, it waxed and waned for one but regularly throbbed for the other.

The treatment, accordingly, was different yet similar: Injections for one, narcotics/surgeries for the other. All were unsuccessful.

Then came the robot.

Desperate to escape their collective misery, Scott and Brown turned to ExcelsiusGPS, a robotic-assisted platform that integrates navigation with real-time feedback, disc preparation, and implant insertion. Developed by Audubon, Pa.-based Globus Medical Inc., the system can tackle complex cases from a single lateral position with better accuracy, surgical efficiency, and reduced radiation exposure.

“It allows us to improve our accuracy with our instrumentation placement,” Joshua Bunch, M.D., said last fall in a University of Kansas Health System blog. “It allows us to decrease our operative times, decrease the blood loss for a given patient, hopefully speed their time, their intraoperative stay in the hospital, and also decrease the radiation they receive for a given case.”

ExcelsiusGPS debuted in late 2017, the same year it was sanctioned by U.S. and European regulators. Globus Medical intentionally designed the platform to address the limitations of previously released robotic systems, namely inaccurate navigation, tactile feedback loss, and increased operative time.

The ExcelsiusGPS features a rigid external arm for direct transpedicular drilling and screw placement (no K-wires needed). The platform also has a surveillance marker to quickly detect registration loss and a lateral force meter to identify skiving.

Globus’ robotic navigation platform gained market traction relatively quickly, accruing 3,000 pedicle screw implantations within seven months of its release. But clinical evidence was scant until the company shared study results last spring showing the efficiency of its robotic navigation over traditional screw placement techniques.

Published in the Journal of Robotic Surgery, the trial evaluated ExcelsiusGPS’s surgical technique, which combines three imaging workflows—preoperative CT, intraoperative CT, and fluoroscopy—with navigation and guidance to place pedicle screws using real-time feedback. The data revealed a 99 percent screw placement success rate, with no malposition or post-operative complications.

Five hundred sixty-two lumbar pedicle screws were placed across six vertebral levels during 55 single-position lateral, 16 anterior, and 29 posterior interbody fusions. Interbody placement was performed manually.

“This study highlights the system’s capability to transform the way lateral surgery is performed. ExcelsiusGPS enables surgeons to perform minimally invasive screw fixation with the patient remaining in the lateral position, compared to traditional lateral approaches where the patient is intraoperatively repositioned prone,” Kade T. Huntsman, M.D., a Salt Lake City spine surgeon, said upon release of the results. “Eliminating patient repositioning may lead to increased operational efficiency, cost savings, and improved patient outcomes.”

Those improved outcomes may be reciprocal, too: Globus Medical experienced its third consecutive year of double-digit growth in 2019, and its ExcelsiusGPS is largely responsible for the uptick.

“We continue to see robust adoption trends by surgeons who are experiencing the benefits of ExcelsiusGPS technology as they incorporate [it] into their practices,” Globus Medical President and CEO David M. Demski told analysts during a fourth-quarter and full-year 2019 earnings call. “…our innovative technologies have gained traction as a result of increased investments in surgeon education and we are seeing strong implant pull through from ExcelsiusGPS installations. We are well-positioned for continued strong growth internationally.”

That growth surged 15.6 percent last year, pushing Globus Medical’s international sales total to $137.7 million. The increase was driven primarily by higher sales in Japan and “other countries” (the company was not more specific), as well as strong demand for INR (imaging, navigation, and robotic-assisted surgery) technology. On a constant currency basis, international revenue expanded by $20.9 million, or 17.6 percent.

Worldwide sales jumped 10.1 percent to $712.9 million, with the bulk of the revenue beget domestically, as strong spine product sales bolstered U.S. proceeds 9 percent to $593.8 million. Gross profit ballooned 9.4 percent to $605.4 million, and operating income climbed 1.6 percent to $171.9 million, according to Globus Medical’s 2019 annual report.

Musculoskeletal Solutions revenue grew 11 percent in fiscal 2019, and the company’s spine business captured significant market share during the final quarter due to competitive sales rep recruiting and implant pull-through from ExcelsiusGPS installations.

Much of spine’s growth, however, also can be attributed to the bevy of new products launched in 2019. Last spring, Globus Medical debuted both a variable angle corpectomy solution and an expandable interspinous fixation system.

The FORTIFY VA expandable corpectomy spacer optimizes anatomical fit using either an anterior cervical approach or one of several thoracolumbar spine approaches. The device provides up to 16 degrees of angulation as it expands to self-align its variable angle endplate with a patient’s anatomy—a feature that is missing in most traditional corpectomy products.

“Endplate selection is an important factor in restoring sagittal and coronal spinal alignment and providing construct stability,” Mike Chen, M.D., a California neurosurgeon who performed the first FORTIFY VA procedure, said upon the product’s April 2019 launch. “FORTIFY VA removes the guesswork in choosing an ideal lordotic or kyphotic implant. The ability to provide a customizable implant in fewer steps that is designed to restore height and automatically adjust the endplate to the interfacing vertebra is a significant advancement in expandable corpectomy technology.”

Like the FORTIFY VA device, Globus Medical’s AERIAL system is designed for customization. The minimally invasive product features an expandable central core that provides continuous distraction for indirect decompression and a customized patient fit. AERIAL’s easy insertion and controlled expansion provides a simple MIS solution for interspinous fixation. Its independent locking plates help adapt to varying patient anatomies by optimizing spine engagement into each spinous process separately.

“It is an improvement over traditional spinous process devices because AERIAL expands to fit the interspinous space of the patient’s spine,” orthopedic surgeon David Bomback, M.D., said when the device debuted. He and Sumit Das, M.D., performed the first AERIAL procedures at Danbury Hospital in Danbury, Conn. “We now have the opportunity to help more patients, especially those with spinal instability from previous procedures, scoliosis, or who have poor bone quality due to age.”

Other additions to Globus Medical’s spine portfolio last year included the CREO NXT Stabilization System, SI-LOK Select Sacroiliac Joint Fixation, and the HEDRON line of 3D printed interbody spacers. The latter entrant, comprising the HEDRON IC (a cervical integrated plate and spacer system) and HEDRON IA (a lumbar integrated plate and spacer system) was released in the fourth quarter.

HEDRON spacers feature a biomimetic porous scaffold designed to promote bone formation onto and through the implant. Unlike first-generation 3D printed implants, the HEDRON portfolio balances strength and porosity through a sturdy frame and pore size distribution similar to trabecular bone.

The spine business, however, was not the only prolific innovator last year. Globus Medical also bolstered its Trauma offering, launching six new solutions, including the AUTOBAHN Nailing System. The platform of tibia and femur fracture treatments is comprised of the Intramedullary Trochanteric Nail, Antegrade/Retrograde Femoral Nail, and Tibial Nail; the lineup itself complements the company’s ANTHEM Plating and ARBOR External Fixation Systems.

The AUTOBAHN Trochanteric Nailing System treats trochanteric and femoral neck fractures via three different neck-shaft angles to accommodate various femoral neck anatomy. Streamlined instruments feature dedicated radiolucent aiming guides and unique fracture reduction forceps offer system efficiency and provide improved visualization of the femoral head. Radiographic markers embedded in the targeting arm allow nail anteversion alignment for optimal placement.

The AUTOBAHN Antegrade/Retrograde Femoral Nailing System enables greater trochanter or piriformis fossa surgical entry points. With the incorporation of reconstruction holes and transverse options, this nail was designed for more fracture patterns than others on the market, according to Globus Medical. The A/R nailing system provides fixation for common femoral shaft fractures as well as the benefit of reconstruction holes and reverse obliquity holes for fractures requiring more comprehensive fixation.

The AUTOBAHN Tibial Nailing System includes instruments for both the classic infrapatellar approach and the increasingly popular suprapatellar approach. The system features headless locking screws designed to decrease soft tissue irritation. SureStart threaded fixation is incorporated into the nail to facilitate extreme nailing for stable fracture fixation. Instruments including the one-piece Suprapatellar Cannula reduce the amount of procedural steps.

In an effort to diversify its offerings beyond spine, Globus Medical acquired StelKast last summer for $24.1 million (the price, however, could increase by $4.3 million if certain product and sales milestones are met, including a robot-assisted system for joint reconstruction that is expected to launch later this year). In purchasing the total joint arthroplasty systems manufacturer, Globus Medical affirmed its intent to expand its reach into the TJA market.

“The StelKast acquisition should serve as a platform to expand our products and services into the total joint arthroplasty market,” David Paul, executive chairman, said in a news release. “Globus Medical’s product development engine and history of innovation, when combined with our computer assisted technologies in Imaging, Navigation and Robotics, have the potential to improve clinical care for joint arthroplasty patients and create value for shareholders.”

AT A GLANCE
$713 Million
Prior Fiscal: $636 Million
Percentage Change: +12.1%
No. of Employees: 1,800

Globus Medical’s ExcelsiusGPS is a lesser-known surgical robot but is undoubtedly significant—at launch, it was the only robotic system combining surgical navigation and robotic guidance for spinal surgery. It supports both minimally invasive (MIS) and open screw placement procedures, seamlessly integrating Globus implants and instruments. ExcelsiusGPS is compatible with CT, intra-operative CT, and fluoroscopic imaging, and minimizes radiation exposure, streamlines workflow, and reproducibly assists in implant placement.

The first procedures using ExcelsiusGPS—performed at The Johns Hopkins Hospital in Baltimore, Md., and St. Mark’s Hospital in Salt Lake City, Utah—took place in October 2017. Last June, Globus recorded its 3,000th successful screw implantation using the system for a variety of spine procedures.

“Having completed installations and surgeon training programs through the first half of 2018, we see surgeons using this technology in open and minimally invasive spine procedures including posterior cervical fusion, sacroiliac joint fusion, and thoracolumbar fusion with posterior and single position lateral approaches,” Globus CEO Dave Demski told the press.

Globus made its purchase of Nemaris Inc., developer of the Surgimap surgical software platform, with ExcelsiusGPS in mind last September. Surgimap lets users plan and simulate potential surgical outcomes in the course of treating complex deformities through a cloud-based infrastructure with predictive algorithms and visual guides. Healthcare professionals can also share medical imaging globally. Using the software platform in tandem with ExcelsiusGPS both streamlines workflow and enables superior data analytics during spine surgery.

“Software-enhanced solutions are critical components of the future of computer-assisted surgery, and Surgimap is the leading surgical planning software technology in the spine market today,” Demski told the press. “We are very excited about the strategic fit of this acquisition, which will allow us to further enhance the capability of our ExcelsiusGPS navigation and robotic system to assist surgeons in planning complex spine procedures and placing screws more accurately and less invasively.”

ExcelsiusGPS first crossed the Atlantic last December for a procedure at the Metropolitan Hospital in Neo Faliro, Athens, Greece. System installations were also completed in several European countries, including Italy and Germany. The computer-assisted surgical system is a significant portion of Globus’ enabling technologies franchise, which is comprised of imaging, navigation, and robotic-assisted surgery solutions. The segment garnered $47 million in sales last year, skyrocketing 330 percent over the prior year due to ExcelsiusGPS’ U.S. launch in the fourth quarter of 2017.

This figure is a small but significant portion of Globus’ total revenue, which swelled 12.1 percent last year to $713 million. Increased spine product sales were the primary driver for the $64 million sales hike. Penetration in existing territories, navigation and robotic surgery solutions proceeds, and associated implant and robotic instrument sales helped reinforce spine revenue. Globus drew $594 million of its revenue from U.S. sales and $119 million from international; earnings from those regions rose 12.1 percent and 12.2 percent respectively.

Globus’ musculoskeletal solutions business is comprised of implantable devices, biologics, accessories, and surgical instruments used in spinal, orthopedic, and neurosurgical procedures. The segment generated a $666 million payoff, growing 6.5 percent over the prior year.

Globus proclaimed its entry into the orthopedic trauma market by showcasing 11 recently FDA-cleared products at the American Association of Orthopaedic Surgeons’ annual meeting. These include fracture plates, compression screws, cannulated screws, intramedullary nails, and external fixation solutions. The portfolio can treat a wide variety of fracture patterns, and accommodates anatomies in the upper and lower extremities as well as hip and long bones.

“It has been impressive watching Globus move from design to development to deployment of their trauma solutions line,” Dr. Andrew N. Pollak, Chief of Orthopaedics at the University of Maryland Medical System, told the press. “I have been very impressed with the ability of Globus’ engineers to translate surgeon ideas and concepts into functional and easy-to- use implants for a wide variety of fracture patterns.”

Globus introduced two lateral expandable interbody spacers with integrated screw fixation—ELSA AL and ELSA-ATP—last April. ELSA AL improves sagittal balance and improves stability with adjustable lordotic technology that allows up to 30 degrees of lordosis while maintaining an MIS corridor. It also exhibits less disruption compared to static spacers, according to the company.

The ELSA-ATP expandable spacer utilizes a modified lateral lumbar interbody fusion (LLIF) procedure called anterior-to-psoas for placement. The tweaked LLIF approach is used to avoid the psoas, a large muscle responsible for leg movement and flexion; avoiding this muscle and its integrated nerves can help reduce post-op complications like thigh pain. ELSA-ATP’s angled integrated screws provide direct fixation to adjacent vertebrae. The spacer can be inserted at a minimal height and expanded in-situ to minimize tissue disruption and maximize indirect compression.

Last June saw the launch of the CREO fenestrated screw system, which is used to help treat advanced-stage thoracolumbar spinal tumors. The fenestrated screws can be combined with the firm’s FORTRESS radiopaque bone cement to restore the spine’s structural integrity at vertebral levels impacted by metastatic bone disease. CREO fenestrated screws are available with threaded, non-threaded, and MIS screw head options to accommodate surgeon preferences, and are cannulated with a series of fenestrations along the shank for targeted cement dispersion. They also rigidly attach to specialized instruments for controlled cement delivery.

Globus added two new products to its growing trauma portfolio last July. The ANTHEM ankle fracture system offers seven plating options to treat virtually any ankle fracture, and according to the company, is over 25 percent thinner than the market leader’s plate. ANTHEM’s low-profile plates help minimize soft tissue irritation from implant prominence. The efficient and comprehensive system rolls anatomically contoured plates, extensive screw options, and ankle-specific instrumentation into one.

The ANTHEM proximal humerus fracture system to treat shoulder fractures touts polyaxial screw technology, which permits more accurate dense calcar bone targeting to enhance fixation independent of plate position. Large suture holes simplify suture attachment for soft tissue or rotator cuff repair. Small fragment instruments and retractors help streamline the procedure and aid in fracture site visibility.

Last Halloween, the Globus subsidiary Human Biologics of Texas (HBT), which produces the company’s ViaCell allograft, received an FDA warning letter concerning issues found during a facility inspection last April. In the review, FDA inspectors cited failures to document and investigate ViaCell production deviations, as well as trends of any variations away from core current good tissue practice requirements. HBT responded by enacting additional validation activities last May, but the FDA took issue with the company’s reliance on sterility testing and possible contamination during processing.

The FDA also slammed HBT for not excluding or discarding samples from donors positive for Clostridium, Streptococcus pyogenes, or “any other microorganism that you have determined to be difficult to eliminate, unless you have a terminal sterilization process validated to a sterility assurance level of 10-6.” Finally, the agency referenced a lack of positive results from all environmental and personnel monitoring sample testing, claiming it was “highly unusual, especially when your sterility failure rates were so high.” The FDA gave HBT 15 days to respond to the issues. (No further information has come to light regarding HBT at this time.)

$636 Million
NUMBER OF EMPLOYEES: 1,500

In 2000, Intuitive Surgical brought robotic-assisted surgery into the limelight with the market release of its da Vinci Surgical System. Since then, others have tried to catch up to the definitive leader in the space. Titan Medical, Verb Surgical, and TransEnterix are just a few of the companies developing similar systems or who have already launched alternatives into the market. Focusing on orthopedics, Stryker’s Mako, Smith and Nephew’s NAVIO, and the Medtronic-backed Mazor X from Mazor Robotics are where a majority of the attention is focused within the space, although other providers are rapidly introducing their own solutions. Last year, Globus Medical added to that group of orthopedic-focused robotic surgery assist platforms with its Excelsius GPS.

The company started 2017 off on a positive note as its robotic solution gained a CE mark shortly after the start of the new year. The versatile system supports both minimally invasive and open orthopedic and neurosurgical procedures, with applications ranging from the cervical spine to the sacroilium, long bones, and cranium. According to Globus, the Excelsius is designed to minimize radiation exposure, streamline workflow, and reproducibly assist in implant placement.

Unfortunately, when attempting to gain access to the much more significant U.S. market where robotic surgical procedures are used in more cases than anywhere else in the world, according to Avicenne Medical’s Ali Madani, the company hit a bump in the road. In May, Globus received a letter from the U.S. Food and Drug Administration (FDA) stating the company had not “sufficiently addressed the FDA’s questions regarding the company’s 510(k) submission…”

The delay, however, was brief. In August, the company announced it had secured the necessary clearance from the FDA and would therefore be able to market the robotic system within the United States.

“Excelsius GPS is the culmination of years of research and development efforts and demonstrates Globus Medical’s product development capabilities,” said Norbert Johnson, vice president of robotics, imaging, and navigation. “We believe the Excelsius GPS System will advance patient care and provide tangible benefits for surgeons and hospitals in terms of time, accuracy and reduced radiation exposure through the application of robotic and navigation technology in spine and orthopedic surgery.”

Doubling down on its investment in the technology, in the second quarter of 2017, Globus Medical had closed on the acquisition of robotic developer KB Medical SA, based in Lausanne, Switzerland.

“The acquisition of KB Medical demonstrates Globus Medical’s continued commitment and enthusiasm for the potential impact of robotic technology on surgery,” said Dave Demski, then president of emerging technologies. “The addition of KB Medical will enable Globus Medical to accelerate, enhance, and expand our product portfolio in imaging, navigation, and robotics. KB Medical’s experienced team of technology development professionals, its strong IP portfolio, and shared philosophy for robotic solutions in medicine strengthen Globus Medical’s position in this strategic area.”

Given the growth opportunities this area offers for Globus, perhaps it was a logical choice for the Globus Board of Directors to name Demski as the new CEO in August. As previously mentioned, Demski had been serving as president of emerging technologies since 2015, a role designated to forward Globus’ long-term growth strategy in the development of new businesses. He had been a senior executive at Globus Medical since its inception in 2003, first serving as CFO until 2008. He then became president and COO, a position from which he navigated the company to above-category growth and profit margins, culminating in a successful initial public offering in 2012.

Demski moved into the role of CEO to replace Globus Medical’s founder and chairman of the board, David C. Paul, who was recovering from a health condition. Paul remained as executive chairman, however, where his focus was more on strategic initiatives and less on day-to-day operations.

“With Dave taking over day-to-day management of the company, I can focus on the things I am most passionate about and the areas in which I can bring the most value to our shareholders: strategy and technology innovation,” said Paul. “Globus Medical was built on delivering groundbreaking solutions to surgeons and their patients, and we will not stray from our core mission. We have built a strong company and will move forward with the same vision and passion for which we are known. I look forward to being part of the company’s continued success.”

That success includes offering more than 180 products indicated for the treatment of musculoskeletal disorders. Sales of those products reached just short of $636 million in 2017, which was an impressive double-digit increase of 12.8 percent over 2016’s $564 million. Its two business segments demonstrated equally substantial growth over the prior year.

Innovative Fusion includes a range of implant and surgical approach options to treat degenerative, deformity, tumor, and trauma conditions along the entire spine. The business enjoyed sales of $327 million, a 13.8 percent increase over 2016. Notable within this segment was the QUARTEX—a Occipito-Cervico-Thoracic stabilization system—and Alphatec products distributed by Globus following a transaction between the two companies in 2016.

The other half of Globus Medical, Disruptive Technologies, offers expandable cages, MIS, INR technology, motion preservation, and regenerative biologics technologies, as well as interventional pain management solutions. It saw sales rise to $309 million, which also represented double-digit percentage growth—11.6 percent. Noteworthy products from this division include the aforementioned Excelsius GPS, which saw its first commercial sale in the fourth quarter of 2017. In addition, the segment offers biologics products such as bioactive glass-based KINEX and SIGNIFY bone void fillers. The first orthopedic trauma products came out of the Disruptive Technologies unit and launched in the fourth quarter of the year. Among the company’s 11 FDA-cleared trauma systems are CAPTIVATE compression screws, ANTHEM fixation plates, AUTOBAHN intramedullary nails, and the ARBOR external fixation system.

Fueling a substantial portion of the growth for Globus last year was the previously mentioned 2016 transaction with Alphatec International. That $80 million deal gave Globus Alphatec’s existing international direct and distributor sales channels, which, prior to the deal, generated approximately $71 million in sales in 2015 and $15.6 million in the first quarter of 2016. As a result of bringing those distribution channels under Globus’ umbrella, the company saw its international sales grow 66 percent to $106 million in 2017. Comparatively, U.S. sales only increased 5.9 percent to $530 million.

$564 Million
NO. OF EMPLOYEES: 1,400

For many orthopedic device manufacturers, sales are driven primarily by the U.S. marketplace with international revenues often coming in at a distant second in comparison. While the demand for orthopedic technologies is growing in international regions, they still fall well behind the numbers for U.S.-generated sales. The international market growth, however, creates an opportunity for OEMs as new areas open up for their products.

The reality of this scenario was likely at the top of the minds of bigwigs at Globus Medical when deciding to acquire the international operations and distribution channels of Alphatec Holdings (the parent company of Alphatec Spine). The transaction, which was coupled to an agreement for Globus to extend a five-year senior secured credit facility of up to $30 million to Alphatec, came at a purchase price of $80 million in cash, which Alphatec would use toward its outstanding debt, investment in commercialization, and expansion of its U.S. business.

Globus Medical assumed all of Alphatec’s international direct and distributor sales channels as a result of the transaction. In 2015, these accounted for sales of $71 million and in the first quarter of 2016, $15.6 million. Alphatec products were still sold through the channels until a complete transition could be made to Globus Medical’s product portfolio—the timing of which varied depending on each country’s regulatory requirements as well as contractual obligations. Also as a result of the transaction, Alphatec would supply Globus Medical with its products for a period of up to five years.

“Strategically, this acquisition gives us immediate access to Japan and increased presence and penetration in other key geographies, and significant scale, roughly doubling our international sales,” said David Paul, Globus Medical’s chairman and CEO. “In addition, we will be acquiring a talent pool of international sales professionals as well as an extensive network of international distributors. We expect the impact to be marginally accretive in 2017 as we work through our transition and integration plans and to provide up to 8 cents per share in incremental non-GAAP diluted earnings per share (EPS) in 2018 and beyond.”

Reviewing Globus Medical’s 2016 figures, it’s apparent that gaining an additional hold in new international regions will certainly help the company’s overall sales. Of the total $564 million in sales the company had in 2016 (fiscal year ended Dec. 31), only $63 million was derived from regions outside the United States. At the time of the Alphatec transaction, the company anticipated that the deal could add an additional $10 million to sales in the fourth quarter of FY16. The actual increase, however, over 2015 was 37 percent, a real monetary difference of more than $17 million. Further, the company expects the transaction to generate an additional $40 million in international sales for 2017.

The Independence MIS system features advanced instruments that deploy three pre-loaded anchors through a small protected corridor no larger than the implant itself. Image courtesy of Globus Medical.

If the Alphatec transaction can truly accelerate international sales for Globus, the company will enjoy significant gains in the coming years, backed by a strong base established through orthopedic sales within the United States. That region, however, while primarily responsible for the overwhelming majority of the company’s sales, experienced relatively flat growth (0.4 percent increase) in 2016 compared to the year prior, posting $500 million in sales for the year.

“In many respects, 2016 was a great year for Globus; at the same time, it was one of the most challenging periods in our company’s history. I’m proud to say that our company has responded to that challenge and we exit 2016 with a strong foundation to accomplish the goals we’ve set out for ourselves,” Paul said during a conference call announcing fourth quarter results for 2016. “As we look toward the rest of 2017, we’re confident of growing our top and bottom lines above market rates, within our core spine business. We’re particularly proud of our margins as they continue to be best in class within the industry, with this marking Globus’s eight consecutive year of mid-thirty’s EBITDA margin. We will continue to execute on our long-term strategy for success, as we drive towards $1 billion in sales.”

While the company enjoyed solid growth in international sales in 2016, it has a long journey before it hits $1 billion. The Alphatec transaction will help move toward that goal, but the company will need to grow its offerings in other ways to gain that achievement.

In the immediate future, Globus will enjoy the new international channels through which to distribute its 170 product offerings specifically indicated for the treatment of the spine, including 17 new offerings that joined the company’s portfolio in 2016. This portfolio is separated into two categories: Innovative Fusion and Disruptive Technology. The Innovative Fusion products are described by the company in its annual report as “a range of implant and surgical approach options to treat degenerative, deformity, tumor, and trauma conditions along the entire spine.” Expandable cages, minimally invasive surgery, motion preservation, and regenerative biologic products are all included as part of the Disruptive Technologies category. The breakdown in contribution to the company’s sales figures between these two product categories is almost a 50-50 split, with Innovative Fusion posting $288 million compared to $276 million from Disruptive Technology products. Growth, however, favored the Disruptive offerings, which experienced a 7.7 percent increase over the prior year, while Fusion sales fell 0.2 percent.

A CE mark in early 2017 for the company’s Excelsius GPS system—a robotic trajectory guidance and navigation solution—along with a series of orthopedic trauma products mark the creation of the company’s new Emerging Technologies products category. As these products didn’t begin selling until FY17, the company offered no insights on performance in the FY16 figures, but it could be an interesting new category worth watching in the coming years and may be instrumental in Paul’s goal of reaching $1 billion in sales.

Going forward, the company will promote the new category along with the aforementioned 17 new products that were released in 2016. Highlighting this group was the Quartex OCT Stabilization System. This solution is indicated as an adjunct to fusion to provide immobilization and stabilization in the spinal segments C1-C7 and T1-T3. Another standout among the new offerings was the Independence MIS—a minimally invasive ALIF integrated plate spacer. These interbody fusion devices are indicated for patients with degenerative disc disease at one or two contiguous levels of the lumbosacral spine (L2-S1).

$545 Million
NUMBER OF EMPLOYEES: 1,200

During its 2015 fiscal year, Globus Medical enjoyed a relatively quiet period while seeing sales increase by double-digit figures over the prior year. Unfortunately, the good news of a positive financial year did not last very long. Just a couple of weeks following the year’s close, a lawsuit between Globus Medical and DePuy Synthes was settled for the amount of $7.9 million. The settlement covered several, originally separate lawsuits between the two companies—one filed by N-Spine and Synthes USA in 2010, a second by Synthes USA in 2011, and a third filed by DePuy Synthes in 2014. Both the 2010 and 2014 lawsuits alleged the infringement of a patent by Globus Medical for its Transition stabilization system product. The 2011 lawsuit alleged infringement against a patent by Globus with its Coalition, Independence, and Intercontinental products. The settlement of Jan. 13, 2016, brought to an end a total of four pending lawsuits between Globus Medical and DePuy Synthes.

Unfortunately, this issue wasn’t the only legal affair for Globus Medical in 2015. In a lawsuit dating back to March 2012 that had Sabatino Bianco filing suit against Globus for misappropriated trade secrets and confidential information by improperly utilizing it in the Caliber, Caliber-L, and Rise products, an appeals court affirmed the original judgment in favor of Bianco on Oct. 19, 2015. That decision goes back to a jury verdict in favor of Bianco on the claim of misappropriation of trade secret that was handed down in January 2014. A later court awarded Bianco an ongoing royalty of 5 percent on the net sales of all three products for a period of 15 years. Globus is still considering appeal options.

Two additional lawsuits were filed against Globus in 2015. Flexuspine Inc. filed for patent infringement against Globus, alleging that the company’s Caliber, Caliber-L, Rise, Rise-L, Intralif, and Altera products infringe on five of Flexuspine’s patents. The second lawsuit involves a putative securities class action lawsuit filed against Globus. The plaintiff purports to represent a class of stockholders who purchased shares in the company between Feb. 26, 2014, and Aug. 5, 2014. In both cases, the plaintiffs are seeking an unspecified amount plus relief. Globus is currently fighting both cases and offers no estimate as to when either will be resolved.

Legal concerns aside, Globus celebrated growth in sales in 2015. Its $545 million sales figure represented a 14.8 percent increase over 2014’s $474 million figure. The company’s sales are driven by two major product categories—Innovative Fusion and Disruptive Technologies. The Innovative Fusion group includes products that are used to “treat a wide variety of spinal disorders for the entire spine and can be used in a variety of surgical approaches,” according to the company. Globus views this assortment of products as presenting advantages to surgeons and patients, contributing to better outcomes. This group contributed $288 million to the total 2015 sales figure, which marked an increase of 6.4 percent over the prior year.

Globus’ other sector, Disruptive Technologies, are classified as products that potentially offer a “significant shift in the treatment of spinal disorders by allowing for novel surgical procedures, improvements to existing surgical procedures, and the treatment of spinal disorders earlier in the continuum of care,” according to the company. These products enable minimally invasive procedures, use of motion preservation technologies, and the employment of interventional pain management solutions. The product group is viewed by the company as a significant opportunity for growth. That strategy was supported by the overall impact of the group on the company’s sales. It represented approximately $257 million in sales toward the full 2015 figure, a significant 26.1 percent increase over 2014 (the group only saw a 12.8 percent increase the year prior).

Further, the company will likely see both sectors continue to grow with a healthy investment in research and development expenditures. The company put 6.8 percent of sales toward R&D in 2015, a figure that was 16.7 percent higher in actual dollar total over 2014. The company will likely see further growth in R&D in 2016 as it plans to redirect approximately 40 percent of money previously allocated to pay for the device tax that it had been responsible for in 2014 and 2015 (when the company paid $7.1 million and $8.1 million respectively) toward job-creation initiatives in R&D and manufacturing.

Additional growth opportunities lie in expansion of sales outside the United States, where company executives see an overwhelming opportunity. The United States represents almost $500 million of the company’s total sales, leaving the rest of the world as making up just $47 million of total sales or about 9 percent. The U.S. sales total represented an increase of 16.6 percent over 2014. While on a constant currency basis, international sales actually improved by 16 percent, the actual figure marked a decrease of 1.5 percent over the prior year.

In addition to working with international distributors to better identify market opportunities, Globus plans to continue to use product launches to help further grow international sales (in addition to the U.S. marketplace). The company saw a number of product releases in 2015, but had two that were notable.

In July, Globus announced the introduction of the Rise-L, an expandable lateral lumbar interbody fusion (LLIF) device. The product joined a line of expandable spacers the company already offered that was started with the Patriot TransContinetal LLIF cage.

“Over the last four years, we have continued to build upon our unmatched family of expandable spacers, and I am proud of our product development team with the launch of Rise-L. This new lateral cage eliminates the need to forcefully impact the cage into the disc space. Our expansion technology allows the Rise-L cage to be placed in compact form, and expanded for optimal fit, and also includes a large port for easy graft delivery once expanded,” Andrew Iott, senior vice president of product development, commented in the product release announcement.

Later in the year, in October, the second product release of note was announced—the Creo MIS, a low profile minimally invasive posterior stabilization system. The product featured one of the smallest screw head diameters available on the market at the time.

“Globus continues to lead the way with a growing portfolio of MIS related products, including this important addition to our Creo Pedicle Screw System platform. Surgeons appreciate the intuitive simplicity of the Creo MIS platform, including the ability to insert the locking cap through the screw head in a controlled, guided manner where the rod is then captured, reduced, and locked in one simplified step,” Iott commented in a company release. “Creo MIS has been used in over 300 spine procedures since its launch in the second quarter of 2015, and the feedback from surgeons has been extremely positive. We are proud to add yet another innovative solution to our suite of MIS products. This product is designed to help surgeons treat their patients with less tissue disruption leading to faster recovery times. We will continue to provide innovative solutions that allow our surgeons to better improve the lives of their patients.”

The company may also enjoy growth opportunities through its acquisition in 2015 of Branch Medical Group (BMG) for the purchase price of $52.9 million. The company was a third party manufacturer of high-precision medical devices.

“We are very excited by the vertical integration opportunity afforded by BMG to strengthen Globus, both operationally and financially. BMG is an extremely efficient organization; driven by their “Right, On Time” credo to produce high-quality, precision medical devices,” Dave Demski, president and COO of Globus, said in a press release put out to announce the acquisition. “The potential to expand the amount of products manufactured by BMG in the future represents a significant opportunity for Globus, and, at the acquisition price, is a compelling value.”

The established relationship between Globus and BMG was also viewed as a significant advantage that would only increase the value of the acquisition.

“BMG has grown to be our top supplier by consistently producing our most complex parts in a highly efficient manner. The close working relationship we have enjoyed over the years has enabled us to work together to get products to the market quickly,” Iott said in the same release. “The ability for enhanced collaboration between Globus engineers and BMG manufacturing professionals in the future is an added benefit to the transaction.”

$474.3 Million
NO. of EMPLOYEES: 900

The pain seemed to come out of nowhere, shooting thunderbolts of white-hot heat down Frank Hummel’s left arm from shoulder to fingertips. Relief was practically impossible as neither medication nor physical therapy could dull the burning within his limb.

Hummel’s life quickly morphed into a series of terrible, horrible, no good, very bad days: Once-simple tasks like going to work or picking up his children at school became agonizingly difficult. Even sleeping was a challenge.

“My neck, my back, my arm was numb, my hand was numb. And nothing would help,” he recalled. “It hurt. It hurt a lot. Sleeping was hard, interacting with my family was hard—anything, really—life became very hard.”

And so it remained until doctors diagnosed Hummel with a herniated disc in his lower neck (between the C-5 and C-6 vertebrae). Surgery was his only real treatment option.

“Before surgery I was nervous. It was hard to sleep sometimes, there was a lot weighing on my mind,” he said. “I was thinking about my family … what am I going to do after surgery? Can I do the things I [like to] do? I like kayaking, hiking, I like fishing, and I was afraid that I might not be able to do all these things again.”

Valid fears, certainly, and, most likely the rationale behind Hummel’s choice of disc replacement over spinal fusion surgery. After consulting with his orthopedist, Jeffrey R. McConnell, M.D., of Allentown, Pa., Hummel settled on the Secure-C Cervical artificial disc, a motion-sparing device designed specifically as an alternative to fusion. Made by Audubon, Pa.-based Globus Medical Inc., the artificial disc provides articulation and sagittal plane translation, allowing up to 15 degrees of motion in flexion/extension (bending the neck forward and backward), and up to 10 degrees of motion in lateral bending (side to side). The disc itself consists of two metal (chromium molybdenum) endplates coated with a titanium plasma spray, and a polyethylene inner core designed to minimize wear debris.

“Waking up from surgery was amazing. The arm pain was gone, the hand numbness was gone, the thumb pain was gone, everything was back. I had surgical pain but it was nothing compared to what I was going through before,” Hummel said. “It was absolutely amazing. After my three-month checkup, they cleared me for work and that was fantastic. I was also able to go kayaking again, and go camping and hiking. It was a great time and it still is. It’s a good feeling to have your life back. I got my life back and I feel great.”

Hummel’s recovery capped a “great time” in Globus Medical’s 12-year history as well: The company grew sales 9.2 percent last year to $474.3 million and increased its gross profit 8.8 percent to $363.5 million, according to the 2014 annual report. Net income skyrocketed 34.8 percent to $92.5 million, with net income per diluted share rising by nearly the same amount (32.8 percent) to 97 cents per share.

“2014 was a great year for Globus Medical,” Chairman/CEO David C. Paul told analysts during an earnings conference call earlier this year. “Full-year EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 140 basis points to 26.1 percent of sales. We launched 16 new products, significantly expanded our research capabilities and successfully completed the acquisition of Transplant Technologies of Texas. This performance was a result of continued execution of our strategy of robust product innovation, sales force expansion and disciplined expense control.”

And well-accepted technology. Paul and his fellow executives attributed Globus’ stellar fiscal performance last year to strong demand for both new and existing products, particularly devices released during the last three years. Old favorites that contributed to 2014 sales growth included the Secure-C Cervical disc, the Latis Spacer, the Fortify corpectomy spacer, Kinex Bioactive and the SI-LOK Sacroiliac Fixation System, a device that alleviates pain by fusing the joint in a minimally invasive procedure. The product features hydroxy-apatite-coated screws with an optional slot for bone graft materials.

The Revere Threaded Reduction Screw System and CREO platform were among the products that boosted Innovative Fusion sales 6.6 percent in 2014 (year ended Dec. 31) to $270.8 million. The Revere device includes both polyaxial and uniplanar screws designed specifically to address spondylolisthesis and other spinal deformities. Its ±30-degree screw angulation (60 degrees total) provides intraoperative versatility, and reduction tabs allow maximum rod reduction into the screw head while the blunt tip permits bicortical purchase. The threaded locking cap mechanism is optimal for cases in which patient anatomy limits the space for reduction maneuvers.

Globus continued to roll out its CREO portfolio last year in its drive to turn the product into the world’s “most advanced and comprehensive pedicle screw system for various complex, deformity, degenerative and trauma pathologies through either an open or minimally invasive approach.” According to bigwigs, the CREO platform—encompassing the non-threaded, AMP, threaded, threaded AMP, deformity, MCS and SILC models—has been used in roughly 6,000 surgeries worldwide. Executives plan to introduce another nine versions of the product by mid-2016.

Similarly, robust demand for Globus’ minimally invasive, biologic, artificial disc and interventional pain management products helped lift Disruptive Technology revenue 12.8 percent to $203.5 million. Sales drivers in this category included Kinex Bioactive and the Plymouth Lateral Plate System, the latter of which is designed to provide spine stabilization through a single lateral approach. Unique anchoring and keying instruments align the plate with the interbody device and vertebral body endplates, allowing controlled placement with minimal retraction.

Kinex is a bioactive product with the osteostimulative properties of bioglass that amplifies the cellular activity responsible for bone formation. In addition to bioglass, Kinex contains collagen for scalp holding and hyaluronic acid to help with angiogenesis.

Newcomers that contributed to 2014 earnings growth included the Monument Anterior Spondylolisthesis Reduction system, SILC Fixation System and Altera Minimally Invasive Articulating Expandable spacer. Globus executives describe the Monument as an anterior lumbar interbody fusion device with a built-in mechanical feature to help with spondylolisthesis reduction. The self-locking and threaded translational attribute can be engaged to reduce the implant up to 8 millimeters in-situ, and the screws are designed for optimal cortical purchase. Monument is manufactured in different sizes, heights and sagittal angles to accommodate the lumbar and sacral spine, including L5-S1. The device is intended for use with supplemental fixation.

The SILC system is a low profile sublaminar fixation device that provides the stability to perform standard reduction maneuvers for spinal curvature correction without the need for pedical purchase in all vertebrae. The system consists of a polyethylene band that uses the strength of the laminal cortical bone as well as a top-loading clamp with integrated set screw allowing implant insertion at any time during the procedure. SILC is compatible with rod diameters ranging from 4.5 millimeters to 6.5 millimeters.

Released at the North American Spine Society 2014 Annual Meeting in November, the Altera spacer helps restore lordosis and maintain sagittal balance while reducing the challenges of insertion. The spacer is inserted at a minimized height, articulated into an anterior position and then expanded vertically to optimize fit (surgeons have the choice of 8-degree or 15-degree profile angles). The device also allows for in-situ delivery of autogenous bone graft into, as well as around, the implant after it has been expanded.

Securing Future Growth

Besides its new product launches, Globus also shored up its future earnings potential by acquiring allograft tissue processor Transplant Technologies of Texas Ltd. in October and refining its robotics program throughout the year.

Paul said the company made “tremendous progress” in commercializing its robotics technology, building a multidisciplinary team in Boston, Mass., dedicated to working on robotics, navigation and imaging. The firm’s first product is a robotic surgical aid for navigating and facilitating surgical access, implant sizing, positioning and placement; the system is being designed to enable surgeons to perform procedures more quickly and with greater accuracy, safety and reproducibility. Paul is eyeing a 2016 target for commercialization.

The Transplant Technologies purchase arrived too late in the year to significantly impact sales, but Globus bigwigs expect the addition to contribute $12 million in revenue this year and neutrally impact fully diluted earnings per share for 2015.

Transplant Technologies processes sterile human tissue and distributes a wide range of allograft implants (tissue graft from donors), including machined spine implants, demineralized bone matrix, sponge allografts and traditional bone allografts. The company also processes and distributes sports medicine tendons, birth tissue allografts and skin allografts. Founded in 1993, Transplant Technologies products have been used in more than 600,000 implant procedures worldwide.

Globus said it plans to grow Transplant Technologies’ operations in Texas and maintain its existing relationships with distribution partners while pumping its products to its own sales channels.

Back in Court

The company’s legal problems intensified last year with the filing of two new patent infringement lawsuits and a trade secret misappropriation guilty verdict.

A judicial double-whammy occurred in January, as DePuy Synthes accused Globus of infringing upon its spinal stabilization device with the Transition Stabilization System, a semi-rigid posterior fixation solution that provides “unique” biomechanical profiles. The product’s SoftStop technology allows optimized load sharing with the anterior column and transitional stabilization between rigidly fused levels and un-instrumented spinal segments. DePuy does not specify the way(s) in which the Transition device infringes upon its patent, nor does it identify the specific product it mimics, but the Jan. 8 complaint does ask the court for relief.

Nine days later, a federal jury found Globus guilty of trade secret misappropriation and awarded a neurosurgeon $4.3 million in damages. The physician, identified as Sabatino Bianco, M.D., sued the company in 2012, alleging that it misappropriated his trade secrets by using drawings related to three implantable medical devices he had provided to Globus years earlier pursuant to a confidentiality agreement (the Caliber, Caliber-L, and Rise products). Bianco claimed that Globus told him it was not interested in commercializing the idea he proposed in the drawings but then internally developed and sold a device incorporating that idea without compensating him.

Following trial, the jury awarded Bianco a 5 percent royalty based on net sales of three specified Globus products. In post-trial motions, the parties disputed the appropriateness of an ongoing royalty. Noting that ongoing royalties were appropriate in patent-infringement cases, the court reasoned that misappropriation was sufficiently analogous to patent infringement and upheld the jury’s royalty award. The court also concluded the royalty should be paid for 15 years from the date that an agreement between Bianco and Globus should have been reached in 2007 and that the royalty was owed on all products “not colorably different” from those at issue in the litigation.

Globus, naturally, is appealing the jury’s verdict.

In November, Bonutti Skeletal Innovations, LLC filed a patent infringement suit against Globus, claiming several of the company’s spinal spacer products and related instruments infringe Bonutti Skeletal patents, which include one titled “Changing Relationships Between Bones,” issued Aug. 8, 2000.  The patent discusses the use of a wedge member in a joint to alter the relative positioning of a patient’s bones.

Specifically, Bonutti Skeletal alleges that Globus’ Caliber, Caliber-L, Coalition, Colonial, Continental, Forge, Fortify, Fortify I PEEK, Fortify I-R, Independence, Intercontinental, Monument, Nikeo, Rise, Signature Sustain Arch, Sustain Large, Sustain Medium, Sustain-O, Sustain Small, and Transcontinental spinal spacer products each infringe various Bonutti Skeletal patents.

According to the complaint, Bonutti Skeletal has been built on the work of Peter M. Bonutti, M.D., a surgeon that has performed more than 20,000 orthopedic procedures and been the inventor or co-inventor on more than 150 U.S. patents.

$434.5 Million
NO. OF EMPLOYEES: 850

Fiscal 2013 was a strong year for Globus Medical Inc. Besides a period of solid financial performance and new product launches, the year also marked the 10-year anniversary for the maker of musculoskeletal implants—primarily for the spine.

“2013 was an outstanding year for Globus Medical. Sales grew by 12.6 percent, reaching $434.5 million; our full year adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was 34.7 percent of sales; we launched 16 new products; and we completed the acquisition of Excelsius Surgical,” said David Paul, chairman and CEO, following the release of annual performance data.

According to Paul, the strong performance was the result of “consistent, sustained execution” of the company’s strategy of “combining robust product innovation and continued sales force expansion with disciplined expense control.”

Net income for the year was $68.6 million or 73 cents per diluted share, as compared to $73.8 million, or 80 cents per diluted share, for 2012. The company’s reported cash, cash equivalents and marketable securities ended the year at $275.5 million, increasing by $63.1 million during the year.

The company also is debt free, Globus officials reported.

For FY13, research and development accounted for $26.9 million, down slightly from $27.9 million in 2012.

Sales from the Innovative Fusion products sector—which are used in cervical, thoracolumbar, sacral, and interbody/corpectomy fusion procedures to treat degenerative, deformity, tumor, and trauma conditions—were $254 million. Spinal fusion corrects problems with the individual vertebrae, the interlocking bones making up the spine, by preventing movement of the affected bones. Sales of Innovative Fusion-category products increased by $15.3 million (a 6.4-percent bump) due to strong sales of legacy and new pedicle screw systems.

Sales from the company’s Disruptive Technologies category were $180.5 million. Globus defines its Disruptive Technologies unit as products that “represent a significant shift in the treatment of spine disorders by allowing for novel surgical procedures, improvements to existing surgical procedures, the treatment of spine disorders by new physician specialties, and surgical intervention earlier in the continuum of care.” The firm’s current portfolio of approved and pipeline products includes motion-preservation technologies, such as dynamic stabilization, total disc replacement and interspinous process spacer products, and advanced biomaterials technologies, as well as interventional pain-management solutions, including treatments for vertebral compression fractures. The growth in Disruptive Technologies of $33.2 million (representing 22.5 percent growth), according to the firm, primarily was the result of minimally invasive, biologic, artificial disc and interventional pain management products launched during the past three years.

Despite a company name that evokes worldwide reach, Globus primarily focused sales on the U.S. market. For fiscal 2013, sales outside the United States were just $37.8 million (8.7 percent of total sales), but a 24.5 percent increase from 2012.

Company brass, according to its recent annual report, plans to increase international sales by launching more products abroad and expanding the company’s direct and distributor sales force.

Regulatory & Legal Challenges

Globus received a warning letter from the U.S. Food and Drug Administration (FDA) on Sept. 26. The letter flagged “deficiencies” in the company’s response to a Form 483 warning the agency issued after inspecting the medical device company’s Audubon facility in May and June.

The deficiencies related to the firm’s Microfuse putty, a synthetic bone void filter product that combines Globus’ Microfuse granules with a resorbable polymer carrier. The warning letter did not restrict the company’s ability to manufacture or seek 510(k) clearance of products, company officials said.

In July 2011, Synthes USA LLC—now part of Johnson & Johnson’s DePuy orthopedics division—accused Globus of infringing three intervertebral implant patents, asking the court to force the defendant to destroy its allegedly infringing products. Two years later, on June 17, the jury in the U.S. Court in Delaware found that prior versions of three products previously sold by Globus Medical indeed did infringe on Synthes’ patents and awarded monetary damages in the amount of $16 million. There was no finding of willful infringement in this lawsuit.

The three products in question were no longer sold by Globus Medical at the time of the verdict, so the jury’s decision did not affect the company’s sales, neither did it require any royalty payments to Synthes based on current or future sales. The decision is being appealed.

It was not the first lawsuit Globus Medical has faced from Synthes. In 2007, Globus paid $13.5 million to settle a series of patent infringement allegations.

New Product Launches

Out of the 16 new products launched during FY13, notable market introductions included the following:

• • During the annual meeting of the Chicago, Ill.-based North American Spine Society (NASS) in October, Globus launched CREO, the company’s next-generation pedicle screw platform.

“CREO offers surgeons the ultimate in adaptability, with the ability to intraoperatively tailor the construct to best meet individual patients’ needs in treating complex spinal pathologies. Our most ambitious product launch to date, CREO’s streamlined, intuitively designed instrumentation facilitates efficient and reproducible outcomes,” said Andrew Iott, senior vice president of global product development. “This launch, focused on complex pathologies utilizing our patented non-threaded locking cap mechanism, represents the first phase in the evolution of the CREO platform.” The system also includes options for minimally invasive surgery, cortical screws, as well as a threaded locking cap version. According to company officials, the CREO and the CREO Advanced modular platform stabilization systems enhance efficiency and ease of use by providing intuitively designed instrumentation and intraoperative versatility along with a complete array of implant options for treating complex spinal pathologies, in one system.

CREO pedicle screws are available in modular and pre-assembled versions with top-loading, side-loading and closed-head options. Rod diameters range from 4.75 to 5.5 millimeters and are available in titanium.

• • The company launched Latis, a minimally invasive lumbar interbody fusion spacer for patients suffering from degenerative disc disease. The implant is designed to be inserted through a minimally invasive surgery (MIS) transforaminal lumbar interbody fusion (TLIF) approach and expand laterally to provide a footprint and graft volume equivalent to an anterior lumbar interbody fusion (ALIF) spacer or lateral lumbar interbody fusion (LLIF) spacer. According to Globus, the Latis spacer provides a large stable footprint and a substantial graft window, benefits typical of an ALIF or LLIF spacer, without requiring anterior access or nerve monitoring, and allows for direct decompression of nerve roots via the MIS TLIF approach. The 10-millimeter-wide titanium implant can be inserted posteriorly and can expand in-situ up to 26-millimeter squared. Designed to reduce subsidence and migration, the spacer has a locking set screw designed to secure deployment at any position within the expansion range. The Latis system includes customized disc preparation and sizing instruments to simplify the procedure for an efficient minimally invasvie TLIF approach. The system includes a variety of footprints, heights, and lordotic configurations, for a customized fit for each patient. A single instrument is used for insertion, expansion, locking, and bone graft delivery. “This new addition to our MIS portfolio is the first expandable implant on the market to offer the benefits of a traditional anterior implant, without the two-part disruptive surgical procedure,” said Iott. “Combined with posterior stabilization using our Revolve MIS pedicle screw system, the entire procedure is designed and intended to maximize preservation of the stabilizing muscles of the lower back.”

• • The company also launched its new Fortify I, an expandable corpectomy spacer with integrated screws for further stability in addition to supplemental fixation. A corpectomy is a surgical procedure that involves removing part of the vertebral body usually as a way to decompress the spinal cord and nerves. Fortify I adds to the Globus portfolio of expandable spacers. The system provides anterior column support for individual and multiple level corpectomy patients, and uses integrated screws, superior and inferior, that are designed to prevent dislodgement. The spacer is available in a variety of sagittal profiles and footprints for an optimized fit, and has integrated titanium plates and screws for additional stabilization between the vertebral bodies and spacer. The radiolucent PEEK (polyetheretherketone) implant option is meant to allow for postoperative visualization and provide a modulus of elasticity closer to bone. Fortify I integrated corpectomy spacers (Fortify I and Fortify I-R) are vertebral body replacement devices indicated by the FDA for use in the thoracolumbar spine to replace a collapsed, damaged, or unstable vertebral body due to tumor or trauma. These devices are intended to be used with supplemental spinal fixation systems that have been labeled for use in the thoracic and/or lumbar spine such as posterior pedicle screw and rod systems, anterior plate systems, and anterior screw and rod systems. The interior of the spacers can be packed with autogenous bone graft or allograft. These spacers are designed to provide anterior spinal column support even in the absence of fusion for a prolonged period. The system was granted 510(k) clearance from the FDA in June 2012.

Going Forward

Globus started its 2014 fiscal year with an important purchase.

In January the company reported that it had acquired Excelsius Surgical, which is developing a next-generation surgical robotic positioning platform for the spine, brain and therapeutic markets. The Excelsius Surgical system is a robotic surgical aid for navigating and facilitating surgical access, implant sizing, positioning and placement, and is designed to enable surgeons to perform procedures more quickly and with greater accuracy, safety and reproducibility than is currently available in the marketplace today, according to Globus officials.

Financial terms of the transaction were not disclosed.

“We are very excited by the strategic fit and potential of Excelsius Surgical. Our product development efforts focus on products designed to minimize tissue disruption, blood loss and surgical complications, and we believe that the use of advanced technology solutions, such as the Excelsius Surgical system, will enable surgeons to consistently achieve better surgical outcomes,” said Paul.

“Recent trends in the adoption of navigation technology as well as advancements in imaging only serve to reinforce our belief that technology will play an increasingly greater role in surgery in the future. We believe that this acquisition positions Globus to be a leader in this important area.”

The Excelsius Surgical robotic positioning system is being designed to integrate intra-operative digital imaging with a sophisticated robotic surgical assistant that maintains anatomical positioning during the surgery with sub-millimeter accuracy. The technology was developed in conjunction with Dignity Health’s Barrow Neurological Institute at St. Joseph’s Hospital and Medical Center in Phoenix, Ariz. Co-founders Neil R. Crawford, Ph.D., associate professor of spinal biomechanics at Barrow, and Nicholas Theodore, M.D., neurosurgeon and chief of spine surgery at Barrow, led the development of the technology.

Globus expects to obtain FDA clearance for the system in 2015, with commercial sales expected in 2016.

“We started Excelsius Surgical to develop a surgical technology that would improve clinical outcomes,” said Nicholas Theodore, M.D., co-founder of Excelsius Surgical. “We combined robotics and imaging with the goal of enabling surgeons to reproducibly and cost effectively perform robotically assisted, minimally invasive surgery with fewer complications and less trauma, as well as reducing radiation exposure for patients, surgeons and operating room personnel. We are proud of our development progress to date and believe that Globus will be a great partner to bring this technology to the market.”

The robotic surgery market apparently agrees with Globus.

The company experienced a strong first quarter, during which the company notched the acquisition of Excelsius Surgical. Profits jumped 6.3 percent to $21.1 million, or 22 cents per diluted share, on sales of $114.2 million during the three months ended March 31. That compared with profits of $19.9 million, or 21 cents per share on sales of $105 million during the same time last year. U.S. sales grew 5.6 percent over the first quarter of 2013 while international sales, representing 10.9 percent of total proceeds, skyrocketed 43 percent.