Wells Fargo did some initial calculations and pegged the incremental market opportunity for Globus at approximately $300MM in incremental sales. Those estimates were based on the following assumptions.
- 3,500 spine centers in the U.S.
- Most have an O-Arm
- Average selling prices (ASPs) of $600-700k
- Replacement every 5-7 years
Globus’s new interbody module for its ExcelsiusGPS was cleared by the FDA in late July and Wall Street took note. Said the Wells Fargo team, “The module seems intuitive to us and allows surgeons to easily switch between pedicle screw placements and cage placements during the procedure. The company has previously noted that they expect all of their customers to upgrade to the interbody module and that they expect to capture incremental value from the roll-out over time. It is worth highlighting that GMED is the leader in expandable cages and 60% of all lumbar cases utilize interbody cages.”
NuVasive, Inc.
NuVasive (NUVA) rolled out its long-awaited Pulse robotic system at NASS this year and Wall Street’s consensus appears to be that it’s a strong offering against the two market leaders, Globus Medical’s ExcelsiusGPS and Medtronic’s Mazor Stealth.
According to the Wells Fargo team, NuVasive’s Pulse platform appears to have been brought in-house from KUKA Robotics—the German manufacturer of industrial robots which is owned at least in part by the Chinese company Midea Group.
Management told Wall Street that the surgeon response and feedback had exceeded their expectations. First-in-man for Pulse is targeted for the second half of 2020 which puts likely commercialization in 2021. Pedicle screw placement will be Pulse’s job #1 and it will integrate with NuVasive’s award winner X360 platform. Bone cutting and retractor management come next.
For the Wells Fargo team, the most differentiating feature of Pulse appeared to be its robotic arm. “We believe that the most differentiated feature of the platform is the robotic arm. It has a broad range of motion featuring 7 axis points versus 6 for ZBH’s [Zimmer Biomet] ROSA and 5 for GMED’s Excelsius.”
“This allows the robot to approach the patients from different angles—posterior, anterior and lateral without having to reposition. We believe this is a differentiated feature even though some of the competitors we spoke with noted that 5-6 axis points are more than sufficient to perform nearly all spine procedures.”
Cantor’s Bijou’s first impressions were positive. He noted that Pulse “appears to be on par with the current systems on the market and may have some incremental improvements, such as its seven-axis arm, which may allow for smoother, faster movement, but could sacrifice some stability and rigidity.”
Bijou also highlighted that Pulse’s set up time is five minutes, which, he said, “is likely faster than other systems on the market.”
Finally, Bijou wrote to his clients that “The Pulse robot may have some incremental improvements over the current systems on the market, but we do not believe that NUVA’s robot has significant differentiation that would cause a hospital to delay a purchase of currently available system. NUVA is currently selling the Pulse system without the robot and the robot could be added on once approved.”
