Both Globus Medical, Inc. and NuVasive, Inc. reported their second quarter results this past week, but the main thing Wall Street and institutional investors wanted to know was, is the merger on track to close, as both managements had been saying, in the third quarter ending September 30, 2023?
The answer, from each of the individual company analyst calls, is “yes.”
Analysts were understandably concerned when the proposed deal, which was formally announced on February 9, 2023, was delayed as regulators had questions for both companies.
Combined, Globus and NuVasive would become the second largest supplier of spine surgeon products with an expected 22.4% market share—below Medtronic Spine’s 30.3% share.
The next largest supplier after a combined Globus and NuVasive would be JNJ’s Synthes/DePuy operating unit at 12%.
In fact, as the following chart shows, post-merger, seven companies would comprise 87% of all spine surgical product shipments.
What, perhaps, the regulators might be missing, is that these market share percentages reflect the mature business of supplying spine surgery hardware. The true competition is emerging in the digital future of spine surgery.
All of surgical medicine is transitioning from an artisanal past and into a future of engineered processes and computational medicine—including a dramatic increase in drug and biologic innovation.
Globus Soundly Beat Wall Street’s Q2 Sales and Earnings Estimates
Globus, right now, is the best performing integrated supplier of orthopedic implants, instruments, biologics, and digital solutions in the industry.
Here are the numbers:
- Second quarter sales: $292 million, up 11%, and well above Wall Street’s $280 million forecast
- Gross profit: 73%—which is about average
- Earnings before Interest, Taxes and Amortization (non-cash) profit margin: 33%—by far the best all of orthopedics.
It’s also worth noting that Globus ended the June quarter sitting on top of $612 million in cash and investments and zero long-term debt.
