ALPHATEC HOLDINGS INC Q4 2012 Earnings Conference Call Transcript - Thomson StreetEvents

ALPHATEC HOLDINGS INC Q4 2012 Earnings Conference Call Transcript

ALPHATEC HOLDINGS INC Q4 2012 Earnings Conference Call Transcript - Thomson StreetEvents
ALPHATEC HOLDINGS INC Q4 2012 Earnings Conference Call Transcript
Published Feb 28, 2013
Published Feb 28, 2013
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Abstract:

Edited Transcript of ATEC earnings conference call or presentation 28-Feb-13 10:00pm GMT

  
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The following is excerpted from the question-and-answer section of the transcript.

(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)

Question: Raj Denhoy - Jefferies & Co. - Analyst : I wonder if I could ask you a little bit about the revenue guidance. It seems like there's some puts and takes here in 2013. Maybe starting with Phygen, I think in times past, you've talked about perhaps a $15 million contribution from them in 2013. Are you still comfortable with that?


Question: Raj Denhoy - Jefferies & Co. - Analyst : Okay. But then if you think about international, and I think that the US has some puts and takes there as well with Phygen and PureGen, as you mentioned. But then internationally, you posted a very strong fourth quarter here. Now, if you look at it into '13, the yen is probably going to hurt you guys quite a bit, given your exposure there. What do you think you're going to do in international growth in '13?


Question: Raj Denhoy - Jefferies & Co. - Analyst : So when you think of the $204 million to $210 million, how much currency is in there for you?


Question: Raj Denhoy - Jefferies & Co. - Analyst : How much of a currency offset?


Question: Raj Denhoy - Jefferies & Co. - Analyst : Okay. Just lastly, then, the fourth quarter international growth, that 16% constant currency number you put up, was there some stocking in there? Because that was such a strong number. I'm just curious, again.


Question: Raj Denhoy - Jefferies & Co. - Analyst : Okay, thank you.


Question: Matt Miksic - Piper Jaffray - Analyst : Just a follow-up on the international versus US. When you look at the growth in '13, just to be clear, are you expecting, just in reported growth, your US business to be growing faster than international, or vice versa?


Question: Matt Miksic - Piper Jaffray - Analyst : Okay, that's helpful. And then I was wondering if you could give some color, qualitative or some sense of the magnitude, of how some of these new products you've talked about have contributed in the fourth quarter as well. You know, the biologics products and the other products that you've launched late in '12.


Question: Matt Miksic - Piper Jaffray - Analyst : I'm glad you mentioned the first quarter. Is there also any selling day discrepancies that we should be aware of, as some of your brethren have had that issue facing them in Q1. companies.


Question: Matt Miksic - Piper Jaffray - Analyst : Right, right. That's helpful. And then finally, and I'm not sure if -- well, I'd love to get your sense on these 483s, maybe just speak to your confidence and some color around the type of issues that we're talking about and your confidence that they can be resolved to the agency's satisfaction here in the next couple of months.


Question: Matt Miksic - Piper Jaffray - Analyst : Okay, very helpful. Thanks.


Question: Bill Plovanic - Canaccord Genuity - Analyst : A couple of questions here. You referenced a 4% US implant growth sequentially. Is that inclusive or exclusive of Phygen?


Question: Bill Plovanic - Canaccord Genuity - Analyst : Correct.


Question: Bill Plovanic - Canaccord Genuity - Analyst : Okay. companies.


Question: Bill Plovanic - Canaccord Genuity - Analyst : Okay, that's helpful. And then switching to the gross margins, you're paying, or you're amortizing for (inaudible) Cross, and I think that ends in Q -- does that end in Q3 '13? So in Q4, '13, basically, there's $1 million less in cost buried in the COG line, or how do we think about that?


Question: Bill Plovanic - Canaccord Genuity - Analyst : Great. And the Phygen contributed about $1.3 million?


Question: Bill Plovanic - Canaccord Genuity - Analyst : Added to. Okay. And then, okay, it's mid-November, isn't it? Isn't it like the 15th of the month on that, they way it was directed?


Question: Bill Plovanic - Canaccord Genuity - Analyst : Okay. I've got a bunch of questions, so I'm flipping around here. And then as the PureGen product goes away, was that a big margin contributor, or what type of margin impact does that have?


Question: Bill Plovanic - Canaccord Genuity - Analyst : And that, when exactly was that pulled, or did you stop selling that product? companies.


Question: Bill Plovanic - Canaccord Genuity - Analyst : Okay, so mid, so basically, it was running, it's about a $6.5 million a year product. I'm trying to think, on a monthly basis, it was about $550,000-ish a month, is what I'm trying to get at.


Question: Bill Plovanic - Canaccord Genuity - Analyst : Okay. I'll ask one more, and then I'll jump off. Just a simple one. Is the med tech tax, as you look at this, where are you putting it in your P&L, and how much do you think it's going to cost you on an annual basis? And that's all I have. Thanks.


Question: Bill Plovanic - Canaccord Genuity - Analyst : Thank you, and good quarter.


Question: Josh Jennings - Cowen & Co. - Analyst : Just first on PureGen. Is that $6 million that you're not baking into guidance -- does that have any incorporation of any pull-through of your biologics or hardware included in that assumption?


Question: Josh Jennings - Cowen & Co. - Analyst : Okay, great. And then just understanding that Alphatec's more of a share gain story and not as levered to over market growth, but your commentary on US, expectation for US business growing in 2013 sort of at market levels. Can you just describe what your outlook is for the spine market in the US in 2013? And then --


Question: Josh Jennings - Cowen & Co. - Analyst : Great. Any ability to give some, just -- that low single digits that you've been experiencing early in the year, you said it was stable. Is that the level? Is that what modest is?


Question: Josh Jennings - Cowen & Co. - Analyst : Understood. And then lastly, just a position on distributors. One, your appetite for any incremental acquisitions similar to the Phygen deal. And then, secondarily, any insight into these recent OIG inquiries to hospitals inquiring about specific relationships with physician-owned distributors, and your sense of how the OIG progresses from here. Thanks a lot.


Question: Josh Jennings - Cowen & Co. - Analyst : Great. And then just lastly, any insight in terms of expectations for next steps for OIG or any implications for their recent inquiries? companies.


Question: Josh Jennings - Cowen & Co. - Analyst : Okay. Appreciate it. Thanks.


Question: Brandon Henry - RBC Capital Markets - Analyst : Yes, this is Brandon on for Glenn. Thanks for taking my question. First, I just want to touch on the strong sequential revenue uptick in the fourth quarter. Did you see any increased seasonality in the US in the fourth quarter? And then separately, did you add any big distributor that could have contributed to this performance?


Question: Brandon Henry - RBC Capital Markets - Analyst : Okay, that's helpful. And then Medtronic recently reported and noted some softness in January in Europe. Can you guys talk a little bit about what you're seeing in Europe at the beginning of the year and if you're seeing this same degree of softness?


Question: Brandon Henry - RBC Capital Markets - Analyst : Okay, but has anything changed in the European market in the first couple of months of 2013, I guess, is my question. companies.


Question: Brandon Henry - RBC Capital Markets - Analyst : Okay. And then last question. Can you provide just an update on that commercial reimbursement in spine. Has that gotten any better or gotten any worse? Thanks.


Question: Mark Landy - Summer Street Research - Analyst : Good evening folks, and a good quarter. Just picking up a little bit on Brazil, kind of Latin America, registration comment and getting through ANVISA, how far along their process are you, and how many of the key products have you gotten through their process and ready to be sold and distributed in those markets--in Brazil?


Question: Mark Landy - Summer Street Research - Analyst : Les, in terms of the Scient'X approvals, are very under reciprocity, or did they go through the comment approval?


Question: Mark Landy - Summer Street Research - Analyst : That's okay. There was a period, and I think it's closing, or it's become a lot more difficult, to get approval of products in Brazil. You went through, it was foreign approval reciprocity. So if you had a CE mark or approval in a foreign country, Brazil would honor that approval, and there would be reciprocity and ability to sell.


Question: Mark Landy - Summer Street Research - Analyst : Okay, I'll ask my next question offline relating to that. But then, if we look at that, a little bit at PureGen, you've had some heartache and grief with that relationship. Is there a Plan B? You know, it's not out of the woods yet with the FDA, and now with the 483s. When do you think about a Plan B for that product?


Question: Mark Landy - Summer Street Research - Analyst : That's fair enough. And then, Les, it's more of a philosophical, high-level question. You implemented the strategy of increasing the cadence of improvements and product line extensions over novel product development, obviously given the issues at the FDA, and not what only you are going through, but the entire industry is going through. How has that gone, and how sustainable is that strategy, and when do you have to start thinking about really pushing the Scient'X novelties through the agency?


Question: Mark Landy - Summer Street Research - Analyst : Okay, so right now, there's still a little bit of runway room with the line extensions and the improvements, and there really isn't that much pressure on really taking the, let's say, the aging spine products through the agency?


Question: Mark Landy - Summer Street Research - Analyst : Okay. Thanks, guys.


Question: Mark Landy - Summer Street Research - Analyst : Okay, thanks. Appreciate it.


Question: Chris Lewis - Roth Capital Partners - Analyst : This is Chris Lewis on the line for Matt. Thanks for taking the questions. I was hoping you could just talk a little bit about the Phygen surgeon conversion cycle. Just at this point, how many of those surgeons have become active ordering customers, and what level of activity have you seen from those converted surgeons at this point?


Question: Chris Lewis - Roth Capital Partners - Analyst : Okay, fair enough. Thanks. companies.

Table Of Contents

ALPHATEC HOLDINGS INC Q4 2013 Earnings Conference Call Transcript – 2014-03-17 – $54.00 – Edited Transcript of ATEC earnings conference call or presentation 17-Mar-14 9:00pm GMT

ALPHATEC HOLDINGS INC Q3 2013 Earnings Conference Call Transcript – 2013-11-07 – $54.00 – Preliminary Transcript of ATEC earnings conference call or presentation 7-Nov-13 10:00pm GMT

ALPHATEC HOLDINGS INC Q2 2013 Earnings Conference Call Transcript – 2013-08-06 – $54.00 – Edited Transcript of ATEC earnings conference call or presentation 6-Aug-13 9:00pm GMT

ALPHATEC HOLDINGS INC Q1 2013 Earnings Conference Call Transcript – 2013-04-30 – $54.00 – Edited Transcript of ATEC earnings conference call or presentation 30-Apr-13 9:00pm GMT

ALPHATEC HOLDINGS INC at Canaccord Genuity Musculoskeletal Conference Transcript – 2013-03-19 – $54.00 – Edited Transcript of ATEC presentation 19-Mar-13 6:50pm GMT

ALPHATEC HOLDINGS INC Q3 2012 Earnings Conference Call Transcript – 2012-11-05 – $54.00 – Edited Transcript of ATEC earnings conference call or presentation 5-Nov-12 10:00pm GMT

ALPHATEC HOLDINGS INC NASS Meeting Conference Call Transcript – 2012-10-22 – $54.00 – Edited Transcript of ATEC conference call or presentation 22-Oct-12 8:30pm GMT

ALPHATEC HOLDINGS INC at UBS Global Life Sciences Conference Transcript – 2012-09-19 – $54.00 – Edited Transcript of ATEC presentation 19-Sep-12 5:30pm GMT

ALPHATEC HOLDINGS INC Q2 2012 Earnings Conference Call Transcript – 2012-08-07 – $54.00 – Edited Transcript of ATEC earnings conference call or presentation 7-Aug-12 9:00pm GMT

ALPHATEC HOLDINGS INC Q1 2012 Earnings Conference Call Transcript – 2012-05-08 – $54.00 – Edited Transcript of ATEC earnings conference call or presentation 8-May-12 9:00pm GMT

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Thomson StreetEvents. "ALPHATEC HOLDINGS INC Q4 2012 Earnings Conference Call Transcript" Feb 28, 2013. Alacra Store. Dec 20, 2014. <http://www.alacrastore.com/thomson-streetevents-transcripts/Q4-2012-ALPHATEC-HOLDINGS-INC-Earnings-Conference-Call-T5011235>
  
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