OFIX - Earnings call transcript Q3 2021

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Operator

Good day, and thank you for standing by. Welcome to the Orthofix Q3 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to of conference Investor like Huerta, to now Director Senior Relations. would hand over the Alexa I Please go ahead.

Alexa Huerta

Thank you, Third Call. Orthofix Welcome to operator, and good Quarter morning, XXXX everyone. the Earnings

Chief today Officer, Financial Rice. Jon. then I'll safe our call pass and the Doug the with statement on Jon Serbousek me President Joining and harbor Executive start it Officer, Chief to are and over

in are those and make will statements facts do During will we any as forward-looking such forward-looking risks revise beliefs, statements such plans, statements and today's our making X or on on not The XXXX. statements We earnings not statements. cautioned assurance statements forward-looking we any statements we there forward-looking Investors place contained goals is objectives. involve occur. will be and as uncertainties. are this today of November undue other expectations guidance than no or call, beliefs forward-looking that undertake statements based All reliance call strategies, any expectations, of update to are on historical such our including to provide matters about that obligation the

well X, as for ended September the quarter XXXX the XX, in could to different additional year the on in the our XX-Q we this XXXX be statements actual December factors ended from morning disclosed us cause the the filed made heading Form for future. SEC materially by risk make include November Risk Factors Some and forward-looking call XX, factors that the results under XXXX Form filings XX-K as

at Orthofix documents, these of contact in Texas. Lewisville, copies office my need you If please

to measures that financial order matters as today's understand short-term determined to Jon. over to in Please this will We for financial financial refer long-term a wish call, results. financial of measures. measures our press non-GAAP financial At on these various US to the addition, XXXX results US and release point, with to the review to reconciliations supplement we call may properly our third these our in quarter GAAP will investors to non-GAAP trends, today's refer accordance In I GAAP. believe announcing turn

Jon Serbousek

Welcome today's conference provide strong of each Alexa. third the the provide initiatives constant then above performance. our Starting I'll Thank of I with joining against an $XXX.X of XXXX on On our the will over reported questions. call. Doug call you, our everyone. review perspectives on XXXX our you line each XXXX basis. currency for results strategic close with our quarter who call, our I'll financial total over balance third quarter made update third million performance, progress Thank both quarter for our and before revenue a opening the handing will X% update. growing in to we've was before of quarter

the we complex experienced procedures the During regions. staff impacts Southeast, and South-Central quarter, namely hospital hospital Mid-Atlantic each of in negative and US and the elective restrictions geographies key on shortages

and able these XXXX double-digit orthopedic in global businesses. grow growth our to despite we implants by highlighted challenges, both were spinal COVID-XX However, to relative

restrictions. we'll that product and includes in that our Our international was beginning the made made these performance of investments COVID continue service remain therapies diversified growth make and to development, we initiatives and commercial recover excellence. channel sites areas the have progress all in disruptions quarter our in in to the quarter, we third our and footprint well as against operational solid portfolio by confident from aided as of impacted by less COVID includes Despite

COVID-XX large was the or spine million, Physio-Stim in the decrease quarter largely XXXX. Now bone quarter trends were XX% nonunion the compared increased categories. let's of growth quarter affecting a in of related part BGT, for spine performance our complex long The to are with turn $XX.X product in reversal were offset by overnight third of decline procedures, BGT bone to These therapies restrictions receiving our therapy which of each Starting X% in procedures restrictions saw was quarter the of down our the a by patient the the growth the result for we for population bone last somewhat positive therapies. fractures. of a quarter. The healing of sales

channel are segments. trauma in Our benefits investments these nonelective commercial yielding

XX% reported Implants, to XXXX. spine constant which fixation international fixation sales. currency disc and the were led includes and basis reinvesting US was growth ongoing on to as success MX driven by motion over artificial Internationally, This was our US, delays. by following efforts. a of a continued Spinal mix education coming a revenue training and distributors stocking preservation, and result disc attracting driven driven by users cervical Moving spine of distributors online In was revenue new our by COVID MX in and up compared both primarily gains growth the new existing primarily

procedures the driven adoption distribution mentioned to down and new given portfolio, Biologics Turning these by COVID were impacted geographies hospital the of compared technologies. strong of restrictions offset and surprising US are procedures, of prior. stays our procedures, a percentage customers decrease where increase This not products key biologic are was The early by multiday decrease requiring our in partially by used affected was was to elective the XX% XXXX. new large revenue new that complex

restrictions moving following from to on basis, on XXXX. a from due over sales up delays. COVID international to Orthopedics basis and the Global a increase and elective was distributors in XX% reorders Lastly, stocking our The XX% primarily rebound were reported currency markets constant COVID international business, the

lengthening training acquisition a the also over over from trained, system, and saw with surgeons sequential XX% solid encouraging growth During quarter, the technology a we quarter XXXX, third trends this FITBONE, XXX contribution of since over of the second the platform. with limb physician

in our Wayne various a finance, international of roles, He from update our executive businesses. to experience orthopedic through Burris XX XXXX. share, and including initiatives, Roche he Board join retirement North US his brings on CFO of to Mr. Directors. of we and how MedTech Burris XXXX an providing are over of Before key spent at want much I years career number his of excited diagnostics served America in from Diagnostics, where pharma in have

someone financial excited to to years leadership him and and add working for are with experience, business forward his We look we with to come.

innovation Now to product, first moving initiative our differentiation. and

acquire gaps by develop unmet and this XXXX, During XX designed Mg instrument, and efforts SI to the we progress stabilize market improving the product in second address to we Set the quarter, our and our to and high-growth voids, Orthopedic expanded Within expansions portfolio, bony January orthopedic we initial or or additions channel new launched and solutions during surgery fill categories, the with in underway scaffold procedure quarter. made expanded XD commercial care Implants, marketplace. of Biologics, injectable solid the Since needs Spinal further have MIS to launching Spine nonstructural products, trauma implant in offering which joint. will our key osteoconductive sacroiliac we an development. into on segment, Within I our include Firebird products during launch applications. solution fracture Opus full touch our our compress now differentiated market

to to these as US distribution Orthofix strategic US QX, we both impacted hardware to our on working these compared to our predictable focused channels our partners, revenue. third grown that define and Implants as dedicated biologics, to XXXX, third and and quarter BGT and being channel. as current Spinal for channel which mostly generated regions. Biologics X% Implants the COVID channels was our are US compared over heavily partners and we distribution initiative, as this Revenue despite of one-third make the of Biologics Orthopedics in commit partners related Orthopedics, carry strategic Spinal For when quarter In

we in to date. in channels ongoing is made have steady progress this these While investment initiative

final Our execution. operational is initiative

priority. Given global of the reoccurrences remains top our recent COVID-XX, chain regional supply our

nimble processes encourage as our Our product with innovation. goal possible, to is structures efficient make and that company as

over with review results COVID-XX Our in up in and success with the for global to that in will the We're improvement in and continuous supply continued as execution. and growth value long-term geographies, while quarter. highlights to Doug? for momentum future of Orthofix. intend forward efficiency, to Despite turn macro execution. very on microchips excited the kept environments, return of With keep with of operational the needed Therapies our the have the we've our the be made innovation, disruption pleased light operational approach always financial a as yearend. to Doug build chain, moving certain we am that, Bone I'll call improvements changing in maintaining our performance. our operational of our groundwork adapt devices There I securing, Growth within in transformation, build we we to laying supply

Doug Rice

other the some covered today's details for by due additional some and quarter reserves. Thanks, sales in mainly year due US good decrease sales financial Jon, XX% many costs, earnings restrictions will up earnings discuss the to sales net as basis, the information today's on growth provide third as XXXX, reflecting quarter net quarter that due a increase revenue, strong XX% the a compared prior quarter In earlier. reported quarter and were the period. when total global on million over XXXX. Jon third US, margin reported shortage for procedures and mentioned, in Jon total short-term up of quarter third reconciliations to the sales Starting non-GAAP limb over FITBONE microchip our on million to in of offset to as to are XX% morning, our further to International MX-C in and in $XX of stocking growth $XX non-GAAP disclosures. the of primarily measures. then measures lengthening net X% to X% of XXXX, and sales with the mix financial regarding results down well was the release elective were $XXX I distributors. somewhat everyone. decreased offset basis The please a compared as Because inventory from refer system XXXX, non-cash constant on basis, our and procurement Gross our into third by total mentioned hospital million, call were of was of sales currency the of third electrical the the

expected XX% XX% the well sales XXXX as of in of was primarily of an major of a third quarter as from in timing did take XXXX. three place the quarter in-person the For as XX%, the short-term XXXX, reflects well Sales in the as the which be to the expect and gross global as approximately the mix of an full sales microchip impact continued to changes a our shortage. increase third increase marketing in were up of expenses. of XX% microchip quarter in XXXX costs that third now net result not increase XXXX result in year The margin expenses of in we tradeshows travel

line a As the GAAP sales with net in and anticipated, in marketing of event seen pre-COVID we still of our In in historical has the spending travel spend sales XXXX average in year-to-date G&A third period. levels. with in with as was more we sales and third our of XXXX, approximate spending expect of channel. quarter and XX% return the expenses line prior in right net commercial line year invest to as were quarter our further XX.X%

new As travel third expenses spending measures succession freeze R&D the of quarter related offset match a and in the suspension, in by reflected spending for expenses a increase pause a cost net including integration, to reflects XXX(k) in XXXX with efforts. investment GAAP in EU several The reminder, levels XXXX. third savings as of associated as development, sales X% clinical product from quarter up studies support FITBONE well expense, period. costs our XX% compliance prior MDR the spending to increased year

efforts invest to as, ramp such studies, product robust to a in both our two-level up our continue study and clinical will MX-C rotator pipeline and differentiation continued Spine Orthopedics. to spend innovation indication in drive and We and cuff build organic

basis a as R&D our to adjust which and to have XX% sales clinical including for, of certain approximately we compared efforts causing points well net as percent to non-GAAP outpace of expense impact as, EBITDA compliance the net about in-person. spend in in expenses, is sales of directly this sales to Adjusted R&D be as we significantly to timing million tradeshows expect MDR in reminder, development third the a related the product XXXX to revenue As financial million the related spending an EU third XXX growth our $XX.X XX% investments quarter near-term. in driven GAAP decreased to within increased by return trials, quarter of of to in Due now made XXXX our we metrics. $XX.X the or marketing of they R&D

our investments in EBITDA our mix costs. the reduction temporary Our We with increases the with so these second is quarter increase in in and sales have and also the increased changes line COGS call, during all short-term our microchip mentioned expected in expectations. of adjusted

primary we benefit XXXX benefit. as the of tax, tax tax for were recognized, factors in before period income taxes recognize XX% financial not GAAP or not of XX% of The third income as acquisition-related well Now quarter same we income GAAP affecting to for, rate related for turning quarter as, loss of foreign to of subsidiaries compared certain which tax a XXXX. remeasurement, before in rate the purposes to had tax for taxes losses of income the the the expenses income $XXX,XXX did tax

have expenses that certain XX% no our tax use changes adjusted For tax continue benefit. which operating acquisition-related normalizes rate, GAAP and effective long-term our results, losses for law non-GAAP as we to

of reported quarter of of certain of of compared increased $X.XX share in for microchip third XXXX, the to GAAP loss innovation when items per adjusted to per due travel to compared effective third tax primarily per was spend. quarter earnings XXXX. The non-GAAP quarter and to spend increased for of For XXXX. the per After share using third ,and R&D global the rate, was earnings $X.XX in decrease earnings adjusted the by third organic expenses, tradeshow and $X.XX XXXX driven an our short-term the the drive marketing and long-term differentiation shortage, increased we share for GAAP normalizing as $X.XX quarter adjusting share of tax

XXXX. continue XX the of cash, the held were our related travel cash implementation our the as instrument which the flow, being our and to the $XX cash operating cost sets CapEx to million. expect Consistent to our the no was flow, provided $X decreased of the secured We of compared position an of prior $X.X activities free freezes We only cash QX the the is of decrease to investments period, reduction as to $XX of the under million $XX $XX growth to of Regarding prior in revolving in operations third complete the XXXX the million instruments to inflow was the substantially inventory the of $XX.X initiatives such the early by conferences about guidance in Capital the quarter of be from the $XX.X operating quarter expenditures the million CapEx be in strong define $XX.X suspension borrowings XXXX. the in liquidity Net to $XXX million maintain end flow in plans. down we third $X million to repayment at million still XXXX million of third future cash and a quarter Medicare year million recoupment balance year with of the of due was for XXX(k)-match spend we range The due the the compared next of inflow second $X.X of of year. timing Medicare a savings from due to facility. senior dates to Advance support million for this XXXX XXXX repayment XXXX. We projects. now at quarter. during inflow currently down million inflow which virtually. to expect by million from second as million with end September and an $X.X primarily quarter million have quarter, is timing quarter the primarily $XX We credit minus outstanding deployment commenced last compared XXXX quarter quarter certain in over an Advance The

over the our support Kinetics decreased Spinal As of the several XXXX our spending free to now MDR in flow product as to as I'll compared due Jon. compliance sales has in and anticipated, call to innovation Medicare investments significantly the items including XXXX increased the turn cash well milestone back additional repayment our efforts. growth on future the EU and Advance, channels, payment, to

Jon Serbousek

Thanks Doug.

remain demand MX-C, surgeons grow motion and we MX-C, a Looking these remain as the comprehensive each of MX-C portfolio. by on to to growth attract expanded for confident growth three foreseeable US to share existing on of launch future. I'd new milestone over evident drive take market disc, trained a for that as allow the like surgeons growth us to in well market spinal and with utilization quick including FITBONE, remainder we ability technology to From near-term X,XXX surgeons the onboard to XXXX, update our MX's we both artificial expand which Starting perspective, our cervical XXXX the our and recently global we progressing drivers are surpassed preservation by the as and remains continues on for provide and expansion focused to arms. highly innovative additional to drivers. since trial, investigational initiate XX,XXX are ACDF have US actively sites implants. We the interbody clinical study and MX-C of MX-C, continue Sites the concurrent enrolling indication X-level expect track. control support

kicked We patients access will evidence that a over MX. also off and X,XXX real-world support our body in bolster of of study evidence recently clinical

near-term driver key second FITBONE. growth The is

strong third compared Early in the made limb In first US, FITBONE we is implanted which patient outside differentiator adult with for are the and other September, located for to labeling, We no quarter in the of of and FITBONE announced surgeons a with the pediatric the opportunity pediatric lengthening third FITBONE has. trained tibia. majority interventional early US since million key its the of and as growth femur solution contribution acquisition, $XXX,XXX have progress system with a quarter commercializing the $X over demand revenue has quick whom XXX been XXXX.

expect of accelerated pediatric adoption clinical are current more as the and the surgeons to we and FITBONE performance system, surgeons see for use Given the options limited available trained.

and near-term of our now driver technology and and spanning key third printed portfolio. titanium interbody technology XD design, surface offerings PEEK, one incorporate to we XD The in materials. portfolios industry titanium bone the we device. grow that the have most into porosity Overall, growth and Nanovate with our leading is interbody through Technology comprehensive optimized printed All designs innovative, the believe PTC allows

see technologies the expandable in accelerated CONSTRUX seeing FORZA XD cage performance TLIF of in new our cliff continued we adoption expect Mini which titanium our these of interbody are XP cervical to product, focus printed We strong future. with

In addition our periods. select near-term we business will of long-term the we growth segments medium to the growth that and of believe number opportunities, have high-priority also exciting drive over

The first, growth is market. expanding our the stimulation bone commitment to

The second, spinal the is deformity. platform expansion lengthening of the FITBONE from technology limb to

as areas expansion is the spinal Biologics correction. of of updates launch fixation key offering. focused posterior last, initiatives. to Third, portfolio of of highlight want our support two cervical, in is BGT column our expansion I products. MIS, portfolio the and partnership the and anterior new deformity part The on biologics of platform IGEA And our progression these our

quarter, commercialize devices US. As portfolio a entered a announced IGEA during the stimulation second in of to partnership we into with the

part is expected surgeons half our second our our fractures technologies. biologics, we've recently offering of portfolio of and use the procedures. a approval XXXX. The a fractures nonunion complement our expand with leader of and approval PEMF to comprehensive biologic and spinal for FDA fractures. is current us regenerative have ultrasound the pulse healing to bone product a application release healing during fresh treatments, for in market of growth nonunion spine on PMA that initial focus the orthopedic a therapies bone goal will to solutions AccelStim As technologies bone products and positioning as Within this, for and this the of submitted Upon low-intensity healing therapy,

of have Strip, partnership support only segment, offerings. additions buoyed orthopedics we we we fiberFUSE recent hardware also bolstered will top growth will Biologics and which of bone MTF portfolio, our set MG launched the which in our with and spine filler Opus drive meaningfully help With line believe Biologics, incremental the of pull-through our but not

shifting Now to guidance.

on We since last approximately top patients. innovative continued of solutions please business the for million, to short-term, year of In range assumes question-and-answer now and between we and to tax range commitment US experienced, be concentrating disruption do our work, continue hard This to non-GAAP FX against I'd $XX this to patient-centric transformation, which of already mission. and $X.XX the pressure gratitude, With only enduring in Despite that, continue long-term $X their thank expect to to million would products share not and like the we to our expect the adjusted with to beyond. headwinds rate across impact includes the million COVID-XX made the with revenue executing session. their to be providing to million have for Operator significant per EBITDA all long-term but For last $XX guidance line now seasonality on the the portions our like $XXX goals and team adjusted care I our procedures quarter of $X.XX and certain expect so that markets. to modest we in our our lines. full physicians throughout $XXX transition our progress and and due of an update. open closing year delivering a worldwide adaptability of of resiliency, We rate range earnings to using in is XXXX, the to be European increase million XX%. COVID in in expected

Operator

Thank Stifel. you. with question Your [Operator Instructions] Mathew comes from Blackman first

Mathew Blackman

mix reflecting Good COVID quarter the results? And Thanks how to headwinds? there questions. taking out my is start morning, way much to impacted how volume-based maybe for three there have versus a to on tease let's call that everybody. a kind Maybe I headwind of much also of was it is way question. quantify XQ

Jon Serbousek

you me. are -- seeing that to is to the And base rate. rate macroenvironment What else single the the is double-digit mid volumes we mid far this Single-digit as volume marketplace. the for same much we're look Jon. question. as excuse Matt at in those high-digit very in Yes, Thank basically everyone is the

only area as we our that procedures, our technology or We long-term, which but what for the large there. we saw surgery site those not the greater adapt procedures. or same-day volume our on saw bring in as forward the are ASC on that far with more Biologics the in application the restrictions in and activity hospital so increase multilevel we And impacted BGT business

COVID of So type and the procedure it's a mix impact. story between

Mathew Blackman

persisting should that. right. the so as know don't staffing but half then appreciate comment follow-up recapture headwinds? about on about willing the played into fourth of then And it fit COVID deferred I bleed what's how out, of think And guide sort that I will Is sort if you're how And All of through a to the us cadence? we of how help does have procedure if XQ I think we Just on just with quarter one October product. first baked think headwinds into and that. some XXXX?

Jon Serbousek

Yes.

cases. those views revision cases surgeons to we patients are cases, do the cases to that and provide there. to and those our The take which to multilevel Let those me to come impact into still those saw quarter and with with be August of reside started care how for. COVID back cases, into with ourselves. it of going start we're September cared We've October accommodations Those see the We We it forward. comes reallocation it procedural COVID it those and want patients want the those impacts peaked the larger half towards out those fourth want know impact. believe and to taken hospitals and more we're September. it through When

into we seeing regions in they're upon as heavily lifting regional know the states there some were some because in hospitals certain northern will the more there. quarter. come that's are are the And some far as third we've are. being in So how dynamics of that out they highlighted COVID. We're be US of discussion other open a reemergence back there also also dependent impacted more How --

stability COVID basis. region-by-region, seeing of of more and more bit good cases news little setting So to we've so the those markets. it's seen of predictable that markets a going be a The case-by-case international in international we're in business the a a level more

forward look accommodated our So in as we we've those in view. through dynamics quarter, the

Mathew Blackman

just sort have I much. us primarily we this what kind think could I'll XXXX you as of AccelStim? appreciate XXXX so on it. of And sneak maybe of that. the addressable opportunity market All segment remind Appreciate -- in. impact And growth? Could right. with about one and it last Thanks beyond opportunity

Jon Serbousek

looked Yes. around you, all us. with at half market launch of but far think we'll $XXX in the deal market up the on in US the Matt. were when we'll of based AccelStim Thank the that second we million this And the variabilities submission we for XXXX it's the as we know prediction a we FDA. look a so what as far at as have our That's and works, I how in FDA as we portfolio good opportunity. going as that

well we with it's XX% nonunion with we quarter a that and go uptick after highlighted as channel as Physio-Stim in care. as at fresh saw in fractures dealing an nonunion another that of as far nonunion And distribution care strong care. can portfolio we remarks in BGT. our as looked that very a have And where We activity piece we the

Mathew Blackman

much. so you Thank

Operator

comes Your Jefferies. Anthony next Petrone from question with

Anthony Petrone

everyone doing hope Thanks well. and is

question question product-specific of I'll First sort a a then would be questions. couple just go into of macro

And so of but go supply of then also still through maybe chain. the kind just over hospitals just this kind and three certainly at shortages is headwinds. of going we If staffing Jon which those could quarter, themes Delta,

then hearing a And Orthofix? couple this You a supply anything may quarter. We're a that of the be note bit And shortages. deeper have lot I'll on product-specific about of Maybe Delta. chain impacting then on spoke or on staffing that questions. little may not

Jon Serbousek

of it. about we and the Delta, surgeons I there, The Delta. We And to we gradually more and there Delta are side patients see mean, hospitals these for they're the hospitals provide Sure. coming the in patients, talked that Thanks to want COVID is key Anthony. care opening basically back. that up the thing are we're And -- care patients. these see still

own. their away. do better will come. not go people that So They're Those on not getting

there dynamics So the be months in they're come XXXX play next and out how month, and out. on will back into over two dependent how those they

we surgeon Regarding visiting was believe point. high shortages, number the cases, before. to the staffing volume very in We will had a of a us, give I doing you they're he real. I said, real-life I'm back and

However, last, those. would that's morning at until in now P.M. takes start because going where in the long I at A.M. finish me it how and don't X:XX to X:XX typically the to know afternoon, X:XX I I'll end

of staffing fact there's of well comes I that's burn but of as to and and money can some a can those. that nurses country is locum basically hearing go and of are out go transportability many those But to shortage willingness staff. the what make do tenens, play Those and the different different type are basically the different there, do. the shifts So the patients And well. where in as parts through lifestyle. essentially of those seeing also of things into staffing We're that two the do there's anecdotal, cases to there, to we're -- that country they in are the that used I parts

make we as the that chain, deal highlighted, we only we supply. supply we with all but always as sure other have on microchips as and adequate focus not materials far Regarding

and touch back, needs are us. sales correct we've our time adapt to so appropriate products where can we in the when basically to the put sure that products basically might the spent have there inventories our front actually come adequate out that occur, supply for those cases surgeries. working sure chain teams, address any with mapping And make increased make of all and those also the we'll so We've are

Anthony Petrone

if of in the you questions on terms another on a And indication there's dynamics Maybe And for just MX if that like relates use anything just I you on the looks with crystal any Q-over-Q ball, -- quarter. queue. a long product-specific on then it mean, particular could the MX, and quarters? specific headwind how of adoption. little staffing. hop IDE can it transient, share or the X-level it bit helpful. I'll perhaps it do just you back your think mean, in own record is as Thanks. then That's couple then I a And follow-up Maybe quick is lasts? maybe

Jon Serbousek

been taken some of regionally staffing on also people have is saw staffing some will from that just turnover to There's staff. nurses tell that systems as fill nature and have early new to to either we've hospital you it's they and I have we retirements that will ball funnel with down the in nurses it hospital and it. as those Crystal of though because It's so of comes find far -- for. the that it the we variable, things hearing basically track not rooms

give that with a It for can't two So UK. published nurses was I'll we doing years. the quarters. job accommodate a that you the it XX,XXX they're for great you struggling they're a trying for They're it's looking quarter or point it. to tell over have whether sure. next I new in four

basically and process. So an refuel that's to they're educational trying that

that think why being we have So that's systems and map those done of a little out the some But part there. the cases now are reason data right I been all stressed of at. the look we

far cadence as that stayed to new as surgeons. -- MX, cadence as looks what And continued Regarding like far continual MX. as attract is a continue it we've we on

ability. that motion to We only compression basically out six its continue MX of there want track that features. for degrees all surgeons of the It's device has do to natural

And naturally down a it's it's surgeon, and to it natural disc. like a so unique to it looks appealing because comes what

we So track surgeons. those

on the cases, them, multi because that once as surgeon we track well. track fact, users, they also, we Additionally, we become whether uses in

users, And only on also that's hospital that to environment to surgery, we've in time in been continue in the good only because nice, COVID MX so use use same-day not ASC a continue also helped been has but first able product. not basically and those that we're lift but seeing environment. become through us

On the X-level really adding focus key that. good we're in progress sites for us. That's to a study, making

doing to basically And to also and ACDF we'll that for we're database a but in add study so we'll the the sites that only continue we'll not have to collect use future. continue with the patients enroll MX, patients

Operator

Ladenburg Jeffrey Your Thalmann. comes from with next question Cohen

Jeffrey Cohen

Good questions. the morning. Thanks taking for

question as follow-up study, what's launch? the and on Anthony's look filing Just as does a to anticipation like your to current timing commercial that on or MX what far

Jon Serbousek

a energy to putting initiated which question four good and study that if in the traditional late basically it's July we in five-year for Jeff. study. Thanks prospective behind. We It's randomized our we're a enrollment, on window, accelerate

we as before I can and and map So real-world as Europe that's four that look that highlighted. our horizon to of we at range five-year in the we evidence it together we part would note cases out, put as it plan far there. I throughout that do multilevel

in we our evidence, track the with also because Europe to going great bolster patients real-world as So we're Europe and well. IDE in results have those

at is current market one MX And and the basis it we in we items have so, there. relative future and those for we're standard want going of to the indication to with as be put look continue benefit and we this

Jeffrey Cohen

Fantastic.

And of the to the the as the enrollment study opposed US. out What's outside some of of some coming breakdown? that is US

Jon Serbousek

US the coming the is U.S. from the of IDE All enrollment for X-level

out where a the collect evidence outside bolstered have overall just per treated se bolsters with to bolster with impact That study evidence. to it two-level study evidence have it's but real-world doesn't IDE us US. our MX of portfolio The We our patients already second clinical for we're that study going that MX. of a real-world FDA been study data allows

Jeffrey Cohen

it. far got submit for And That's I did helpful. What as does PMA that. you like look timing? the then that AccelStim, for as

Jon Serbousek

in to to have highlighted, months approved months that. window now And a submissions approval. three be and the Yeah. could And it Putting the basically typically from we or Avoiding project FDA. in could secondary it than reviewed PMA second PMA questions, market basically be to have reviewed submission to be longer round be of seven from six, and did anywhere -- XXXX. to that's We submit we XXX-day the for any a set questions. questions, as

Jeffrey Cohen

it. me, Got lastly how there? channels could looks Europe look external the you outlook and fixation, And for how and specifically those then for about talk

Jon Serbousek

fixation. for Europe. external different. I in keen on US, it's trained couple lab building of little trauma specifically application. mean In One and Just in strong ankle were in specifically here the and fixation It's surgeons one fixation there's area, in fixation, today. foot right the Orthopedics external now, points of only on external a but business Charcot areas. our our of a for Charcot, patients, the in not just those a real interest those XX today, used in in external skills I There's Europe, our they a in it's most will being patients you different broader tell get in also

our deformity rings use for we'd lengthening so, And activities. and TL-HEX

our and external of we those, Galaxy attractive product are And Europe And We a Galaxy Galaxy also proceduralize for fixation. surgeons and those parts other very world. shoulder a in there's use so ankle. for the procedures

area. excelling And team year in fixation this that so the in really is Europe, external

Jeffrey Cohen

it. my Got taking questions. for Thanks

Jon Serbousek

Jeff. you, Thank

Operator

next Your question Sidoti with Jim from Company. Sidoti & comes

Jim Sidoti

for morning, thanks and Good Hi. again the taking questions.

to First one is distribution. regard

you laying that's distribution about You by today Biologics you you've the how of to a going past impacted all couple job in a over over really have good been months COVID where Spine next little the the Fixation what and on think products and can did XX the talk But and and Stimulation. out you new years? made that's changes bit XX

Jon Serbousek

channel and key Distribution of the our areas. for areas Jim question. drive investment one is thanks

we volume fixation Orthofix. people so, And and go regions regions we an the being are organization strategic Spine their want a build products In build in broadly as Orthofix for we're them to break Orthopedics to all And only our distributors. not specific use doing but to little those US strategic OUS. will in it me initially, biologics to in of for in looking business. looking products. bring but our Let both to of will Strategic distributors and our bit in then business those US as more the and we're distributors far invest US bring more commit and to that down our committed

of track so who subsidiaries. by orthopedics had daily the only also and the spine for and we We the basically we continual effort this US, use week leadership them but We two And engage here Outside to it there's of leadership combination looking US. distributors not the also track basis. it. our were a in a

are managed the And so company in those those distribution areas invest we areas. we so invest in in areas and reps continue to subsidiaries. sales Europe large to Those in and our are continue

As of up different not well go want may a as we that to to parts world the distributors set subsidiary. to

of our that sales we is area can talent So basically bringing sell a portion a array products. focused distribution keenly channel broader management have on or where and our an it broader

Jim Sidoti

add, more to regards headwind helped that And has has distribution? in you COVID a or been of

Jon Serbousek

that far they're would an I to a where jump -- COVID to distributor little individuals organization. in into situation maybe But don't relationship at it's this where the gives as be build a new and may build minus. say with a as to to to it they'll bring change those been have begin their it's convert business. a trust to plus and want XXX% a Because has to bringing individuals. and in your Distributors is business that ongoing COVID neutral, and situation us talk not at products more with slow it to a environment, those time because a same new or process have have they bit time, of long-term they satisfied

industry. have and They the great have experienced seasoned team. throughout We a relationships

on are daily monthly we a And relationships and working conversions so those building on making basis. those to

Jim Sidoti

the then And me one last is for investments. on, strategic

dollars on you million remind shopping Can new that is? me several strategic involved deals what you investments. out what a just else that? that or is calling year for in You're exactly Is

Jon Serbousek

both in features also Orthopedics the and Spine as organic business the business. side the have inorganic strategies. and I We building And highlighted key on in organic some the as far of

tuck-ins. that view deals with we could we basically look deals channel we at for And that, bring our the technology we On expanding side and midsized it could as previously at be looking I well. far we that, couldn't consume But not looking were complement our look external we're because as bigger portfolio stated inorganic, actually for as them. existing

Jim Sidoti

more people question is to similar that likely been COVID? it are or process with result And COVID of has sell hindered, as a possibly

Jon Serbousek

right I now. I and the a case bit think were people there to sell. don't think the that's little in year first may wanted panicked that have

are people proud it. and high quite very are valuations the of that think I

and variable. time actually does companies and to they more team the on at before their these But mature work a them that I these little we to of day, with companies great see, deals have to deals. And know it's these the allow then does think get now at a transact. and and diligence it right they -- basically new want end looks

that And process commercial good so forward space. to we going that in-house also our being we we our active a here. with teams in And product and And have combine teams. look

Jim Sidoti

you. Thank Great.

Operator

question next David from comes Your Turkaly JMP Securities. with

David Turkaly

and mentioned can Thanks. you at I that is segment you morning. just fracture fresh Hi. AccelStim, million curious all? was or for Good that non-unions, The $XXX

Jon Serbousek

fracture It is low-ultrasound. with non-union. and it's LIPUS And fresh

David Turkaly

your it view your today addressable market the of sort that's that's correct? much of of ultrasound sits market, sort is probably what the of doing? as guess So So maybe larger, is Exogen but

Jon Serbousek

that. We to expand. that Yeah. -- whole market actually is think potential for raising BGT David thanks has that the areas have

that think I focused the ultrasound so fresh that's investing is expand. as $XXX nonunion. here. And fracture million is market reason But highlighted AccelStim we're why we that will

non-operative. If done we our you the had and is the in that think of office. the lift It's PhysioStim in reason part dynamics it's the today about and

and of And the some go have to OR, revised back it's in to back where good so now gone go ahead operate. opportunity ultrasound be you the and patients a may those try before

a the So we're it's avoids I fracture some good opportunity a to from firm second fusion a for there. traffic that fracture. a surgery seek them patient. standpoint, it And think seeing in And for

David Turkaly

versus And just But at those to they're Maybe you when be your the I are answer PEMF I there? your devices similar. guess, PMA don't but thoughts you very that. data what look I that know ultrasound work? of apples-to-apples, think maybe could not how there sort -- will about, will

Jon Serbousek

very is source decades. energy a developed we over proprietary that process have and The very PEMF basically is different

And so it is our mainstay.

have We spine. clinical our in of all data

We have data. our nonunion

well. That have. from going steer at of be there's that not and have part license to is portfolio fresh robust expand away that all. technologies And explore as with of is that the fracture so to we not IGEA at opportunities in to the and market other only us basically portfolio to we're that agreement ultrasound going The AccelStim put focused AccelStim out we

David Turkaly

Got it. Thanks lot. a

Jon Serbousek

Thanks, David.

Operator

now questions. to the further over call I Jon remarks. closing time, this Serbousek there will At are no for turn back

Jon Serbousek

Thanks with Operator. we're And learning call. the Thanks day. I'll the that I you call. And your making. progress joining Have wonderful thank close appreciate more a about in interest And much. for Orthofix. the very everyone

Operator

and participating. Ladies this call. for concludes today's gentlemen, conference Thank you

disconnect. You may now

Orthofix Medical (OFIX) 5 Nov 212021 Q3 Earnings call transcript