Dive Brief:
- NuVasive on an earnings call Tuesday afternoon pushed back the timeline for its Pulse robotic system for use in spine procedures for at least the second time.
- The San Diego-based medtech announced a delay in February after beta testing revealed the need for certain hardware and software changes. The company now expects disruptions caused by COVID-19, including challenges with hiring, to push FDA clearances to the summer of 2021, as opposed to in the first half of that year, and to have the first-in-human use of the robotic applications in 2022.
- News of the delay came during NuVasive's second quarter earnings call, with the company reporting a 30.3% decline in sales to $203.6 million, in line with preliminary financial results released two weeks prior.
Dive Insight:
NuVasive is looking to add to its toolbox to compete in a growing robot-assisted spine procedure market also being targeted by Medtronic, Zimmer Biomet, Globus Medical, and in the future, likely Stryker.
"We believe that the spinal robotics market is significantly underpenetrated, and view it as one category in capital equipment that could fare well despite the impact COVID-19 has had on healthcare systems' future capital budgets," analysts at Needham wrote in a note to investors following the call.
NuVasive is not alone in experiencing delays to plans for robots during the crisis. Medtronic said the pandemic limited engineers' access to its in-development soft tissue robot. And unrelated to COVID-19, Johnson & Johnson disclosed last month it lengthened time to market for orthopaedic and general surgery robots.
"COVID does give some cover in delaying adoption of competitive robotic systems, but the pushout is a setback," a Jefferies note to clients said.
NuVasive CEO Chris Barry told investors the company is "looking for additional opportunities to bring the development timeframe forward, as robotics is a key priority for our imaging, navigation and automation strategy."
"We'll know a lot more about the robotic application over the next three to six months," Barry added.
Analysts at SVB Leerink called the delay expected, which they said may have contributed to the stock's underperformance in recent weeks. NuVasive's share price has dropped 16% in the last week.
"We think it will be paramount that NUVA come to market with a navigation and robotic platform within the next 1-2 years to stay competitive in a segment where robotics and navigation are clearly gaining surgeon mindshare and where others will continue to innovate."
CFO Matt Harbaugh said the company's X360 system for lateral single-position surgery, another one of NuVasive's technologies integrated with Pulse, "continues to be a key driver for the business" as deformity and complex surgeries return.
