Wright Medical (WMGI) Reports FDA Approvable of Augment Bone Graft, Lowers FY14 Sales Guidance (StreetInsider)
Wright Medical Group, Inc. (NASDAQ: WMGI) today announced that its BioMimetic subsidiary has received an Approvable Letter from the U.S. Food and Drug Administration (FDA) for its Premarket Approval Application (PMA) for Augment® Bone Graft. The approvable letter indicates that FDA determined Augment® Bone Graft to be safe and effective as an alternative to autograft for ankle and/or hindfoot fusion indications and is approvable subject to customary preapproval facilities inspections.
Robert Palmisano, president and chief executive officer of Wright Medical, stated, “Today’s positive news on the approvability of Augment Bone Graft is a major milestone that paves the way for commercialization in the U.S. and further underscores our strength in Biologics. Augment will provide clear benefits to patients and physicians and is expected to be a significant catalyst and meaningful new future growth driver for our business. We will work swiftly to address the inspection requirements set forth in the approvable letter and expect our U.S. foot and ankle commercial team to be ready to launch immediately upon final approval.”
Augment® Bone Graft would be the first clinically proven protein therapeutic to come to the U.S. orthopaedics market in over a decade, offering an alternative to autograft in ankle and/or hindfoot fusion procedures, which translates into an estimated market opportunity of approximately $300 million annually in the U.S.
The combination of two components, recombinant human Platelet-Derived Growth Factor (rhPDGF) and Beta-tricalcium phosphate (Beta-TCP), is key to the product candidate’s activities. rhPDGF-BB is intended to provide the biological stimulus for the in-growth and proliferation of osteoblasts, cells responsible for the formation of bone, while Beta-TCP provides a framework or scaffold for new bone growth to occur.
Palmisano continued, “The success can be attributed to everyone involved in the clinical trial, especially the study investigators and coordinators; our Augment R&D, regulatory and clinical teams; our partners and suppliers; and most importantly, the patients who participated in the first prospective, randomized study comparing Augment Bone Graft to autograft.”
The Company will work with the FDA to coordinate any preapproval inspections. Assuming satisfactory completion of this activity and receipt of a final approval order from the FDA, commercial sale and distribution of Augment® Bone Graft can begin in the U.S.
Dr. Christopher DiGiovanni, lead U.S. investigator for the Augment® Bone Graft North American pivotal trial and Chief of the Foot and Ankle Service of the Department of Orthopaedic Surgery at the Massachusetts General Hospital, said, “Ever since the first patient was enrolled in the pivotal trial in 2007, my fellow investigators and I have eagerly awaited the day when Augment Bone Graft would be available to U.S. surgeons. I believe Augment will become a valuable new therapeutic option as an alternative to autograft in ankle and/or hindfoot fusion procedures, especially as it offers, amongst other things, a clear patient benefit by avoiding secondary surgical sites for the harvest of the autograft tissue, which can result in prolonged harvest site pain in some patients.”
An investor presentation is available on Wright’s website at www.wmt.com in the investor relations section.
Third Quarter 2014 Revenue Results
Net sales from continuing operations totaled $71.3 million during the third quarter ended September 30, 2014, representing a 24% increase as reported and 24% increase on a constant currency basis compared to the third quarter of 2013.
U.S. foot and ankle revenue grew approximately 28% including the Solana Surgical and OrthoPro acquisitions. International revenue grew approximately 37% on a reported basis and 36% on a constant currency basis. Total ankle replacement sales grew 25%.
Palmisano said, “Our third quarter results, excluding total ankle, were negatively impacted by softer than anticipated results in our core U.S. foot and ankle business and in our international business. The rate of progress in our U.S. business is slower than we originally anticipated, and we have already taken steps to improve our sales execution by increasing focus on our core product categories. Additionally, we anticipate a more meaningful contribution in the coming quarters from sales reps and products acquired earlier this year. In our international business, demand remains strong but product mix has fluctuated, which has made supply planning challenging. Late in the quarter, we were unable to fill some international distributor orders, which resulted in unanticipated backorders and a revenue shortfall. In addition, currency rates moved negatively during the quarter. Accordingly, we are updating our revenue guidance for the year to account for these developments as well as any potential distraction related to today’s announcement regarding our transaction with Tornier.”
Palmisano continued, “We saw improved momentum in the U.S. exiting the third quarter and believe we have all the necessary ingredients for success. Our core sales drivers remain in place, including continued gains in U.S. foot and ankle sales force productivity and positive contribution from additional sales reps, acquired products and new product launches, in particular our INFINITY total ankle replacement system. The U.S. foot and ankle market is still strong, and we are confident we have the right products and strategy to achieve our growth goals. Our focus going forward will be on improving our execution to realize our full potential.”
Outlook
Based on its third quarter 2014 sales results and recent developments, the Company is updating its full year 2014 revenue guidance to be in the range of $298 million to $302 million, representing growth of 23% to 25% from 2013, compared to previous guidance of $308 million to $312 million. The Company plans to update its full financial guidance on its third quarter conference call, which is currently scheduled for November 5, 2014, and its previous guidance is no longer valid.