Centinel Spine® Announces Record Worldwide prodisc® Total Disc Replacement Revenue and EBITDA-Positive Second Quarter 2023

• Second quarter 2023 worldwide prodisc^® Total Disc Replacement (TDR) revenue exceeded $17.5 million in sales—a new record—on 64% growth over second quarter 2022 and sequential 24% growth over first quarter 2023, the company's previous best quarter.
• Strong operational performance coupled with record-breaking global revenue resulted in Centinel Spine's first EBITDA-positive quarter since acquiring prodisc in December 2017.
• Second quarter 2023 prodisc TDR sales broke records by geography and by product segment—with U.S. and International prodisc sales growing 72% and 41% YOY, respectively, as well as global cervical and lumbar prodisc sales growth of 79% and 45% YOY, respectively.

WEST CHESTER, Pa., Aug. 1, 2023 /PRNewswire/ -- Centinel Spine^®, LLC, ("the Company") a leading global medical device company addressing cervical and lumbar spinal disease by providing the most robust and clinically-proven total disc replacement (TDR) technology platform in the world (prodisc^®), today announced record second quarter 2023 financial results in both revenue growth and profitability. Strong operational performance coupled with record-setting prodisc TDR revenue resulted in the Company achieving its first EBITDA-positive quarter since acquiring prodisc in December 2017. Centinel Spine's record quarterly results were driven through both U.S. and International success in the Company's cervical and lumbar prodisc TDR businesses. A key to the success in the U.S. was continued strong surgeon adoption and accelerated procedure volume of the Company's new prodisc C Vivo and prodisc C SK cervical TDR system.

According to one of the early adopters of the new prodisc cervical system, Orthopedic Spine Surgeon Jason Billinghurst, MD, of IntegraMed Spine, Wellington, Florida, "The introduction of prodisc C Vivo into my surgical practice has been a game-changer. This innovative device has allowed me to perform spinal disc replacement procedures with greater precision and provided my patients with renewed hope by maintaining, and in some cases restoring, mobility. With prodisc C Vivo, I am able to perform decompressions that, in my view, would not be possible with certain other less-constrained devices on the market. My patients are able to experience a faster recovery compared to traditional spinal fusion techniques. It's gratifying to witness, firsthand, the transformative impact this device has had on the lives of my patients."

Centinel Spine CEO Steve Murray shared, "We are pleased to have had our fifth consecutive record quarter of prodisc TDR revenue, worldwide. By our measures, both our cervical and our lumbar TDR systems are widely outperforming their respective markets. The prodisc technology provides surgeons with the only system to "Match the Disc" based on patient needs in both cervical and lumbar TDR, and we are inspired knowing that an increasing number of patients are being relieved of debilitating spinal problems with our technology. We will continue expanding the U.S. launch of prodisc C Vivo and prodisc C SK through additional medical education, equipment investment, and mutual success with our distributor partners."

Second Quarter 2023 Highlights

Second quarter 2023 revenue for the Company's worldwide prodisc TDR business exceeded $17.5 million (a record for the company), with 64% growth over Q2 2022 and sequential growth of 24% over Q1 2023 (previous record quarter). Overall growth in the quarter continues to be driven by the September 2022 limited release of the new prodisc C Vivo and prodisc C SK cervical TDR system in the U.S. and continued global expansion in the prodisc lumbar TDR business. The U.S. prodisc cervical business grew 97% in the second quarter versus second quarter 2022, while the global prodisc lumbar business grew by 45%.

Since the Company initiated the limited U.S. launch of prodisc C Vivo and prodisc SK, market acceptance of this new cervical TDR system has continued to rapidly expand, with almost 300 surgeons now using the system. Nearly 800 procedures were completed with the new system in the second quarter 2023, representing over 50% sequential procedure volume growth versus first quarter 2023. The surgeon user-base for the new prodisc C Vivo and prodisc SK system significantly expanded in Q2 2023, as exhibited by an increase of more than 50% in average monthly users versus the prior quarter. A strong majority of the surgeons that utilized the new system through the first quarter 2023 are repeat users and most users continue to originate from competitive conversions.

Strong commercial traction for the overall U.S. cervical and lumbar prodisc TDR business continued in the second quarter 2023, demonstrated by record total user growth of more than 50% since early 2022, and sequential growth exceeding 20% versus first quarter 2023. The number of U.S. facilities utilizing prodisc TDR products increased in excess of 45%, and the number of distributors selling the products expanded by over 20% versus second quarter 2022.

First-Half 2023 Performance

Revenue for the Company's worldwide prodisc TDR business neared $32 million in the first half of 2023, a year-over-year increase of more than 50%. First half growth in the prodisc TDR business was driven by record breaking sales geographically, with U.S. prodisc sales growing 56% and International prodisc sales growing 38% on a year-over-year basis. Sales across both the cervical and lumbar prodisc product segments were also strong during the first 6 months of 2023, with worldwide cervical and lumbar prodisc TDR growing 66% and 32% year-over-year, respectively.

First-half 2023 performance resulted from the expanded release of the new prodisc cervical system, as well as accelerated one- and two-level prodisc lumbar adoption due to increased user volume and broader reimbursement coverage. Robust commercial cervical and lumbar prodisc TDR traction in the U.S. was bolstered by a significant growth in both customers and distributors in first-half 2023, including a year-over-year increase of nearly 40% in surgeons and facilities using the system, and 20% growth in the number of distributors selling the prodisc technology. New surgeons using the prodisc technology more than doubled in the first half of 2023 versus first-half-2022, primarily driven by a Company medical educational program that conducted prodisc global trainings with over 550 surgeons.

Full-Year 2023 Outlook

Looking ahead to full-year 2023, the Company anticipates its global prodisc TDR business will grow in excess of 40% year-over-year. This growth is expected to significantly outpace the global TDR market, which is growing an estimated 11% CAGR and projected to remain the fastest growth segment within the spine industry (Artificial Disc Market Insights, Competitive Landscape and Market Forecast-2027, DelveInsight Business Research LLP, 2022). Full-year growth is expected to be driven by continued global expansion in the prodisc lumbar business and strong adoption and competitive share gain from the newly launched prodisc cervical system.

About Centinel Spine, LLC

Centinel Spine^®, LLC is a leading global medical device company addressing cervical and lumbar spinal disease by providing the most robust total disc replacement (TDR) technology platform in the world (prodisc^®). The Company's prodisc technology is the most studied and clinically-proven TDR system across the globe, validated by over 540 published papers and 240,000 implantations worldwide.

Centinel Spine continues to advance its pioneering culture and corporate mission to become a catalyst of change in the spine industry and alter the way spine surgery is perceived. The prodisc platform remains the only technology with multiple motion-preserving solutions for both cervical and lumbar anterior column reconstruction.

For more information, please visit the company's website at www.CentinelSpine.com or contact:

Varun Gandhi
Chief Financial Officer
900 Airport Road, Suite 3B
West Chester, PA 19380
Phone: 484-887-8871
Email: [email protected]

SOURCE Centinel Spine, LLC