Globus Layoffs Resurface Integration Concerns

Globus Medical and NuVasive caused quite the stir last year by merging in a market that remembers all too clearly the integration ghosts that have haunted spine deals in the past.

Now, five months after Globus and NuVasive completed the $3 billion all-stock deal, reports of layoffs at NuVasive's former headquarters campus in San Diego, CA have resurfaced those integration concerns.

According to a Jan. 3 notice filed with the state of California, the company is eliminating 157 positions across the campus including administrative, sales, legal, marketing, quality, and engineering jobs, effective March 5.

Earlier this month, Globus announced preliminary fourth quarter revenue of $615.5 million (beating analyst expectations of $602.5 million) and full year 2023 revenue of $1.567 billion (beating analyst expectations of 1.554 billion).

The Audubon, PA-based company also forecasted 2024 revenue to fall between $2.45 billion and $2.47 billion, which was below analyst expectations.

"Overall, we think results do not dissuade concerns that the integration still poses some risk in 1H24, but as [Globus] distances itself from the merger closure, we think they can begin to overcome these fears with solid results as they posted for 4Q23," Ryan Zimmerman, a medtech analyst at BTIG, wrote in a January 10 report.