NuVasive added a differentiated cervical disc to its product portfolio through a $150 million acquisition of Simplify Medical.
Simpify Medical developed the Simplify cervical artificial disc, or Simplify Disc, for cervical total disc Replacement (cTDR). While NuVasive has had a cervical disc that launched in 2012, its offering never gained much traction in the market place. The Simplify Disc is expcted to better position the San Diego, CA-based company in the cervical spine market. NuVasive said it is now able to address all key segments of the cervical spine by offering comprehensive, procedurally integrated solutions across anterior cervical discectomy and fusion (ACDF), posterior cervical fusion, and cTDR procedures.
"The acquisition of Simplify Medical advances our previously communicated long-term growth strategy by both expanding, and further distinguishing, our portfolio with industry-leading innovation," said NuVasive Chris Barry. "Combining the Simplify Disc with NuVasive's C360 portfolio will enable us to provide surgeons with world-class cervical technology, regardless of their preferred procedural approach. We are excited about the opportunities this acquisition creates as we work to optimize the surgeon experience, advance the standard of care, and create value for shareholders."
In its investigational device exemption (IDE) study, the Simplify Disc was found to be clinically superior to ACDF in the randomized controlled trial. The device is currently being evaluated in a separate IDE study in the United States for two-level indications, pending FDA approval.
"As demonstrated by the strong clinical data and the unique design characteristics of the Simplify Disc, we share NuVasive's focus on outcome-driven innovation," said David Hovda, president and CEO of Simplify Medical. "Together, we create a comprehensive, procedurally integrated cervical portfolio differentiated by technology and breadth. NuVasive's scale and global commercial channels will greatly accelerate the ability to bring the Simplify Disc to more surgeons and patients around the world."
Simplify Medical's technology was designed to offer surgeons best-in-class capabilities for cTDR across key performance functions, the company said, including:
- Radiologic design: The disc, uniquely comprised of PEEK on ceramic materials, allows for enhanced visualization through MRI postoperatively compared to competitive devices, a key imaging modality in spine;
- Anatomic disc heights: The Simplify Disc is anatomically designed and includes 4mm, 5mm, and 6mm options. The 4mm, the lowest disc height in the market, more closely matches the native disc height of a wide range of patients; and
- Physiologic motion: The disc design provides unique articulation which allows a variable center of rotation for each treated level and is designed to closely mimic the motion dynamics of a natural spine segment.
Ryan Zimmerman, an analyst at BTIG, noted in a report that FDA approval of the two-level indication would allow NuVasive to compete with other two-level discs currently offered by Medtronic and Zimmer Biomet's spine and dental spin-off. The analyst estimates the cervical disc market to be between $225 million and $250 million as of 2020, growing in the high single digits or low double digits.
Canaccord Genuity's Kyle Rose also weighed in on the NuVasive-Simplify deal.
"We view the deal positively and are not surprised to see this acquisition given cervical has been highlighted as a key growth opportunity for [NuVasive] and a cTDR product fills a key product gap in cervical ... The deal with Simplify further develops that portfolio, adding a differentiated cTDR option to the product bag and giving the commercial team a needed boost of new tech," Rose said in his report on the acquisition.