Globus Medical Expects FDA Warning Letter Will Be Resolved ‘in Short Order’

Globus Medical landed in hot water with FDA over the summer in the form of a warning letter stemming from violations cited during an inspection earlier in the year. But according to an analyst report, the company’s management team expects the warning letter will be resolved “in short order.”

The alleged violations involve the company’s Excelsius GPS surgical robot and associated interbody spine and cranial modules. According to FDA, the inspection found the devices had been adulterated or were not in conformity with current good manufacturing practices.

“First and foremost, [Globus Medical] noted that it has rectified all items related to a recent FDA warning letter,” Ryan Zimmerman, a medtech analyst at BTIG, wrote after meeting with the company last week at the North American Spine Society (NASS) meeting. “[Globus Medical] feels confident the matter will be resolved in short order.”

The management team reportedly noted that the warning letter does not preclude the company from selling the system, and they believe they have rectified all items laid out in the letter.

How is the Globus-NuVasive integration going?

Globus and NuVasive caused quite a stir in the spine market last year after announcing merger plans, as investors and analysts looked at past spine deals that resulted in difficult integrations and considerable sales force disruptions. For better or for worse, however, the companies officially tied the knot about a month ago, completing the $3 billion all-stock deal September 1. The merger formed the largest player in spine after Medtronic.

Related:For Better or For Worse: Globus and NuVasive Tie the Knot

So naturally, BTIG’s analyst took the opportunity at NASS to probe the management team about the integration.

“In terms of integration dynamics, [Globus Medical] feels good about the progress of the integration, it has thrown a lot at its reps, and believe most items are behind them and can focus on selling,” Zimmerman reported.

He noted that the company intends to keep much of what NuVasive was good at, such as training and education, but at a more appropriate cost structure. The management team also commented during the Q&A that the integration has gone much faster than anticipated, Zimmerman wrote.

The analyst also reported from the Q&A session that Globus appears to be warming up to NuVasive’s legacy neuromonitoring business.“Initially management didn’t think highly of it, but they’ve been able to get a lot of data and analytics from the business and believe that they can make it more effective (and more profitable),” Zimmerman wrote.