Monday, November 10, 2008

Orthovita Q3 comments on Vitasure Intro

Michael Matson – Wachovia
Okay and then just one quick question. Can you give us the VitaSure sales for the quarter?
Anthony Koblish
The VitaSure sales were above $200,000 for the quarter. The product was launched in mid July.
Dale Provanik – Canaccord Adams
Okay and just a client of VitaSure told me that if you from the initial response you’ve seen a couple of hundred grand is pretty impressive considering what the revenue price plan is on that product. How can a contribution in this scale – do you think that you will get 50%, 60%, or 70% penetration relevant to using VitaGel and what does that 10%, what does that equate in annualized dollar rate and 20% just for above any out there?
Anthony Koblish
Well I think that you’ve got to remember that our (inaudible) for VitaGel is really around spine and orthopedics. So it is not the full Gem I [ph] hemostasis field. However, that said the combination of VitaGel and VitaSure is a very nice hemostasis to our surgery product portfolio. That is up quite well with our competitors. At the gen 1 and gen 2 products, it’s a mixed of price point approximately $200 versus upper $400 let’s say and that qualifies for VitaGel and we use them at different points in the procedure. Gen 1 products is typically used intraoperatively while the procedure is being done and the gen 2 product, VitaGel, is pretty much used at the end of procedure as you’re closing with airbrush. So it gives us a nice style of surgery portfolio. That said, I think the growth and expansion of VitaSure is going to look more like VitaGel in its early days than what the bone graft substitute platform looks like. So the nature of the biosurgery business is different.
The nature of that business is really based on getting the product into different surgery in an array of customers whereas the work of our logics in bone grafting business is more driving into a specific procedure and growing deeper and broader. So it’s a little bit of a different sales strategy and so I think with VitaGel we saw that grow a nice pace over time and really start to gain whole as it got broader and broader and broader and we expect VitaSure to do a similar type of penetration as well. But I think right now it’s too early for me to get as specific as what you ask. However, given our experience I think with VitaGel I do feel confident in the way these are rolling out and right now I’d say we’re in the learning mode and that learning is in the part where it is setback into the point where we probably got to go through a few more of the receipt back loops and cycles to see where we are and take a little bit more time. However, I agree with you. We started cold. We didn’t slip any business that was already out there, first 200K was all VITA new relationships. So I do see a great potential with that business and I do think that it will behave similarly with VitaGel over time.
Source: seekingalpha

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