TranS1 Inc. (TSON) has reported preliminary revenues for the fourth quarter of 2009. Revenues are expected to be approximately in the range of $6.2 million to $6.3 million, lower than the company’s previous guidance of $6.7 million to $7.2 million. The company expects to report its full fourth quarter results in late February 2010.
TranS1 has lowered its guidance on revenues due to concerns in the market regarding reimbursement for its AxiaLIF procedure. The company is addressing these issues through continuous education and support resources for its current and prospective surgeon users. TranS1 is also negotiating with the Centre for Medicare and Medicaid (CMS) and different private payors to settle these issues.
TranS1 is a medical device company focused on designing, developing and marketing products that use its proprietary minimally invasive surgical approach to treat degenerative disc disease affecting the lower lumbar region of the spine. It presently markets two single-level fusion products, AxiaLIF and AxiaLIF 360°, and a two-level fusion product, AxiaLIF 2L, in the United States and Europe.
TranS1 has been badly hit by the reimbursement uncertainty surrounding its AxiaLIF procedure. We believe expected near-term reimbursement changes would make the pre-certification and administration process time-consuming and could create some pressure on revenues. However, the company has already addressed this issue and hired three reimbursement specialists to minimize the administrative burden.
TranS1 faces significant competition from larger companies in the spine market including Medtronic (MDT), Johnson & Johnson (JNJ), Stryker (SYK) and Zimmer Holdings (ZMH).
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