K2M Group Holdings, Inc. wants more money.
K2M Wants $40 Million More
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On January 20, 2015, the company announced it has filed documents with the SEC “relating to a proposed follow-on public offering of its common stock.” According to the company announcement, it hopes the offering of 4.9 million shares will raise around $40 million.
Most of the proceeds, according to the announcement, “will be used by the company for working capital and general corporate purposes, which is expected to include the expansion of the company’s global distribution network through the hiring or contractual engagement of qualified individuals and purchasing of inventory to support their sales efforts and which may also include the acquisition of or investment in complementary products, technologies or businesses.”
The 11-year-old company netted around $120 million last May in an initial public offering (IPO). After the offering, the company’s market cap shot up to $427 million. Today its market cap stands at about $735 million.
On January 12, 2015, the company announced preliminary fourth quarter sales results. Total revenue of $49.3 million was up 16% over the previous year’s quarter. Full year revenue of $186.7 million climbed 18% over the previous year. The company is still looking to be profitable. In the third quarter of 2014, the loss from operations was $12.9 million, compared to $9.6 million for the third quarter of 2013.
President and Chief Executive Officer Eric Major said, “Specifically, sales increased approximately 20% year-over-year in both our Complex Spine and MIS businesses, and we saw degenerative sales increase by almost 30% this quarter. These results represent a continuation of our strong performance in fiscal year 2014—our first as a public company—a year in which we executed on our goal of increasing market penetration and on expansion of our innovative products. We remain focused on increasing our share of the $2.6 billion global complex spine and minimally invasive surgery markets and on driving shareholder value creation going forward.”
The company was co-founded by company Chairman and Chief Medical Officer John Kostuik, M.D., and Major.
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This is a fascinating development. In my practice we've seen similar outcomes with the revised protocol. The key differentiator seems to be patient selection criteria. Has anyone else noticed the correlation with BMI thresholds?
Great point. I'd push back slightly on the conclusion, the sample size in the cited study is too small to draw population-level inferences. That said, the directional signal is compelling and worth a larger RCT.
We implemented a similar approach last year. Early results are promising but we're still gathering 12-month follow-up data. Happy to share our protocol if anyone is interested.
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