Piper Jaffray Comments On NuVasive Following Recent Earnings Report

NuVasive's NUVA Q4 results and most of 2011 outlook were covered last month when the company released preliminary results and guidance, leaving very few open questions as to what investors should expect going forward. That said, management provided some additional color regarding margin progression and highlighted efforts underway among the leading societies in spine, calling into question the guidelines widely used by insurance companies over the past year to restrict patient access to spinal fusion. Given the company's pre-release last month, Piper Jaffray found very little in management's comments which would justify a significant reaction in the stock. However, it is encouraged by the recent industry response to the Blue Cross Blue Shield of North Carolina coverage policy and the forthcoming guidelines under development through a coordinated effort across the major spine societies. EPS were $0.46 vs. $0.28 in 4Q09, $0.04 above Piper's estimate and consensus of $0.42. Sales were up 19% to $127.3 mil, excluding a one-time $2 mil litigation settlement, $5.9 mil above Piper's estimate of $121.4 and $1.3 mil above consensus of $126 mil. Relative to Piper's estimates, sales were stronger in Biologics, Core U.S. Fusion and OUS. Management reaffirmed sales guidance for 2011 of $525-$535 mil and provided pro forma EPS guidance of $1.07-1.10. Piper Jaffray has a $39 PT and OW rating on NUVA NUVA closed Wednesday at $28.57