Algostim makes the Algovita SCS device, which is designed to treat chronic pain in the trunk or limbs. If a spinout occurs, Greatbatch said it would continue to manufacture Algovita on a contract manufacturing basis.
Frisco, Texas-based Greatbatch filed for pre-market approval from the FDA for Algovita in December 2013. Yesterday the company said it received an approvable letter from the safety watchdog for Algovita, meaning it’s set to be approved once the FDA inspects and approves the manufacturing operation.
"We’re targeting that we’ll have [the PMA] completed in 2015. We obviously do not set the timeline. We continue to be active in the steps with the FDA in following the preprescribed process and responding to questions. But right now, our thinking is we are confident it will happen in 2015. But couldn’t give a specific date or direction for what it is, because it’s still ongoing and clearly we’re beyond the timeline we originally set, which was at the end of 2014, beginning of 2015. … And that timeline will affect how we approach this spinoff opportunity here as well, because we’d do those in synchronization with each other," president & CEO Thomas Hook told analysts during a conference call discussing Greatbatch’s 1st-quarter earnings.
The potential Algostim spinout must still be approved by the company’s board, but could close by the end of the year, Greatbatch said.
The company missed expectations with its 1st-quarter results, posting lower sales and earnings than in Q4 2014, sending share prices down. Greatbatch reported profits of $8.0 million, or 31¢ per share, on sales of $161.3 million for the 3 months ended April 3. That represents a -46.3% bottom-line slide on a sales decline of -7.4% compared with the same period last year.
Adjusted to exclude 1-time items, earnings per share were 54¢, a penny under expectations on Wall Street.
GB shares were down -3.3% to $52.15 apiece in mid-day trading today.