Globus Medical, Inc. (NYSE:GMED) Q3 2023 Earnings Call Transcript

So that progress is occurring right now. We’ll decide probably within next month or 2 what we think the future of that will be.

Operator: Your next question comes from the line of David Saxon of Needham.

David Saxon: Maybe I’ll have a follow-up question on the integration of the sales force. I guess, how long does that take? I think you said you’re doing territories in November, cross-selling in December. So what are the next steps after that? And then which, I guess, major milestones or steps in that process do you think carries the most risk?

Daniel Scavilla: It’s a great question. So we’re doing it in 2 phases. The U.S., we’re just finishing up territory. So we’ve gone from the senior leadership into the field leadership to the territory level, and we’re just communicating that out and getting them together. We’re doing cross training in the fourth quarter for products and the availability for them as they form teams to obviously support each other, so that they would be active in doing that beginning in January. We’re looking to do something similar internationally. We’re probably say about a month behind with that, where we have the leadership defined, we’re finishing up territories probably in November, start to cross training as well in December. And I think that will probably take us into January with a little more solidity internationally in the February time frame.

Rate-limiting steps, I think, are just going to be the availability of the people to get together and train without disrupting surgeon support. We’re going to make sure that, that’s first and foremost. I would think one of the key milestones for us is the combination of our systems that will support the field and the replenishment and the ordering. We’re working on that at a rapid pace as well. And I would think that there are the 2 items that are probably first and foremost on us to make sure we get right.

David Saxon: Okay. Super helpful. And then just on the knee robot, I feel like I ask about it every once in a while. So just what’s the update there, especially around timing? Is that an early ’24 launch? And then also, how are you from about the implant portfolio and the strategy with that on the back of the new robot launch?

Daniel Scavilla: You’re welcome. I’ll answer that one as well. The new robots really progressed far. I think we’re in the process of fine-tuning what we want to do for filings. I would tell you the first half of 2024 is the target. Again, remember, we’re at the FDA’s disposal with that. But I would be surprised, honestly, if we didn’t exit the first half of the year with that. With that, comes obviously the cementless knee, which I think will be the major player there and that is well progressing on a good pace with it. I think 2024 will start talking obviously more about the joints in total. While I don’t know if given our current size with the merger, it will be a material lift. It will be nice to actually get out the door with us, start talking about it and then see it contribute in the years after that.

Operator: Your next question comes from the line of Nora Whatman of Stifel.

Unidentified Analyst: I appreciate you taking my questions. And I appreciate it’s really early, but just curious if you’re seeing any, call it, green shoots as we think about cross-selling and potential revenue synergies, for instance, any uptick in surgeon engagement or training from the NuVasive side? Just anything worth calling out? And I’ve got 1 quick follow-up.

Daniel Scavilla: I would say that that’s probably a great question. And the answer is yes. So what you’re seeing is there’s some great products that come together, whether it be the pedicle screw system with a different retractor are expandables with the lateral, different items like that. So as we’ve talked about, when we begin coming out with 1 combined portfolio, the surgeons are excited about that. They see the ability to do that. Obviously, we need surgeons to help us cross train our reps and to help spread those around. So you’re right, we’re looking to increase surgeon engagement through different paths like that. We’re also being mindful as to what products are in development for the NUVA team and the GM team and looking to make sure that they come out as a complementary approach and not conflicting — and again, working with surgeons and those development teams to do that as well.

Unidentified Analyst: Okay. I appreciate that. And then a specific question, do you need 510(k) approvals to get the NuVasive implants on the robot? Or any help on how to think about potential time lines for when that might be available?

Daniel Scavilla: All right. Well, listen, I would tell you that we’re in the process of designing instrumentation. The implants are there. We’re putting the software in place. I think we have to evaluate what that would warrant, what we’re obviously going to do what’s required. Some may and some may not depending on the extent of where we’re going with that. So we’re in the evaluation of it. Your real question, what I’m going to answer is we’re actively modifying software and making sure that there’s instrumentation that allow our systems to use the NuVasive products, and that is first and foremost with the Enabling Tech, doing it in a compliant way that makes sense is what we’ll do as the next step.

Operator: And your next question comes from the line of Jason Wittes of ROTH.

Jason Wittes: I’m just curious on sales force to synergies, things like that. I know there’s been quite a few questions on this for obvious reasons. But when do you guys think you have a handle on sort of where things fall? Is that after you’ve kind of just made our final decisions on management territories? Or is it 6 months out after that? Or is it kind of something lingers for 2 years?

Daniel Scavilla: Yes. Jason, it’s a good question. Look, like anything, you’ve got to tease out natural moves and attrition with maybe something that is a bit more because of the disruption created. Things will always be ongoing, but I wouldn’t say that because of the coming together of the merger that we would be experiencing this 2 years from now. We’ve already defined the U.S. sales force in particular, and that’s where most of you guys have your focus on all the way down and just finishing up rep levels. And so I think as we untease that and make sure that people understand where they sit and how beneficial this is to them. I would think that as we get through the third quarter and the fourth quarter through this call and into it, that we should see things settle down more.