By: Dylan Sikes - AllPennyStocks.com News

Friday, March 21, 2014

Back pain accounts for more than 13 million doctor visits and about 4 million emergency room visits every year in the United States. On a worldwide level, research firm MarketsandMarkets forecasts that the global spine surgery devices market is growing at a 5.1 percent compound annual growth rate and will hit $14.8 billion in 2017. When it comes to eliminating back pain, spinal fusion is a well-established procedure that remains the gold standard fix, although it does face challenges with some controversy about necessity, cost, method and motion restrictions that can sometimes accompany the procedure. Many of these obstacles are being overcome by minimally invasive surgery (MIS) and cutting-edge technologies that are propelling the MIS segment as the fastest growing component of the spinal surgery market. Industry behemoths, like Medtronic (NYSE:MDT) and Stryker (NYSE:SYK), are clearly the market leaders, but facing some pressure from smaller players, including Aurora Spine Corporation (TSX-Venture:ASG). The company, which has an official headquarters in Toronto, with offices in California and the United Kingdom, develops and markets innovative spinal surgery systems and devices, including the ZIP™ MIS Interspinous Fusion System, AmnioPur™ liquid allograft products and TiNano™ titanium plasma spray coated spinal fusion implants.

A new company, Aurora IPO’d on the TSX Venture in September 2013, pricing 5.15 million shares at 70 cents to raise $3.61 million for the company.

Unlike the majority of other spinal fusion techniques, Aurora’s ZIP system doesn’t use any screws and features regenerative spinal implant technologies. The company has wasted no time attaining regulatory marketing approvals and distribution of its products throughout the world. Aurora already had a CE Mark before it went public, allowing the company to market the ZIP system in Europe, with the first procedure performed in Sienna, Italy two weeks after the IPO. The global launch of AmnioPur and the first surgery in the U.S. using the multi-purpose product followed a month later.

The ball didn’t stop rolling there. On December 3, Aurora said that the FDA had granted 501(k) marketing clearance for the ZIP system and the first surgery with it, performed in Southern California, was announced nine days later. The first surgery in German followed a week later. By the end of January, just four months after the first procedure, the hundredth surgery in Italy with the ZIP system was reported. Three weeks later, the ZIP system was being used in the United Kingdom and had received Therapeutic Good Administration (TGA) clearance in Australia.

On Wednesday, Aurora said it had penetrated the Polish market as the first surgery using the ZIP system was performed at a university hospital in Poznan, Poland.

That’s a pretty impressive run of developments for Aurora Spine in six months. Of course, investors are going to want to see how this is translating in the financials. The latest filings were for the period ended September 30, 2013, as the company was just getting operations going. Revenue was understandably still minimal for that quarter at roughly $74,000. Shares has hit the market with the initial public offering and funding to get operations going (about 15.6 million outstanding now), so any comparatives to the year prior quarter is essentially a moot point. The quarter ended with Aurora having about $2.3 million in cash on hand.

Shares of ASG have climbed substantially from the IPO, hitting as high as $6.60 in mid-January before cooling back to $4.25 as of Thursday’s closing bell. The stock is still thinly traded as the share count is tight; only 2,353 shares changed hands on Thursday. Be that as it may, this is a developmental story that could be worthy of a follow-up to watch the company progress. Proper due diligence is, as always, encouraged.

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