Susquehanna Initiates Coverage on Orthovita (VITA) with a Positive

June 9, 2009 8:39 AM EDT

Susquehanna initiates coverage on Orthovita (Nasdaq: VITA) with a Positive Price target:$5.50.

Susquehanna analyst says, "Yesterday, Orthovita announced that it has finally received 510(k) clearance for Cortoss, its novel treatment for VCFs, making it the first FDA-cleared alternative to PMMA cement (previously the only option in VCF procedures) in this arena; we are maintaining our Positive rating on the shares. In the release, the company also disclosed detailed clinical data for the first time from its 256-patient pivotal trial, which was a non-inferiority trial comparing Cortoss to PMMA at 24 months using a composite endpoint (trial details and outcomes included below)...This represents the highest hurdle cleared to date for a company that also: 1) has a base business growing faster than any of our other covered names (sales +33% Y/Y in 2008); 2) continues to show operational leverage, which was most recently evidenced by the small $400K EBIT loss in 1Q09; 3) has ample cash to cross into profitability (likely later this year or early next, potentially more likely with Cortoss); 4) has a motivated direct OR-based sales force of almost 100 reps (with ~75% of these generating more than $800K in annual sales) focused on synthetics in very competitive markets (Vitoss and Vitagel, largely in spine fusions and general surgical procedures, respectively), and already sells to ~80% of the Cortoss target customer base; and 5) now has rigorous clinical data to support its largest potential product opportunity (VCFs in spine), and could also increase its profile as an acquisition candidate for larger players seeking exposure to novel synthetic biomaterials."

To see more analyst ratings on VITA Click Here.

Orthovita, Inc. (Orthovita) is an orthobiologics and biosurgery company, which develops and markets medical devices.

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