Wright Medical Group, Inc. CVR (WMGIZ)

[fredman]

Latest Update on Augment:

I would like to give a brief update on the status of our appeal for Augment Bone Graft. We submitted the agreed upon amendment to our PreMarket Approval application for Augment Bone Graft yesterday. Although it took us a few weeks longer to file the amendment than we originally anticipated, we believe the extra time allowed us to work collaboratively with the FDA and to gain a more precise understanding of their expectations for the content of this amendment.

As previously communicated, we expect the Office of Device Evaluation to issue a determination on whether the PMA is approvable no later than 180 days after the submission date. It is important to reiterate that there is no guarantee this PMA amendment will result in an approval of Augment Bone Graft. We will continue to keep you informed through normal communication channels.

We are looking forward to the resolution of the Augment PMA amendment. While we have no way of knowing the final determination of the FDA, we believe the PMA amendment that we submitted this week has excellent science behind it and supports the safety and efficacy of this breakthrough biologic.

Our global Biologics business grew 16% on a constant currency basis in the first quarter due to growth in our International Biologics business driven by sales in China as we open sales channels and continue the growth of Augment Bone Graft in Australia.

Christopher T. Pasquale - JP Morgan Chase & Co, Research Division
Okay, fair enough. And then on Augment and the PMA Supplement, I'm just wondering if there is -- are any other milestones or communications we should expect between now and the end of that 180-day window or will the decision on approvability be the first we hear? And could that clock stop if the agency comes back with a round of questions and there's some back-and-forth or is that 180 days all-inclusive?

Robert J. Palmisano - Chief Executive Officer, President and Director
Yes, I think the 180 days is the time frame to look at. We do have a -- we have ongoing communications with the agency. We have a face-to-face meeting with them scheduled for 45 days from yesterday to make sure that everything is on track. But I don't think any news will come out of that because they're not going to cite any -- we're just going to be -- it's more inside base book kinds of stuff that go on at those kinds of meetings. So I think that the news will be in 180 days. I have -- again, I've said this often, I've no way of handicapping what the agency may or may not do, feel very good about the science behind our submission. I feel good that the extra time that we took, working collaboratively with the FDA to really in a much more precise manner understand what they're looking for and what it would take to be approvable is all beneficial. Having said that, again, I have to give the caveat I have no idea how this is going to turn out.

Raj Denhoy - Jefferies LLC, Research Division
Bob, just quickly on Augment. I think you made -- most of your public commentary has been pretty cautious. I think you've mentioned that you're still pretty far apart from the agency on the product and its approval. But you've also made some comments around the margin about how you've been encouraged by their willingness to sort of reconsider the framework under which they're looking at the product and what the really the questions are that the product is trying to address. And so I guess, I'm curious if you have any broader thoughts on where this sits at this point? I mean, is there reason to be optimistic at this point? Or are you truly still very far apart on this?

Robert J. Palmisano - Chief Executive Officer, President and Director
Well, I think that, as I said earlier, I'm not really in a position or -- nor do I want to handicap what the agency might do. It's a peculiar environment that they're in. What was -- what's interesting is don't forget is that the agency came to us and suggested that instead of a Dispute Resolution Panel, which is an adversarial, time-consuming process, is that they would be willing to entertain an amendment. And that was at their initiative. Then we spent a lot of time interacting with the agency to decide or to frame what exactly that amendment would look like and what it would take for the agency to -- what type of data the agency -- data and science the agency is looking for, for us to be successful with this. And what we were able to gain through that process was really a much more precise understanding and an agreement with them as to what it's going to take. So for that point of view, we feel good and we feel good about the science in our amendment. However, is that -- and then the other part of that is that I don't think that -- when we got this non-approval letter, I got on the phone to talk about this and said I was shocked about it because what the questions that they raised in the non-approvable letter really caught us by surprise in that they weren't really part of the study that we actually did. I think we now we have a really good understanding and they -- between them and us, and us and them as to what that data needs to look like and what they are looking for. So we're -- so from that point of view, I would say that I think that's all good is that we have an understanding, we provided them with data, we provided them with science, we think that the data and the science supports the safety and efficacy of the product. Now it's in their hands and they will deal with it and we will interact with them. But I feel good about not being in the DRP, I feel good about being in the amendment process, and I feel good about the cooperation that we've had with the agency to get to this point.

Raj Denhoy - Jefferies LLC, Research Division
Okay. So would it be fair to characterize it as you've sort of come to an agreement in a sense on what you need to give them and you believe that what you're giving them satisfies it, but of course, there are still the vagaries of what the agency is going to do?

Robert J. Palmisano - Chief Executive Officer, President and Director
Yes, I would say that, absolutely yes, that's my point of view.

Matthew O'Brien - William Blair & Company L.L.C., Research Division
Just a follow-up on the last points you were making there, Bob. The delay that we saw in the filing of the PMA Supplement with the agency, was that more a function of them saying to you, a little more data here is what we need, a couple more film, a bit more film? Or was it just an administrative change that they were asking for specifically that caused the slight delay?

Robert J. Palmisano - Chief Executive Officer, President and Director
When we agreed to the amendment, there were a couple of items that were "to be negotiated." And that's what we -- and that did take a couple of weeks longer than we thought and that had to do really in kind of 3 areas, Matt. It had to do in terms of an analysis of the existing radiographic films that would demonstrate that the product -- that bone grew through the graft and we were able to provide that. Secondly, it had to do with making sure that we had a statistical validation of the methods so that when the data went in is that we had outside people or statisticians validate the process. And thirdly was the addition of a second reader of the radiographic film. So all 3 of those things took those extra couple of weeks. But all 3 of those things, I think, in my humble opinion and I'm not a doctor or an FDA person, strengthened the submission.

Matthew O'Brien - William Blair & Company L.L.C., Research Division
Okay. So that was them coming back to you specifically and saying, if you do something along these lines, that's what we'd like to see?

Robert J. Palmisano - Chief Executive Officer, President and Director
Yes, generally, that's right.

Source: http://seekingalpha.com/article/2179493-wright-medical-group-management-discusses-q1-2014-results-earnings-call-transcript