Shoulder Innovations‘ President Matt Ahearn and Chief Commercial Officer David Blue present Shoulder Innovations at the 2020 Emerging Medtech Summit.
Transcript
David Blue
Good afternoon.
I’m David Blue. I’m the Chief Commercial Officer
for Shoulder Innovations, and Matt and I are going to present Shoulder Innovations to you today.
So let’s talk about the team real quick. This team, I’ve had the privilege to work with for the last three decades, and this team is very special because not only is this team focused on medical device innovation, but it’s also focused on a shoulder arthroplasty.
If you go back and look at what this team’s done for over 30 years, we’ve launched the first modular shoulder system in the world.
We launched the first reverse shoulder system in the world.
We launched the first stemless shoulder system, and we recently just launched the first software planning system.
So we’ve been connected with a lot of what’s going on in shoulder arthroplasty over the last 30 years.
In fact, three of our partners probably have 150 patents between them, and they represent probably 50% of total shoulder arthroplasty done in the world.
So what have we been working on for the last several years?
It’s been called the InSet Technology, and it’s really designed to attack the clinical problems.
And that’s really what we do when we innovate.
We innovate to truly go after the clinical problems that are there, so looking at the clinical problems, the number one clinical problem in total shoulder arthroplasty is on the glenoid side, glenoid loosening.
That’s our socket that’s in our shoulder for those that don’t know that, and we’ve absolutely been able to successfully not only launch this but prove this.
And we’ll show you some evidence here in a little bit, but we’ve improved the mechanical stability.
We’ve improved this through a minimally invasive approach, and the results over 12 years have been outstanding.
The second area is in bone preservation, bone resorption, and we’re doing things to try to preserve bone because there’s a lot of bone loss that we end up having to deal with overtime.
And we do that through, again, that innovative approach on our design, and we’ve done this with having the shortest stem on the market for our humeral side.
And then, if you go down to the bottom of the slide, we’re really inventing with the end in mind as we relate to a seamless platform of technology.
We have one system, one technique, and even one tray now.
And we’ll talk about that in just a second, but we’re really trying to drive out the economic efficiencies and the economic benefits. And we’ll cover that here in a little bit.
The fourth area is in the complexity of the glenoid on the reverse side, and in the next couple of months, we’ll be rolling out our reverse system as well.
We’ll have five FDA cleared products through our system that attacks a large portion of the market.
We’ve done this very intentionally with a micro-commercialization model, and we’ve gone very intentionally deep in a few pockets of the country.
And we’re really trying to work on adoption, repeat users, and believers, and that’s what’s really important, as you guys know.
And we’re also driving through the VAC analysis.
As one of the biggest challenges in medical devices, getting things through the VAC, the Value Analysis Committee, we’ve been able to successfully do that.
So where’s our clinical success? That’s really what’s important, right?
We’ve got, now out 12 years, with our glenoid technology, and we’ve got papers through the JSES that’s published at one year, three years, five years, and ten years.
So it’s really nice to be able to have that clinical evidence.
We talked about the one tray just a second ago.
I think we underestimated the power of what this one tray really has done in impact, the healthcare, and the cost. Because as a rep 25, 30 years ago, for me, dragging in 10, 12 trays to an OR is really kind of the norm, and we’ve been able to attack this whole shoulder arthroplasty system with one tray, having four instruments for the glenoid, and four instruments for the humeral side.
And when you think about the competition bringing in six trays for our one tray, that really does make a big impact.
And I’ll tell you why.
Here’s a picture I snapped the other day. This is a typical rep now. This is a three-quarter-ton pickup truck, and if you look at the tray on the left, that’s our tray.
The five trays on the right is the competitive company that’s equivalent to do exactly what we do with one tray.
Now, the blue wrap sterile drapes that we’re all familiar with, those cost the hospital roughly $150-200 per tray just to wrap and sterilize and process to get ready for the case, so our one tray can have a financial impact of about $600-800 before we make an incision.
So it really does make a difference.
Matt Ahearn – President
Great, thank you, Dave.
My name is Matt Ahearn. I’m going to give you a quick snapshot of Shoulder Innovations today, so we currently have 12 team members on the team. R&D Commercial Operations leading the business.
From a technology perspective, we have a deep and broad IP portfolio.
We also have been, as David mentioned, very successful getting products cleared through the FDA.
Four to date, and our fifth here, we’re anticipating in the first quarter of this year.
We’ve done over 12 hundred cases to date, and the interesting part is those 12 hundred cases have all been done with 30 instrument sets.
So we’ve been highly, highly efficient with our assets.
From a manufacturing and supply chain perspective, we’ve partnered with vendors that can help us scale and scale rapidly when we’re ready to scale rapidly, companies like Orchid, Thortex, Kyocera.
And finally and last but not least, we built this business on less than $9 million of capital.
So we’ve been super capital efficient as an organization.
So one of the strengths of our team is innovation, and I would say rapid innovation is the real strength.
In the first quarter of last year, we launched our humeral short stem system, and as soon as we launched that, we began moving on towards our augmented glenoid system and our reverse system.
Our augmented glenoid system was cleared by the FDA in the fourth quarter of last year, and we’re actually going to do our first cases next week.
Our reverse system was submitted to the FDA just before the first of the year, and we’re anticipating clearance of that in the first quarter this year. And we’ll do cases in the second quarter.
With the augmented glenoid system, the reverse system, and our humeral short stem system, we’ll cover 85% of the elective shoulder surgery market.
And commercially, that equates to a full bag, which is a key inflection point for our business.
After that, we’re going to move on to a prospect glenoid system and a stemless system to continue the innovation.
So our product portfolio positions us really, really well in the market.
Our goal, it is to be in the upper right-hand quadrant, or the leader quadrant, in the shoulder replacement technology market.
Over the last 12 to 18 months, we’ve continued to push further and further and further on the innovation curve, and as when we get to the reverse system launched in the second half of this year, all that’s going to prevent us from getting to that upper right-hand quadrant is capital, and we’re going to raise capital either with a VC or partner with one of the large strategics.
And we’re going to push up in the upper leader quadrant in the second half of this year, for sure.
So when we think about being a leader in this space, we believe we can be a $200 million business revenue-wise over the course of this next decade.
We have the technology platform to make that happen, and we have the relationships to make it scale.
We currently have 75 surgeons utilizing our technology today, our anatomic system, and all we need to do is convert half of those utilizing our augmented system and our reverse system, and we’ll have a $25 million revenue run rate, headed into 2021.
So that’s absolutely a great foundation which to build upon to build that industry-leading company.
So we couldn’t be more excited about what we’ve accomplished to date, and the direction that we’re headed.
We’re bringing really innovative and disruptive technology into a large market, a billion dollar market that’s growing at 8-10% a year.
We have a team that has deep shoulder as the main expertise.
As David indicated, they have their thumbprints on a lot of the technologies that are in the market today and know where that market needs to go tomorrow.
We’ve done over 1200 cases to date with outstanding clinical outcomes, and we have 10 years of clinical data backing up our technology and our technology platform.
And last but not least, our technology platform is going to lead the market for the next decade, so we’re really, really excited about where we’re headed and we’re more than happy to answer any questions in our little breakout room as we go forward.
So thank you very much.