Medical Device Daily Executive Editor
When folks start talking about their health, there's a pretty good chance back problems of all sorts are a big part of the conversation.
And, as panelists for an interesting session titled "Showing Some Spine – With Innovation" during last week's healthcare conference sponsored by RBC Capital Markets (New York) indicated, medical product companies are attacking those problems with a wide array of approaches.
The webcast session ranged widely, beginning with presentations by four firms operating, so to speak, within the spine surgery and biomaterials space, followed by drilling down into more specifics for growth of the individuals companies and the sector itself.
The latter included observations such as those of Peter Wulff, CFO of Alphatec Spine (Carlsbad, California), who said that company's major focus is to build on its core business, with a specific eye toward "products addressing the aging spine," terming that "an underserved market."
Up front in that effort is the OsseoFix Spinal Fracture Reduction System, an under-development product eyed as "the new standard for the treatment of vertebral compression fractures."
The OsseoFix system features treatment results that involve creation of bony channels during implant deployment and retention of bone within the implant, promoting cement "interdigitation." The company says the implant is designed to maintain fracture reduction throughout cement delivery and "has potential to provide enhanced ability for vertebral height maintenance."
Wulff said Alphatec has a substantial presence in Japan, with some 15% to 20% of its total annual revenues. The company has just moved into Europe this year, he said, terming its presence thus far as "in the nascent stage."
However, OsseoFix already has the CE mark, and he said it "will be a gateway product for us in Europe."
Speaking on opportunities within the spinal sector overall, Alphatec's Wulff was clearly a big cheerleader for the space within which his company operates. "Spine is a very exciting place to be in," he said.
Gerry Carlozzi, executive vice president/COO of Integra Life Sciences (Plainsboro, New Jersey), whose company is involved in neurosurgery, orthopedics and surgical instruments segments, said it sees particular growth opportunities in the orthopedics space.
It created its Integra Spine business this past August via the acquisition of Theken Orthopaedics (Akron, Ohio), a maker of spinal fixation products. That business is being integrated into Integra as Integra Spine.
Carlozzi noted that both Integra Orthobiologics and Integra Spine are seen as businesses that can grow 18% to 20% a year. The Orthobiologics business, whose foundation is the collagen ceramic Mozaic Osteoconductive Scaffold, a bone void filler, was buoyed by the acquisition of IsoTis (Irvine, California) in the latter part of 2007.
"The thrust behind the acquisition of IsoTis was acquiring its distribution channels," he said. That included a 300-person sales force, "feet on the street" selling its demineralized bone matrix (DZM).
"Now we have both synthetic and DZM, to give us a comprehensive product lineup," Carlozzi said.
Noting that the company sees growth opportunities in its core orthobiologics business, he said Theken was primarily "an R&D company" that was developing "high-quality products." Now, he said, "Integra has added its sales and marketing and distribution experience, giving us strong opportunities" for that business.
"Our core business covers about 40% of the U.S. market," Carlozzi said. "So we see opportunities to expand the domestic market. And Theken had no outside-U.S. sales, so we see opportunities there as well."
Tony Koblish, CEO/president of Orthovita (Malvern, Pennsylvania), described his company as having a sales force of 100 focused only on orthobiologics and orthopedics supplies.
"This business has a lot of momentum," he said, "and we feel it will continue to have momentum for the next several quarters."
Citing the company's Vitoss Scaffold product, he said the synthetic bone graft substitute for the repair of bony defects in the spine, extremities and pelvis posted a 40% growth in sales in the most recent quarter.
That growth was driven, he said, "by the maturity of our sales force ... we're starting the break through and see growth in this market."
Vitoss Scaffold guides the 3-D regeneration of bone in the defect site into which it is implanted and is resorbed as new bone forms.
Overall, Koblish said, "We're on track to continue our sales growth [with Vitoss] and drive our loss down."
Then comes Cortoss, a bone-augmentation material presently undergoing FDA review. Cortoss is intended for use in the treatment of compression fractures of vertebral bodies and in orthopedic procedures where bone screws of fixation devices cannot be sufficiently tightened or have stripped and lost purchase.
A 510(k) was filed for Cortoss in 1Q08 that included one-year follow-up. FDA indicated it wanted to see two-year clinical follow-up, so Orthovita provided a portion of that in September and is expecting to deliver the remainder in March.
U.S. product approval is anticipated late in 2009.
Koblish said that with the sales gains being posted by Vitoss, the company "should be close to break-even about the same time that Cortoss launches," meaning that much of the revenues generated by that product "will drop straight to the bottom line."
Doug Evans, COO of Kensey Nash (Exton, Pennsylvania), also was all about opportunities.
Kensey Nash's business is built upon outlicensing of products, with biomaterials and various cardiovascular segments as its two areas of operation.
"We work with other companies, using our technologies to develop products," Evans said. He cited Orthovita, Biomet (Warsaw, Indiana), Medtronic (Minneapolis), St. Jude Medical (St. Paul, Minnesota) and a number of other firms as key partners.
Noting that about 4 million devices a year are built centered on its technologies, he said fiscal 2008 revenues were some $80 million and will grow in 2009.
Evans noted the company's work in extracellular matrix technologies, noting Kensey Nash's development process currently is focused on developing materials for hernia repair, with the first product for that market due out next year.