Medical Device Daily Associate

SAN FRANCISCO — The orthopedic sector was well-represented at this year’s JP Morgan Healthcare Conference with companies of all sizes in the sector getting plenty of attention from attendees as evidenced by rooms crowded for their presentations.

Orthopedic stalwart Zimmer (Warsaw, Indiana) represented the big boys, with Ray Elliott — departing company president/CEO — promising that the company will launch more than 20 new products in 2007, making for a busy year.

On the biologicals side, Elliott said the company expects to release its DeNovo NT (Natural Tissue) product by the end of the year for allografts. And its DeNovo ET (Engineered Tissue) was launched in clinical trials for use in treating knee cartilage defects.

Of course, no presentation by Zimmer would be complete at this time without a discussion of the company’s current “it” product, the Gender Solutions knee, the first knee replacement system designed specifically for female patients.

Elliott said the roll-out for this much anticipated product was difficult since it came out at the same time as a large batch of other product roll-outs. He said the company plans to rectify this with the launch of a massive direct-to-consumer ad campaign valued at between $6 million to $7 million.

While company marketing will get the word out to consumers about the product, he said this is a type of technology that must be sold to the surgeons based on good science. “You have to go and sit down with people and take them through the science of the product,” he said, “otherwise it does appear just like marketing.”

While claiming to enjoy its mid-size status especially because of its ability to be a “nimble” company, Wright Medical (Arlington, Tennessee) is focused more than ever on its growth strategy, according to Gary Henley, its president/CEO.

He acknowledged that while the Wright had been progressing quite nicely as a public company, it had “a bit of a hiccup along the way,” particularly last year. He said the company “worked through those issues in 2006 and have returned back to the growth profile on the EPS side that we experienced in our early years as a public company.”

Among the new products that the company hopes will aid this growth are its extremities products, Charlotte knee system and its Micronail, used to repair wrist fractures.

Henley was best in talking about the company’s Graft Jacket product, used to repair tendons, cartilage and rotator cuff injuries. The Graft Jacket is one of the major contributors to growth in the company’s fledgling biologicals division.

“It’s amazing what doctors have done with that,” Henley said. He said that the product has affectionately been dubbed “biological duct tape” because of its “incredible remodeling characteristics.”

Privately held Spine Wave (Shelton, Connecticut) gave a good showing for the little guys in the sector. The developer of technologies for treating spine disorders played to a packed house hanging on the every word of presenter Mark LoGuidice, co-founder and president/CEO.

LoGuidice and John Pafford, both former Sofamor Danek executives, founded Spine Wave in 2001 in conjunction with Protein Polymer Technologies (San Diego) and Windamere Venture Partners, with the purpose of commercializing an injectable polymer for spine surgery called the NuCore injectable nucleus.

LoGuidice said that when people discuss Spine Wave products with him, they generally want to talk about NuCore, an injectable nucleus.

NuCore is an in situ curing protein with physical properties specifically designed to mimic those of the natural nucleus. And LoGuidice called it “really one of the Holy Grails of spine.”

The exciting thing about this technology, LoGuidice noted, is that it can be used in two distinct markets. The first is lumbar discectomy, the most commonly performed spinal procedure in the U.S. And it also can be used to treat early stage degenerative disc disease, a potentially even larger patient population.

He said that the company hopes to initiate a U.S. pivotal clinical trial for the Nucore ing the first half of 2008

While praising competitor Kyphon’s (Sunnyvale, California) phenomenal success with its kyphoplasty system for the treatment of vertebral body compression fractures, LoGuidice said his company’s StaXx FX system is an improvement for that procedure.

“There are a lot of clinicians who feel that there is some room for improvement in terms of a device that can more consistently restore the height of the vertebral body and that’s where our system comes into play.”

StaXx is a gun-like device that delivers the interlocking wafers used in the procedure, much he said like a Pez candy dispenser. Basically what the system does is build a stack of the wafers within the vertebral body “generating a tremendous vertical lifting force,” LoGuidice said.

Thus far, Spine Wave has completed 70 clinical cases, all outside the U.S. and is now using a second generation of the device, which LoGuidice will be used for the commercial device. The company expects to begin selling the system in Europe by the middle of the year and hopes to have a U.S. marketing clearance by the end of the year.

The company also has developed the StaxX XD expandable device, an implant that provides contolled in situ distraction of the interbody space and allows surgeons to customize the height of the device to match individual anatomy.

The XD device has been cleared by the FDA, and the company expects to launch the product in the U.S. before the end of the year.

Thus far, Spine Wave has raised two private rounds valued at $51.5 million; the most recent round was a $36.5 million round completed in February 2006 (Medical Device Daily, Feb. 17, 2006).

LoGuidice said the company would like to raise one more private round before initiating a possible initial public offering. “We’d like to get something closed before the summer of this year,” he said.