5 Market Opportunities for Small Orthopedic Companies

By Carolyn LaWell

5 Market Opportunities for Small Orthopedic Companies

We attended the Canaccord Genuity Musculoskeletal Conference ahead of AAOS’ Annual Meeting and heard from small and startup orthopedic companies that are optimistic about their ability to address unmet needs in the industry. We sat in on 14 company presentations, listening to companies focused across orthopedic market segments. Several opportunities emerged throughout the presentations, including the adoption of technology, focus on ASCs, concentration on personalized procedures and implants, the launch of registries and success with direct-to-consumer marketing.

Adoption of Enabling and Digital Technology

When large orthopedic players began rolling out robotics, navigation systems and surgical planning tools, we thought that small companies would remain focused on hardware. Our thinking was that if small device companies entered the software side of orthopedics, they would partner with other firms with open systems. Companies are proving us wrong.

Shoulder replacement companies Catalyst OrthoScience and Shoulder Innovations have launched surgical planning technology alongside their implant portfolios. The CEOs of both entities noted that their surgical planning software plays a significant role in their ability to be pure-play shoulder companies.

Life Spine is working on an augmented reality and 3D imaging system to streamline spinal fusions. “We’re trying to do a CapEx limited procedure,” said Life Spine President and CEO Michael Butler.

Canary Medical CEO Bill Hunter, M.D., spoke about the company’s focus on smart implants. Canary Medical has partnered with Zimmer Biomet for orthopedic applications, and the two received De Novo clearance for the Persona IQ knee in 2021.

The implantable sensor tracks a patient’s range of motion, step count, gait speed, etc. As more data is collected, the company plans to shift to predictive analytics to target challenges like infection and loosening. Canary’s pipeline includes applications for hip replacement, trauma screws and spine devices.

There is also a proliferation of smaller enabling and digital technology companies seeking to find momentum with open systems. OnPoint Surgical is expected to launch its augmented reality guidance for spine in 2022. They’re targeting the ASC market and the “80% of hospitals that can’t afford robotics,” said their CEO, Philipp Lang.

We also heard from THINK Surgical, which received FDA clearance for its second-generation robot in 2020. THINK Surgical CFO Paul Weiner said that seven device companies, representing 40% of the knee market, are connected to THINK’s robots. The company’s next product launch will be a handheld robotic system.

Focus on ASCs

Smaller orthopedic companies have found ASCs to be a sweet spot over the years, especially for elective trauma and sports medicine surgeries. As the hype continues around the shift of procedures to outpatient settings, small companies plan to continue to target the space.

Across market segments – joint replacement, spine, trauma, sports medicine – the presenting companies emphasized that their products are optimized for the ASC setting with smaller numbers of trays or disposable instruments. Executives also noted that they have defined sales and operations strategies to meet the needs of ASCs, and believe those processes will be a significant pivot for larger orthopedic companies.

Mark Foster, President and CEO of Trice Medical, said that as more joint replacement and spine surgeries shift to ASCs, it will expand all types of procedures performed outside of the hospital.

Concentrate on Patient-Specific Implants

Personalized procedures and implants are often discussed as the future of orthopedics. We listened to two companies seeking to make progress in the patient-specific market. They – and others in the space – believe that patient-specific implants provide better outcomes and are suited for the ASC setting due to their surgery-in-a-box approach. While patient-specific products often come with a higher price, companies note that the accuracy of the implant fit and instrument cutting guides replace the need for expensive technology, like robotics and navigation.

Bodycad thinks of itself as a software firm with the ability to manufacture devices. The company has a four- to 21-day turnaround for its custom knee implants. Bodycad plans to expand into hip, trauma, foot and ankle, spine, shoulder and elbow applications.

Carlsmed has targeted adult deformity correction in spine with its patient-specific implant, aprevo. The company received Breakthrough Device Designation from FDA, as well as 510(k) clearance for anterior, lateral and transforaminal surgical approaches.

“We take data and turn it into devices and then take devices and turn them into data,” said CEO Mike Cordonnier, noting that the company uses a learning loop to improve implants and processes.

Launch of Company Registries

Data has always been imperative for small companies looking to gain traction with hospitals and surgeons. We’ve seen some smaller players start registries to track patients receiving their devices in recent years.

Carlsmed will commence the COMPaSS registry in June 2023. Miach Orthopaedics plans to initiate the BEAR Registry in 2Q22 to follow 750 patients who receive its recently launched BEAR implant.

Miach Orthopaedics’ CEO Martha Shadan said that she expects more startups to launch registries from which they can extract valuable patient outcomes and economic data. Also, they complement Level 1 studies and cost less, too.

Marketing Direct to Consumers

Orthopedic companies noted that they’re leveraging increased patient savviness. Multiple companies talked about using direct-to-consumer marketing to drive patients to surgeons. We know that direct-to-consumer marketing isn’t new. But in attending similar conferences over the last decade, we’ve never heard so many CEOs emphasize Google ad campaigns.

This opportunity speaks to the trend that patients are getting smarter about their healthcare options. Small companies – that are unknown to patients and even surgeons – can find success in storytelling around their innovations.

These five opportunities show how small and startup companies are targeting the orthopedic market. Overall, company executives were very optimistic about the industry and the potential for significant growth in the coming years.

Carolyn LaWell is ORTHOWORLD’s Chief Content Officer.