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The spine market has been active over the last few years with consolidation, enabling technology and motion preservation devices driving much of the action. A few companies are well-positioned to leverage market dynamics and advance their strategies in the $10 billion spine segment. Below we present seven companies that we think have exciting opportunities ahead.
- ATEC Primed to Benefit from Peer Disruption
- Augmedics Equipped to Bring Tech to Masses
- DirectSync Surgical Gets Breakthrough Designation
- Premia Spine’s PMA Twenty Years in the Making
- Relievant Medsystems’ Intracept Procedure Gaining Traction
- Xtant Focused on Motion and Acquisitions
- ZimVie Seeing Payoff from Turnaround Efforts
ATEC Primed to Benefit from Peer Disruption
With $462 million in revenue expected for 2023, ATEC is about to notch its fifth consecutive year of growth better than 20% and impressive 41% CAGR between 2019 and 2023. A focused, procedure-driven approach fueled its meteoric rise, and now the company is building a compelling digital ecosystem with EOS and the recently acquired REMI robot. As large, diversified orthopedic companies stumbled in the spine segment, ATEC readily took market share.
The integration between Globus Medical and NuVasive is likely to free up some reps and distributors even if things go extremely well. Spine integrations rarely do. The recent leadership changes at Orthofix and the resulting uncertainty could make it a less attractive landing spot for these reps, funneling even more opportunities toward ATEC.
Augmedics Equipped to Bring Tech to Masses
After nearly three decades on the market, navigation for spine surgery only has an adoption rate of 20%, a percentage that has remained stagnant for years. Usability issues, like having to look away from the patient or interrupted lines of sight, weigh heavily on the cost-to-benefit ratio for today’s navigation systems.
Augmedics initiated the U.S. launch of its xvision Spine augmented reality guidance system in 2020. The company remained active in the years since, raising more than $133 million across three financing rounds. The latest Series D round brought in $82.5 million and will support Augmedics’ rapidly expanding U.S. footprint and platform enhancements to drive mass adoption. The company also picked up digital assets, including the HOLO Portal Surgical Guidance System, from the collapse of Surgalign.
DirectSync Surgical Gets Breakthrough Designation
The company received Breakthrough Device Designation from FDA for its patient-powered smart spinal fusion device in May 2023. The implant harvests a charge from the patient’s natural walking motion that powers small pulses of DC electrical stimulation to promote bone healing. FDA has reviewed the company’s preliminary data and determined that the DirectSync Surgical interbody device may provide a more effective treatment of an irreversibly debilitating condition than the current standard of care.
Proven electrical stimulation therapy could significantly reduce healthcare costs associated with failed fusions. DirectSync Surgical estimated that spinal non-unions incur about $6 billion in incremental healthcare costs, with spinal fusion re-operation rates at 20% at the 11-year mark. The designation marks an important milestone for the company as it raises a Seed Round to get to first-in-human studies.
Premia Spine’s PMA Twenty Years in the Making
The Total Posterior Spine (TOPS) facet joint replacement system received FDA premarket approval following rigorous testing, including an Investigational Device Exemption (IDE) study to confirm the safety and efficacy of the system. At two years post-op, the system outperformed fusion in treating grade 1 degenerative spondylolisthesis with stenosis, becoming the first implant to receive a superiority claim over lumbar fusion.
But after such an arduous journey to approval, Premia Spine isn’t in a rush. The company’s focused rollout plan included 37 sites, 10 physicians with cadaveric training and three U.S. sales managers. Premia’s next big focus is the issue of reimbursement at the center level and surgeon level. “We have to make sure that the foundation is built strong and soundly. We’re in no hurry to move fast. We want to be successful and laser focused,” said Premia Spine Founder and CEO Ron Sacher.
Relievant’s Intracept Procedure Gaining Traction
After more than doubling its revenue from 2021 to 2022, Relievant Medsystems kept up its momentum this year with a series of funding, milestone and coverage announcements. The company estimates that the vertebrogenic pain market encompasses five million patients in the U.S. and is worth up to $30 billion.
Relievant closed its $50 million Series G financing in April 2023, just a few weeks before it announced the 10,000th patient treated with its Intracept procedure, reportedly the only FDA-cleared treatment for the relief of vertebrogenic pain. June brought favorable national coverage for Intracept from Cigna Healthcare for 19 million Americans. Relievant Medsystems followed that up in July with the launch of its next-generation Intracept Access Instruments.
Update: During the writing of this article, Boston Scientific entered a definitive agreement to acquire Relievant Medsystems for $850 million plus additional performance-based milestones, with close coming in the first half of 2024.
Xtant Focused on Motion and Acquisitions
The company changed its leadership team in mid-2019, tapping Sean Browne as the new CEO. Despite the pandemic, the new team returned Xtant to growth in 2021 after six years of decline. The company’s slightly above-market growth accelerated in the back half of 2022 and has since been bolstered by consecutive moves to acquire substantially all hardware and biomaterial assets of Surgalign.
Acquiring sub-scale companies in attractive adjacencies is a key strategy for Xtant moving forward. “We remain diligent in our approach to both tuck-in and transformational acquisitions,” Mr. Brown said. “Our primary focus will be on the assets that bring the three Cs: capabilities, capacity and cash flows. With both our Coflex and Surgalign deals, we feel we have hit on all three Cs.”
ZimVie Seeing Payoff from Turnaround Efforts
The early 2022 spinoff from Zimmer Biomet left ZimVie with a large market and a few differentiated products, but plenty of baggage. Years of acquisitions at Zimmer Biomet left a spine division with a redundant and cluttered portfolio, including 26 pedicle screw systems at one point. The separation process was complex, as well. “Separating out a company is far more complicated than integrating one,” said ZimVie Global Spine President Rebecca Whitney. “It took more than a year to take out spine from the DNA of Zimmer Biomet. We found all these places where we were very much entangled.”
Since then, ZimVie has done significant work in streamlining its portfolio and forging a unique identity. While those moves caused double-digit declines in spine revenues, the company is starting to see some traction with its key products outside of fusion. It scored key reimbursement wins for both Mobi-C in France and Tether in the U.S. Cervical disc replacements are underpenetrated in the European market, creating a growth opportunity for ZimVie.
Sometimes it feels as though change comes to orthopedics at a glacial pace, but the last few years have felt particularly eventful in spine. Consolidation, enabling technology and motion preservation devices are driving much of the action, and we think these seven companies are some of those most likely to benefit.
The spine market has been active over the last few years with consolidation, enabling technology and motion preservation devices driving much of the action. A few companies are well-positioned to leverage market dynamics and advance their strategies in the $10 billion spine segment. Below we present seven companies that we think have exciting...
The spine market has been active over the last few years with consolidation, enabling technology and motion preservation devices driving much of the action. A few companies are well-positioned to leverage market dynamics and advance their strategies in the $10 billion spine segment. Below we present seven companies that we think have exciting opportunities ahead.
- ATEC Primed to Benefit from Peer Disruption
- Augmedics Equipped to Bring Tech to Masses
- DirectSync Surgical Gets Breakthrough Designation
- Premia Spine’s PMA Twenty Years in the Making
- Relievant Medsystems’ Intracept Procedure Gaining Traction
- Xtant Focused on Motion and Acquisitions
- ZimVie Seeing Payoff from Turnaround Efforts
ATEC Primed to Benefit from Peer Disruption
With $462 million in revenue expected for 2023, ATEC is about to notch its fifth consecutive year of growth better than 20% and impressive 41% CAGR between 2019 and 2023. A focused, procedure-driven approach fueled its meteoric rise, and now the company is building a compelling digital ecosystem with EOS and the recently acquired REMI robot. As large, diversified orthopedic companies stumbled in the spine segment, ATEC readily took market share.
The integration between Globus Medical and NuVasive is likely to free up some reps and distributors even if things go extremely well. Spine integrations rarely do. The recent leadership changes at Orthofix and the resulting uncertainty could make it a less attractive landing spot for these reps, funneling even more opportunities toward ATEC.
Augmedics Equipped to Bring Tech to Masses
After nearly three decades on the market, navigation for spine surgery only has an adoption rate of 20%, a percentage that has remained stagnant for years. Usability issues, like having to look away from the patient or interrupted lines of sight, weigh heavily on the cost-to-benefit ratio for today’s navigation systems.
Augmedics initiated the U.S. launch of its xvision Spine augmented reality guidance system in 2020. The company remained active in the years since, raising more than $133 million across three financing rounds. The latest Series D round brought in $82.5 million and will support Augmedics’ rapidly expanding U.S. footprint and platform enhancements to drive mass adoption. The company also picked up digital assets, including the HOLO Portal Surgical Guidance System, from the collapse of Surgalign.
DirectSync Surgical Gets Breakthrough Designation
The company received Breakthrough Device Designation from FDA for its patient-powered smart spinal fusion device in May 2023. The implant harvests a charge from the patient’s natural walking motion that powers small pulses of DC electrical stimulation to promote bone healing. FDA has reviewed the company’s preliminary data and determined that the DirectSync Surgical interbody device may provide a more effective treatment of an irreversibly debilitating condition than the current standard of care.
Proven electrical stimulation therapy could significantly reduce healthcare costs associated with failed fusions. DirectSync Surgical estimated that spinal non-unions incur about $6 billion in incremental healthcare costs, with spinal fusion re-operation rates at 20% at the 11-year mark. The designation marks an important milestone for the company as it raises a Seed Round to get to first-in-human studies.
Premia Spine’s PMA Twenty Years in the Making
The Total Posterior Spine (TOPS) facet joint replacement system received FDA premarket approval following rigorous testing, including an Investigational Device Exemption (IDE) study to confirm the safety and efficacy of the system. At two years post-op, the system outperformed fusion in treating grade 1 degenerative spondylolisthesis with stenosis, becoming the first implant to receive a superiority claim over lumbar fusion.
But after such an arduous journey to approval, Premia Spine isn’t in a rush. The company’s focused rollout plan included 37 sites, 10 physicians with cadaveric training and three U.S. sales managers. Premia’s next big focus is the issue of reimbursement at the center level and surgeon level. “We have to make sure that the foundation is built strong and soundly. We’re in no hurry to move fast. We want to be successful and laser focused,” said Premia Spine Founder and CEO Ron Sacher.
Relievant’s Intracept Procedure Gaining Traction
After more than doubling its revenue from 2021 to 2022, Relievant Medsystems kept up its momentum this year with a series of funding, milestone and coverage announcements. The company estimates that the vertebrogenic pain market encompasses five million patients in the U.S. and is worth up to $30 billion.
Relievant closed its $50 million Series G financing in April 2023, just a few weeks before it announced the 10,000th patient treated with its Intracept procedure, reportedly the only FDA-cleared treatment for the relief of vertebrogenic pain. June brought favorable national coverage for Intracept from Cigna Healthcare for 19 million Americans. Relievant Medsystems followed that up in July with the launch of its next-generation Intracept Access Instruments.
Update: During the writing of this article, Boston Scientific entered a definitive agreement to acquire Relievant Medsystems for $850 million plus additional performance-based milestones, with close coming in the first half of 2024.
Xtant Focused on Motion and Acquisitions
The company changed its leadership team in mid-2019, tapping Sean Browne as the new CEO. Despite the pandemic, the new team returned Xtant to growth in 2021 after six years of decline. The company’s slightly above-market growth accelerated in the back half of 2022 and has since been bolstered by consecutive moves to acquire substantially all hardware and biomaterial assets of Surgalign.
Acquiring sub-scale companies in attractive adjacencies is a key strategy for Xtant moving forward. “We remain diligent in our approach to both tuck-in and transformational acquisitions,” Mr. Brown said. “Our primary focus will be on the assets that bring the three Cs: capabilities, capacity and cash flows. With both our Coflex and Surgalign deals, we feel we have hit on all three Cs.”
ZimVie Seeing Payoff from Turnaround Efforts
The early 2022 spinoff from Zimmer Biomet left ZimVie with a large market and a few differentiated products, but plenty of baggage. Years of acquisitions at Zimmer Biomet left a spine division with a redundant and cluttered portfolio, including 26 pedicle screw systems at one point. The separation process was complex, as well. “Separating out a company is far more complicated than integrating one,” said ZimVie Global Spine President Rebecca Whitney. “It took more than a year to take out spine from the DNA of Zimmer Biomet. We found all these places where we were very much entangled.”
Since then, ZimVie has done significant work in streamlining its portfolio and forging a unique identity. While those moves caused double-digit declines in spine revenues, the company is starting to see some traction with its key products outside of fusion. It scored key reimbursement wins for both Mobi-C in France and Tether in the U.S. Cervical disc replacements are underpenetrated in the European market, creating a growth opportunity for ZimVie.
Sometimes it feels as though change comes to orthopedics at a glacial pace, but the last few years have felt particularly eventful in spine. Consolidation, enabling technology and motion preservation devices are driving much of the action, and we think these seven companies are some of those most likely to benefit.
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Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
