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Product / Company Performance

SI-BONE reports 3Q18 revenue of $13.4MM, +14.5% vs. 3Q17 -

By Mike Evers, ORTHOWORLD

SI-BONE, a pioneer of a minimally invasive surgical treatment for sacroiliac joint dysfunction using their iFuse implant system, posted 3Q18 revenue of US $13.4MM, +14.5% vs. 3Q17. This marks the first quarter for SI-BONE as a public company after the successful completion of their October 16, 2018 IPO that raised a net $113.7MM. The public offering exceeded company expectations and will allow them to accelerate their growth plans through salesforce expansion, additional surgeon education as well as research and development.

There is significant runway for revenue growth, as leadership estimates that 15% to 30% of all chronic lower back pain can be attributed to SI joint dysfunction and represents a $2.7BB annual market. While iFuse has been used in 35,000 procedures by 1,700 surgeons since its 2009 debut, the company currently has 400 “active” surgeons, defined as those who have performed a procedure in the last three months.

To expand their commercial footprint, SI-BONE has focused on increasing the size of their salesforce by hiring direct reps, clinical support specialists and field marketing specialists. At the end of 3Q18, the company had 46 direct sales reps with an average territory run rate of $1MM. Leadership expects the addition of clinical support specialists to cover cases will help ramp existing territories to a run rate of $1.5MM, and eventually $2MM over the course of 24 months. The company is targeting reps who have experience in the pain management, neuro-stimulation and spine markets.

Leadership believes the company’s exclusive payor coverage policies are a distinct advantage over the 22 competiting SI joint products on the market. In 3Q18, the company received exclusive coverage from Blue Cross Blue Shield North Carolina and Neighborhood Health Plan, as well as a positive coverage policy from HealthPartners. It also received an exclusive coverage policy recommendation from EviCore, a specialty benefits company. In total, SI-BONE has access to 254MM people across 24 payors who cover iFuse exclusively. The company is awaiting coverage decisions from large payors like Aetna, Anthem, CareFirst, Cigna and Humana. Leadership noted that the prospects for coverage from Cigna and Humana are looking very positive, while Aetna is less certain.

A significant factor in the company’s exclusive reimbursement policies is the positive clinical data supporting iFuse. Two studies in 3Q18 demonstrated beneficial outcomes for the implant. The 4-year LOIS study, published in Medical Devices: Evidence and Research, demonstrated that iFuse decreased mean SI joint pain scores by 54 points and decreased disability by 26 points. In ClinicoEconomics and Outcomes Research, the Optum study showed positive ROI and lower post-operative payer costs in outpatient settings with iFuse.

ORTHOWORLD projects 2018 SI-BONE revenue of $55.3MM.

3Q18 and YTD segment sales and growth on an as-reported basis are as follows.

  3Q18 3Q17 $ Change % Change
Spine $13.4 $11.7 $1.7 14.5%
  9Mo18 9Mo17 $ Change % Change
Spine $39.8 $34.2 $5.5 16.2%

SI-BONE’s revenue by geographic region as follows. Ex-U.S. sales were mostly flat due to softness in the European market combined with constricted investment by the company over the last 12 months. Leadership is bullish on their prospects in France and the U.K., while noting the German market will likely take more time to get on track.

Geographic Region 3Q18 3Q17 $ Change % Change
US $12.2 $10.5 $1.7 16.0%
Ex-US $1.2 $1.2 $0.0 1.0%
Total $13.4 $11.7 $1.7 14.5%

Net earnings for 3Q18 are as follows.

3Q18 Amount ($MM) % of Sales
Sales $13.4  
   Cost of Sales -$1.2 9.1%
   Sales and Marketing -$10.6 79.3%
   Administrative -$3.2 24.1%
   R&D -$1.4 10.3%
   Other -$1.7 13.1%
Net Earnings -$4.8 -35.8%

Sources: SI-BONE; ORTHOWORLD estimates. All revenue figures presented in USD $MM.

Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.

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