Orthopedic implant startup hopes to find market share with lower-cost proven technology (MedCityNews)
NovoSource Inc. doesn’t claim to have the next cutting edge advancement in orthopedic devices. Instead, it’s one of a number of small orthopedic device firms looking to cut costs from the process of developing and selling existing orthopedic implants.
The startup makes orthopedic implants using technology that’s been around for years and has produced clinical trial results. Then it outsources its manufacturing and sells directly to hospitals and surgeons. “We’re not investing in capital equipment,” said co-founder and Chairman Harold Linville. “We are outsourcing our manufacturing to suppliers that have 25 to 30 years of experience in supplying to other companies around the world.”
Its first product, a total knee replacement, is under 510(k) review by the FDA and should launch toward the end of the first quarter of 2013, Linville said, noting that distributors are already in place. A hip implant should launch shortly thereafter.
The company has raised nearly all of the $4 million it disclosed in a SEC filing last week and is on its second offering, he said.
Linville was previously chief business development officer at Leis Medical Manufacturing, now named Innovative Medical Device Solutions Inc. He said he got involved in Dayton, Ohio-based NovoSource in April of this year. Two other seasoned co-founders, former Latex International President Jon May and former Upex Holdings CEO T. Bradley Harris, are also involved in the venture, according to its profile on Gust.
Numerous other privately held device makers like White Box Orthopedics and Emerge Medical have launched in recent years with the same idea – offer proven orthopedics technology at a lower price by removing frills from the development and sales process, according to a report from MarketWatch. With an aging population in the U.S. and more access to orthopedic care internationally, the global orthopedic implant market is projected to reach $46 billion by 2017, led by giants like Stryker, Zimmer, Biomet and Johnson & Johnson.
NovoSource’s approach addresses the clinical data issue – one of the key themes for innovation in the orthopedics market reflected in last month’s Medical Innovation Summit. But it will also likely be subject to another of the themes: slow uptake and skepticism from surgeons who are seeing good results from the products they’re already.