Room to Grow: Emerging Growth Orthopedic Companies (ODTMag)
This is the fifth year, as part of our Top Company Report issue, that Orthopedic Design & Technology has profiled small and midsize emerging growth firms positioning themselves alongside (perhaps with the goal of overtaking or being acquired by) larger market leaders. This year’s installment provides an overview of four orthopedic companies vying for rank, digests their technologies, examines their sectors and what’s kept them busy during the past year.
Titan Spine
Leadership:
• Peter Ullrich, M.D., Co-Founder & CEO
• Kevin Gemas, Co-Founder & President
• Mark Berg, Sr. VP, Global Operations
Sector: Spinal Fusion
Location: Mequon, Wis. & Laichingen, Germany
Online: www.titanspine.com
Spinal fusion technology has been around a long time, with a widely accepted profile of safety and efficacy. Detractors, however, say that fusing vertebrae together alters the biomechanics of the spine and puts excess pressure on other vertebral levels, which can cause issues following surgery (sometimes years after), such as problems with the vertebrae above and below where the fusion took place. The anti-fusion group favors motion-preserving options such as artificial discs, dynamic stabilization technology and interspinous spacers.
Privately held startup firm Titan Spine LLC, however, is betting on the spinal fusion market.
Management of the firm, founded in 2006, claims the company was created to ”fulfill an unmet need” in the interbody fusion sector for cages designed to ”enhance fixation, preserve vertebral body integrity and help promote fusion.” Titan Spine’s technology centers around a proprietary surface treatment that creates a textured surface at the macro, micro and cellular levels—a combination the firm claims promotes new bone growth to support the fusion process.
According to estimates from London, England-based market research firm GlobalData, there’s still plenty of life left in spinal fusion. The group reports that the spinal fusion market in 2013 was valued at $4.78 billion across the 10 regions—the United States, France, Germany, Italy, Spain, the United Kingdom, Japan, Brazil, India and China. By the end of the forecast period in 2020, sales will have grown to $6.98 billion, with a compound annual growth rate (CAGR) of 5.58 percent.
GlobalData forecasts that the United States will continue to occupy the majority of the global spinal fusion market through 2020, though U.S. dominance in the market will decline from 71 percent in 2013 to 63 percent in 2020, analysts predict. It also will experience one of the lowest CAGRs over the forecast given how mature the market is in the country and newly enacted reimbursement hurdles from public health payers. Like other medical device markets, emerging economies will be a source of large growth rates. For example, China will experience double-digit growth through 2020 and this will increase its global market share from 5 percent in 2013 to 10 percent in 2020. Additionally, select established economies in the European Union will experience large growth rates over the forecast period including the United Kingdom and Italy. The primary reason for their growth, according to Global Data analysts, is the increasing procedure volumes for spinal fusion surgeries owing to favorable reimbursement levels and patients’ willingness to undergo surgery with minimally
invasive techniques. One of the major barriers affecting the spinal fusion market in the United States is the increasing public payer scrutiny of the procedure being overused. Medicare has made its
criteria for reimbursement much more stringent.
For the folks at Titan, the numbers seem to be going in the right direction. In November last year, the firm reported that it reached 18,000 implantations of its Endoskeleton interbody fusion devices since the technology’s inception and is ”rapidly approaching” a $20 million annualized sales revenue run-rate.
”These two achievements reflect the continuing rapid surgeon adoption of its proprietary interbody fusion devices and mark a paradigm shift toward devices engineered with roughened titanium surface technology,” officials wrote in a press release. There currently are more than 5,300 implants per year using the company’s technology, with more than 150 surgeon customers, officials noted in November.
Their report also noted that Titan now has more than 60 U.S. distributors, including signing a distribution agreement with Biomet Spine in Germany. The companies also reportedly are considering broadening the scope to reach physicians in additional countries within the European Union. No word yet on how Biomet’s planned $13.4 billion acquisition by Zimmer Holdings Inc. will affect the pact.
Management also reported 40 percent year-over-year revenue growth for the nine-month period ended Sept. 30, 2013. Significantly, there have been no adverse medical device reports since the company’s inception.
”One of the reasons that I believe Titan Spine’s interbody devices have resonated well with surgeons is because of the strength and design of the implant combined with the cell-signaling properties of its surface technology,” said Kade Huntsman, M.D., spine surgeon with the Salt Lake Orthopaedic Clinic in Salt Lake City, Utah, and a member of Titan’s design team. ”I like that its roughened surface technology is created from a reductive process and does not possess a coating that could have the potential for delamination or degradation. I feel very confident implanting Titan’s Endoskeleton devices.”
The Endoskeleton line of devices features Titan’s surface technology. The combination of surface levels is designed to create an optimal host-bone response and actively participate in the fusion process by promoting new bone growth, encouraging natural production of bone morphogenetic proteins (BMPs) and creating the potential for a faster and more robust fusion, company officials noted.
”We are encouraged to see several other companies that are adopting the Titan Spine approach by launching interbody devices with roughened surfaces and beginning to acknowledge shortcomings with their standard PEEK (polyetheretherketone) and smooth titanium offerings,” said Kevin Gemas, president of Titan Spine. ”We have been optimizing our surface technology and its bone formation effects… through collaboration with thought leaders in materials science and biomedical engineering and feel that our commitment to be the leaders in surface technology is the reason we are starting to see rapid acceleration in our sales growth.”
In July this year, the company received clearance from the U.S. Food and Drug Administration (FDA) for its Endoskeleton TL system, a spinal fusion system using a lateral approach. According to the company, the Endoskeleton TL represents the first lateral fusion device to feature surface technology that is designed to participate in the fusion process by creating an osteogenic response to the implant’s topography. The device uses the company’s roughened titanium surface technology, which has been shown to improve the production of osteogenic (bone growth) and angiogenic (formation of new blood vessels) factors that are critical for bone growth and fusion. The design of the TL device incorporates large windows and large internal volumes to allow for significant bone graft packing, clear CT and MRI imaging, desired bone graft loading, and the ability to pack additional bone graft material within the device following implantation, according to the company. Members of the TL design team include Kade Huntsman (quoted above); Andy Kranenburg, M.D., co-medical director of the Providence Medford Medical Center Spine Institute in Medford, Ore.; Axel Reinhardt, M.D., head of the Department of Spinal Surgery at the Specialized Orthopaedic Hospital in Potsdam, Germany; and Paul Slosar, M.D., chief medical officer for Titan Spine.
Huntsman performed the first surgeries using the Endoskeleton TL on July 9 at St. Mark’s Hospital in Salt Lake City.
Slosar noted: ”The ability to orchestrate cellular behavior and promote bone growth in response to an interbody device has not been in the lateral surgeon’s armamentarium until now. The TL is the byproduct of a unique collaboration between academic biomaterial scientists, spine surgeons, and industry experts to create a truly differentiated lateral interbody device that is designed to benefit
patients and surgeons.”
Awards & Studies
Shortly after the FDA cleared the Endoskeleton TL, the company was presented with the Whitecloud Award for Best Basic Science Research by the Scoliosis Research Society in recognition for a research paper that evaluated Titan’s surface technology. The study results demonstrate, Titan executives said, that the company’s line of Endoskeleton interbody devices promotes osteoblastic differentiation and enhanced bone-forming environment compared to devices made from PEEK.
The paper, titled ”Implant Materials Generate Different Peri-Implant Inflammatory Factors: PEEK Promotes Fibrosis and Micro-textured Titanium Promotes Osteogenic Factors,” was presented by Slosar at the International Meeting on Advanced Spine Techniques (IMAST) held July 16–19 in Valencia, Spain.
”Through this research we are better able to understand how implant surface properties influence specific inflammatory micro-environment factors,” said Barbara Boyan, Ph.D., dean of the School of Engineering at Virginia Commonwealth University and lead author of the study. ”We found that the titanium alloy surface with a complex micron scale and sub-micron scale roughness promotes a cellular response that favors bone formation. Conversely PEEK created an inflammation response that will more likely to lead to fibrous tissue formation.” According to the company, previous in-vitro research on Titan Spine’s current proprietary surface technology demonstrated a significantly enhanced osteogenic environment when compared to smooth titanium or PEEK.
In June, Belgrade, Mont.-based Bacterin International Holdings Inc. and Titan Spine received good news from a peer reviewed article that appeared in The International Journal of Spine Surgery.
Bacterin is an accredited tissue bank as well as a developer of spine products. The study, titled ”Transforaminal Lumbar Interbody Fusion Rates in Patients Using a Novel Titanium Implant and Demineralized Cancellous Allograft Bone Sponge,” reported positive results with the use of Bacterin’s OsteoSponge, a demineralized cancellous bone product for spinal fusion procedures, and Titan Spine’s Endoskeleton TT titanium cage and autograft bone.
Gerard Girasole, M.D., was the principle investigator for the journal article that evaluated OsteoSponge for interbody fusion in conjunction with Titan Spine’s Endoskeleton TT titanium cage and autograft bone. The study involved a set of patients evaluated at six months and a separate set of patients that were evaluated at one year after surgery. An independent radiologist reviewed and graded the computed tomography scans for evidence on fusion and determined the fusion rates to be 41 of 44 (93.2 percent) for the six-month group and 37 of 38 (97.4 percent) for the 12-month group. There were no radiographic device-related complications.
The impetus for the study, as stated in the abstract, was that traditional transforaminal lumbar interbody fusion (TLIF) with grafting and implant options such as iliac crest bone graft (ICBG), recombinant bone morphogenetic protein (rhBMP), and PEEK cages have been reported to achieve extremely high fusion rates. Unfortunately, these options also have been frequently cited in the literature as causing postoperative morbidity and complications at a high cost. So the researchers sought to investigate TLIF using an acid-etched, roughened titanium cage (Titan Spine’s) that upregulates osteogenesis to see if similar fusion rates to those cited for ICBG, rhBMP, and PEEK cages could be safely achieved with minimal morbidity and complications.
Expanding International Reach
Titan’s product line is commercially available in the United States and portions of Europe and recently gained market approval in Australia and New Zealand, with much of the international reach occurring recently. In June this year, the company expanded use of its Endoskeleton line of interbody devices to the United Kingdom and Spain. A week later, Titan received separate registration approval from the Australian Therapeutic Goods Administration and the New Zealand Medicines and Medical Devices Safety Authority to commercially market the Endoskeleton line.
At present, the company’s product portfolio includes the following Endoskeleton devices: TL for lumbar procedures; TAS, an anterior (from the front) lumbar interbody fusion (ALIF) device with screws; TA for ALIF procedures; TT for TLIF procedures; TO for posterior lumbar interbody fusion (performed by approaching the spine through the low back) and oblique procedures; and TC for cervical procedures.