Change is relentless in orthopedics. Yet, comprehending the magnitude of change that has unfolded over the last several quarters can be challenging. Nevertheless, I am going to try to highlight the significant shifts that have transpired since 2021 and the ongoing trends.
1/ Not long ago, Nuvasive and Globus were separate companies and competitors. And Orthofix and SeaSpine were separate companies and competitors. No more. This year a 78 year old global orthopedic company, Lima, was absorbed by Enovis. Lima is no more.
2/ Recently this list of companies were alive and seeming doing well. Now they are gone or dying. There will be more to come.
- Avail MedSystems – asset sale
- Bioventus – in trouble
- Carevature – asset sale
- Conformis – asset sale
- ControlRad – asset sale
- Intellirod Spine (fka OrthoData Inc.) – asset sale
- Lima TechMah Medical – cut US office
- Novum (fka Bio2) – shut down
- Stryker Knee Creations – division shut down
- Surgalign – asset sale
- Trice Medical – desperate for capital
- Titan Medical – asset sale
- TracPatch Health – asset sale
3/ The capital markets are COMPLETELY CLOSED for any ortho company that is carrying debt and is not able to reach profitability.
5/ The IPO door has COMPLETELY CLOSED. Monogram Orthopedic was the last one through the IPO door back in May. MGRM stock is down 77% from it opening day as of this writing. My guess is 2H 2024 will be an IPO bonanza.
6/ Silicon Valley Bank, the 16th largest bank in the US, provided venture capital to many orthopedic companies (including strong companies like Treace Medical Concepts and SI-Bone.) In my first startup back in 2008, we got SVB venture money. In 2023, SVB became insolvent and the FDIC had to take it over. Gone.
7/ The ubiquity of 3D printing technology is undeniable, and it is gradually transitioning into a commodity resource. What distinguishes its effectiveness, however, lies not merely in the additive manufacturing process itself but in the finesse of the user interface (UI), surgical planning, adept project management, and seamless communication with the hospital.
8/ AI technology has been used as “hype” to raise money, but now AI has become a “joke”. Very few ortho companies are actually using real Machine Learning (ML) algorithms. Also, very few ortho companies have large enough data sets with proper labeling to effective use AI for effective pattern matching. Read “Don’t believe everything you see at AAOS.”
9/ The Regulatory hurdle in the US has gotten higher and higher with the FDA. In particular, the IDE/PMA pathway has become extremely risky financially and in risky in duration. We may only see one IDE/PMA clearance each year.
10/ The migration of procedures moving from hospitals to ASCs is relentless.
11/ There seems to be endless demand for procedure specific disposable surgery kits, driven by the ASC customer.
12/ VR, once seen as the future in orthopedics, has become a basic training tool.
13/ Startups have flipped from doing their early surgeries in the EU to doing them in the US because of the burdensome regulatory pathway in EU. The CE used to be a breeze.
14/ Many US device companies will not be able to meet the EuMDR regs in time and will have to stop selling products in the EU.
15/ The big public ortho companies are growing revenue at record levels, while laying off staff in record numbers. They have learned how to grow sales with less people, post Covid.
16/ Remote work opportunities for job hunters are slowly melting away.