New Product Launches in Lapidus and Bio, Review of Treace and Paragon FY2023
ANNOUNCEMENTS
FAN is back!
This week we look at a newcomer to the foot and ankle biologics game, the fiscal year numbers for Treace and Paragon 28, and finally we dig into some product launches in the Lapidus market.
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Happy New Year!
Big Foot
This Week in FAN
- Golden Demobone: Award for Influencers and Educators
- Little Guy, Big Idea: InduceXT
- By the Numbers: 2023 Fiscal Year of Paragon28 and Treace
- New Product Releases: Lapidus Edition
- Industry Events: PodiatryMeetings.com Calendar | AOFAS Meetings
GOLDEN DEMOBONE AWARD
This week's Golden Demobone Award goes out to two surgeons looking to improve sales reps' understanding of their craft. The best reps continue to educate themselves and a lot of that comes by seeking information outside of corporate training.
Nicholas Strasser, MD (Vanderbilt) and Jan Szatkowski, MD (Indiana) have created a free resource for reps called Orthopedic Indications that everyone should take advantage of whether you are a rep, a marketing manager, or in the C-Suite. It can be a nice refresher for surgeons as well.
In addition, Dr. Strasser is starting to work on Meded Surgical, an interactive surgical training website.
Orthopedic Indications provides case-based insights and YouTube content on orthopedic surgeries with the aim of increasing the expertise and sales success of the medical sales rep.
Sign Up for their Newsletter HERE
Visit the MedEdge Surgical Website HERE
Watch Videos from the Orthopedic Indications YouTube Channel HERE
EXCELLENT WORK GENTLEMEN!
LITTLE GUY, BIG IDEA: BIOLOGICS EDITION
Launched at ACFAS in Tampa, InduceXT is a multi-growth factor bone graft developed specifically for Foot and Ankle Surgeons. Their special sauce is how they amplify the bioavailability of the growth factors trapped within the bone matrix.
The bioimplant is created using the proprietary NMP Process that unlocks growth factors, including BMP-2, BMP-7, TGF-ß1, VEGF, and PDGF, making them more bioavailable for bone regeneration.
While bone grafts containing recombinant growth factors (rhBMP-2 and rhPDGF) release their growth factors in a burst, with over 90% released within 1 to 2 days, NMP releases growth factors over a prolonged period, lasting into the bone remodeling phase.
Induce Biologics USA, the company behind InduceXT, has become the fastest growing biologic in the spine market and now has its eyes on duplicating that success within foot and ankle. Outside of Augment and Infuse (used off-label in train wrecks) the Foot and Ankle biologic market has become saturated with “white boxed” grafts and bone void fillers. The NMP technology used to develop InduceXT is unique and that should provide the potential for the product to gain some traction in the foot and ankle market.
Augment is close to being a 200M product for Stryker and has done a masterful job of targeting the foot and ankle community as the only dedicated on-label (hindfoot) product. InduceXT would like to jump on that train.
It has some benefits that will play well against Augment - the product is shelf stable, it is packable, able to withstand irrigation at the fusion site, and contains multiple growth factors including BMP2. In addition, it can be used for any joint that needs fusing in the foot and ankle.
It will be interesting to see if InduceXT can become the next big thing in Foot and Ankle biologics. Learn more about InduceXT here.
BY THE NUMBERS:
FY2023 - Paragon28 and Treace
Why are these numbers so interesting to us?
Well, as the only two publicly traded, pure-play foot and ankle companies, Paragon 28 and Treace let us take a peek under the hood and provide real sales data as reported to Wall Street. Treace and Paragon are no longer the “new guys.” Treace is now entering its 10th year in existence. Even more mind blowing…Paragon28 has been around for nearly 14 years. Both of these companies have grown significantly over the last decade plus and have done it very differently.
Let's look at the numbers:
Treace Medical Concepts, Inc.
STOCK: TMCI - $11.23
Q4 Sales: 62.2M (up 25% YOY)
FY 2023 Sales: 187.1M (up 32% YOY)
Reported Q4 Loss: 6.3M
Reported FY 2023 Loss: 49.5M
Gross Profit Margin: 81.2%
2024 FY Sales Estimate: 220-225M
Lapidus Kit ASP per Case: $6437
Active US Treace Surgeons 2023: 2855
Paragon28
STOCK: FNA - $10.05
Q4 Sales: 60.6M (up 17.6% YOY)
FY 2023 Sales: 216.4M (up 19.3% YOY)
Reported Q4 Loss: 19.6M
Reported FY 2023 Loss: 47.8M
Gross Profit Margin: 79.9%
2024 FY Sales Estimate: 249-259M
Both companies exhibited solid growth numbers well above the F&A average, which is somewhere between 8 to 11% depending on who is handing out your quota. However, they both still lost just shy of $50 million for the year. These losses are assumptively related to increased costs of marketing, sales related expenses, and R&D investments.
Paragon28
Albert DeCosta and the boys continue to pump new products with recent launches in rotational Lapidus, MIS and Soft Tissue. Paragon 28 has one of the most complete bags in all of foot and ankle and with that portfolio comes a need for a massive amount of inventory on hand to service demand.
New products and launches require a significant amount of resources to make an impact on the market. In our current lending environment, where money is tight and the cost to borrow is expensive, Paragon has continued to press on in terms of new product innovation which is impressive.
This investment in innovation puts a significant amount of pressure on sales management and distributors to push these products into the market. Bandwidth, Product Approvals, and Inventory are challenges all distributors face including those carrying Paragon. New products can be a blessing if they are winners or can be a curse if expectations are unrealistic or if the product is a dog. Paragon has answered the bell in the past and I don’t expect that to change.
Treace
Treace on the other hand has done the complete opposite of Paragon in terms of their product portfolio. Instead of going wide, they have gone deep on a single indication focusing all of their attention on the CORA. Lapiplasty has seen improvements over the years, from the Speed Plate to smaller incisions, but for the most part the system has remained consistent. Inventory and instrument expenses have been limited by their sterile packed implants.
Treace spends their money in other ways…putting patients into physicians' offices through their direct to patient marketing strategy. This marketing has led to loyal users and in my opinion, the best sales marketing of all time. Patients requesting a specific implant system at this level is something that has never been done in the history of orthopedics.
Do not sleep on Treace making moves into new areas of the foot and ankle market. Treace has recently engaged several high-level MIS surgeons to develop an MIS bunion system. This goes against what Treace has built their Lapidus brand off of, but at the end of the day it will open up access to a huge trending market.
Their core user base are bunion surgeons, so engaging and training them will not be difficult. However, the cost to train MIS and have the customer stick is an expensive undertaking. I have a feeling Treace will find a way to make this a high margin, sterile system and leverage their D to P marketing to expand the MIS market to new levels.
What's Next?
So where do these 2 companies go from here? Paragon28 to Zimmer? Treace to Stryker? Will they continue on for another 5 to 10 years? Only a few people know the long term plans of these companies and we will be here to speculate and report on what happens next.
NEW PRODUCT RELEASES: LAPIDUS EDITION
All of these systems featured below are looking to take a bite out of Treace market share. Stryker has been making ground with Lapifuse for years, let's take a look at what is new in the Lapidus market.
EVOLVE34™
FLEXIBILITY
Allows for any joint prep desired and fixation choices
based on surgeon preference, empowering the surgeon to
perform the procedure the way they want.
ANATOMICAL CORRECTION REFERENCE
The jig is anchored on the 2nd metatarsal, providing the
surgeon with an anatomical reference for correction
during the procedure. The optional cut guide is designed
to minimize shortening of the 1st metatarsal and allows for
cuts perpendicular to the 2nd metatarsal.
COMPREHENSIVE ASSISTANT
Evolve34™ is an all-in-one, hands-free tool that helps the
surgeon with correction, distraction, and compression. No
need for multiple pieces.
REFLEX® TETRA Nitinol Staples
REFLEX® TETRA four-leg staples are designed to fit the unique bone structures and anatomies of the MTP (metatarsophalangeal), first and lesser TMT (tarsometatarsal), and TN (talonavicular) joints.
Medline UNITE is the first to introduce targeting guides to efficiently place a cannulated screw or two-legged staple in the correct position through the REFLEX TETRA staple’s inner legs. The Medline UNITE REFLEX Foot Recon Nitinol Implant System is one of the first comprehensive nitinol implant system with FDA clearances for MTP, TMT, and TN specific indications, and provides all staples, discs, targeting guides, joint prep, and related instrumentation in a single, comprehensive tray for maximum versatility and intraoperative efficiency.
Bun-Yo-Matic™
The Bun-Yo-Matic™ is the only bunion solution on the market designed to intraoperatively simulate weight-bearing and allow for compression prior to hardware application. This unique approach provides surgeons a more reproducible and efficient means to restore three-dimensional alignment of the foot while accommodating each surgeon’s preferred fixation methodology in a Lapidus procedure.
The Bun-Yo-Matic™ Clamp remains fixed to the anatomy throughout the entire procedure, ensuring surgeon-guided correction and anatomic alignment are maintained through application of fixation. The System is also equipped with cutting guides designed to minimize bone removal from the base of Tarsometatarsal (“TMT”) joint when preparing for fusion.
CONTINUING EDUCATION
PodiatryMeetings.com Calendar
Looking for a meeting?
This resource has an extensive amount of information for meeting opportunities where you can earn your required continuing education credits.
Click below to access the extensive meeting calendar.
AOFAS Upcoming
Meetings & Courses
September 11-24, 2024
January 16 - 18, 2024
ONEDemand Education Center
Foot & Ankle Focus (Webinars)
Upcoming Joint and Endorsed Courses
International Federation of Foot & Ankle Societies (IFFAS) Scientific Meeting
May 30-June 1, 2024
Seoul, Republic of Korea
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