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There's still room for upstarts with solid technology and a winning value proposition to take on the orthopedic industry's heavyweights. ODT profiles four up-and-comers with their eyes on the prize.
August 4, 2014
By: Christopher Delporte
Editorial Director, Medical Devices
The orthopedic market, while one of the largest sectors in the medical device industry, also happens to be among the most challenging. That doesn’t mean, however, that growth and opportunities for innovation are nonexistent. Companies continue to innovate and the past year has seen robust acquisition activity. In the past year, we’ve seen a significant number of deals in orthopedics, internationally and here at home—ranging from multibillion-dollar buyouts to smaller deal-making. Stryker Corp. recently bought Small Bone Innovations for $375 million in cash. Biomet Inc. bought spine firm Lanx Inc. late last year. This spring, Biomet was the target, with its planned purchase by Zimmer Holdings Inc. for $13.4 billion (the deal has not yet closed). Wright Medical Group Inc. shed its large-joint holdings last year and is bulking up its extremities business. To that end, Wright purchased small extremities firms OrthoPro LLC and Solana Surgical LLC, for $32.5 million and $90 million, respectively. Last spring, NuVasive Inc. purchased one of its suppliers, small Ohio-based spinal implant maker ANC LLC for $4.5 million. And, Smith & Nephew plc is preparing to close on its $1.7 billion purchase of ArthroCare Corp. Analysts and other industry-watchers predict continued orthopedic market growth, with a focus on international opportunities, minimally invasive technologies and an expanding extremities market. And, of course, as the industry adjusts to new healthcare sector demands, any system, any technology or procedure that reduces costs, increases efficiency and decreases hospital time will have an edge. The timing is right for smaller companies with transformative ideas. 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. Benvenue Medical Leadership: • Robert Weigle, CEO • Laurent Schaller, Founder & Chief Technical Officer • Jeffrey Jones, Chief Operating Officer • Victor Barajas, VP of Operations • Barbara S. Lindsay, VP, Clinical, Regulatory and Quality Affairs Sector: Spine/Vertebral Compression Fractures Location: Santa Clara, Calif. Online: www.benvenuemedical.com Founded in 2004, private-equity-backed Benvenue Medical Inc. develops minimally invasive expandable implants for the spine. The Northern California firm, based in the south Bay Area in Santa Clara, has made its business tackling the treatment of vertebral compression fractures (VCFs). According to the American Association of Neurological Surgeons, VCFs occur when the body in the spine collapses, which can lead to pain, deformity and loss of height. These fractures more commonly occur in the thoracic spine—the middle portion of the spine—the lower part, in particular. Osteoporosis is the most common cause of VCF, but the fractures also may be caused by trauma or tumors. According to figures cited by Benvenue, there are 750,000 osteoporosis-related vertebral compression fractures annually in the United States, which is expected to grow as the population ages. Surgical treatment options for VCFs include:
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