Motion Preservation Still Drives U.S. Spinal Implant Market

Preventing the market from reaching its full potential, including a weakening U.S. economy, adverse clinical data and poor reimbursement by insurance payers.

Aside from such external factors, minimally invasive devices and techniques also have also had an influence in limiting growth of the traditional segment from within the spinal implant market. Minimally invasive sacroiliac joint fusion, for example, is one such emerging segment that is drawing attention away from the traditional spinal implant market. Motion preservation devices also will divert the focus to more minimally invasive techniques but will continue to be the largest contributor to the rising spinal implant market. In the midst of thisevolving field, Minneapolis, Minn.-based Medtronic Inc. has maintained its position as the industry leader through innovation and acquisitions.

SI’s Significant Growth

Sacroiliac (SI) joint dysfunction recently has been found to be responsible for as much as 25 percent of lower back pain cases. Prior to this, the sacroiliac joint often was overlooked. Poor diagnostic techniques also played a role in the unpopularity of the diagnosis, as traditional methods are highly dependent on verbal feedback from the patient. Conventional treatments either can be surgical or non-surgical. Surgical treatments involve the fusion of the SI joint through an open procedure where screws or a threaded metal cage is implanted to support successful fusion. Such procedures were performed infrequently as a result of the low diagnosis count, in addition to the fact that treatment is done through an open surgery. Non-surgical treatments are equally rare, as many of them do not effectively treat the disease and simply offer temporary relief.

To address the problems of SI jointdysfunction without the challenges faced by conventional treatments, many companies began developing implants to treat the disease in a minimally invasive fashion. The first of such technologies to enter the U.S. market was San Jose, Calif.-based SI-Bone Inc.’s iFuse implant system. The iFuse received U.S. Food and Drug Administration (FDA) approval in 2008, and the CE mark for European commercialization was obtained two years later. As the first product to market, the iFuse has experienced a relatively high rate of market adoption, enabling the company to expand its operations throughout 2011. Aside from obtaining market approvals, the company has reached a number of other milestones including the training of more than 600 surgeons in its surgical technique, greatly expanding its workforce, as well as the closing of additional financing deals. As SI-Bone currently holds a market share of more than 90 percent, the expansion of the company is expected to promote extensive growth of the minimally invasive SI jointfusion market.

Growth in the market was further augmented in 2011 with the emergence of the SImmetry sacroiliac joint fusion system from Zyga Technology Inc. in Minneapolis. The combined sales of Zyga Technology and SI-Bone led to market growth of nearly 150 percent in 2011. As the second commercially available product in the minimally invasive SI joint fusion market, SImmetry also has gained a significant level of market acceptance. With more products in development from companies such as Signus Medical LLC (Chanhassen, Minn.) and Globus Medical Inc. (Audubon, Pa.), this market is forecasted to exhibit high growth rates in 2012 and beyond.

Motion Preservation Growth

The motion preservation device market consists of artificial discs, annular closure devices and dynamic stabilization devices. In 2011, this market experienced growth of nearly 20 percent in the United States. The rapid expansion was highly related to the increasing artificial disc segment. Artificial discs, which encompass both lumbar and cervical treatments, have been under scrutiny for their effectiveness, which has resulted in poor and limited reimbursement from insurance payers. As of 2011, only three competitors participated in the artificial disc market: Synthes Inc. (West Chester, Pa.), Medtronic and Johnson & Johnson’s DePuy Orthopaedics division (Warsaw, Ind.). Synthes offers the ProDisc and ProDisc-C for the lumbar and cervicalregions respectively. Whereas Medtronic simply offers the Prestige cervical disc and DePuy the InMotion lumbar disc. Lumbar discs, which have been commercially available in the United States for a longer period of time than cervical discs, still are not covered nationally by many insurance companies. Cervical artificial discs, however, have achieved greater acceptance during their brief time on the market. Moving forward, the artificial disc segment will continue to contribute to the overall growth of the motion preservation market.

U.S. Motion Preservation Market 2008-2018

Aside from artificial discs, the motion preservation device market is further augmented by the markets for annular closure devices and interspinous process spacers. Both of these markets are monopolized by a single competitor—Anulex in the annular closure market and Medtronic in the interspinous process spacer market. Anulex Technologies Inc. in Minneapolis manufactures the Xclose and Inclose systems designed for soft tissue repair. In 2011, the annular closure market experienced a major decline when Anulex received a warning letter from the FDA, effectively stopping the company from marketing its products as annular repair devices. The future launch of the Barricaid from Intrinsic Therapeutics Inc. based in Woburn, Mass., is expected to be beneficial to this market segment, as it has been in the European market. The interspinous process spacer market, which currently consists solely of Medtronic’s X-Stop IPD system, also is anticipated to experience a surge of new products, such as those from Eden Spine LLC (Altamonte Springs, Fla.) and Paradigm Spine (New York, N.Y.).

Future segments in the motion preservation device market include nucleus replacement devices and facet arthroplasty systems. Although a number of nucleus replacement devices that previously were under development have ceased production, a number of promising products still are slated for market release dates in the near future. Facet arthroplasty systems, which are designed to be used conjunctively with lumbar artificial discs, are expected to be a promising market due to their indications and facilitative properties. Taking emerging technologies into consideration, the motion preservation device market is forecasted to maintain double-digit growth rates, exceeding a market size of $1 billion by 2018. Segments in the chart (at left) include annular closure, cervical artificial disc, interspinous processdecompression and lumbar artificial disc.

Medtronic Dominates for Now

In 2011, Medtronic maintained its position as the leader in both U.S. markets for spinal implant devices and minimally invasive spinal implant devices. The company was present in nine of the 12 market segments discussed in the two iData Research reports. The segments in which the company did not participate include facet fixation, minimally invasive sacroiliac fusion, spinal electrical stimulation and spinal endoscopy. Flagship products from Medtronic’s spinal product portfolio include the X-Stop IPD system and the KyphX balloon kyphoplasty system, both of which were obtained via the acquisition of Kyphon in 2007. Other prominent Medtronic products include its various interbody and fixation devices, cervical artificial disc devices andminimal access spine technology systems. As one of the leading competitors in the global spinal implant market, Medtronic’s share of the U.S. market will greatly strengthen its position as a global market leader.

However, Medtronic’s leading position has not been met without challenges. In 2011, a study was released whichsuggested a link between the company’s Infuse growth protein and cancer. Such news further hastened the decline of Infuse sales, which already was adversely affected by previous reports of the U.S. Senate investigation into omissions of safetyproblems from the drug’s clinical trials and the U.S. Department of Justice’s probe of off-label marketing. As Infuse is usedconjunctively with some of Medtronic’s other spinal fusiondevices, the final outcome of this ordeal ultimately may have a negative impact on the company’s sales of its spinal implants. Aside from internal challenges, Medtronic also will be under constant external pressure from competitors. The most notable is the merger of J&J and Synthes in 2012. Together, they held aggregate market shares in 2011 rivaling that of Medtronic’s in most market segments.

Other prominent leaders in the U.S. spinal implant market include DePuy, NuVasive Inc. (San Diego, Calif.), Synthes, Stryker Corp. (Kalamazoo, Mich.) and Zimmer Holdings Inc. (Warsaw, Ind.). Along with Medtronic, these five companies comprise the vast majority of the market. However, a number of other competitors such as Alphatec Spine Inc. (Carlsbad, Calif.), K2M Inc. (Leesburg, Va.), Lanx Inc. (Bloomfield, Colo.), Globus and Titan Spine LLC (Mequon, Wis.) also are developing reputations of their own in niche markets. Emerging markets, namely nucleus replacement devices and facet arthroplasty, also will bring about their own assortment of competitors. Whether these competitors will make their mark on the spinal implant industry is yet to be seen.

Dr. Kamran Zamanian, president and CEO of iData Research Inc., has spent more than 20 years working in the market research industry. He received his Bachelor of Science in engineering from the University of Dundee, and later earned Master of Science and doctoral degrees from the University of Manchester in market research and technology. Jeff Wong is a senior analyst at iData Research. He earned his joint Bachelor of Science in Biochemistry and Business Administration from Simon Fraser

University and specializes in spinal and dental market research. The information contained in this article is taken from two reports published by iData Research titled “U.S. Market for Minimally Invasive Spinal Devices” and “U.S. Market for Spinal Implants and VCF.” iData Research, based in Vancouver, British Columbia, is an international market research and consulting firm focused on providing market intelligence for the medical device, dental and pharmaceutical industries. For more information, please email [email protected].