Speaking with device companies, suppliers and surgeons at the North American Spine Society Annual Meeting (NASS) confirmed our previous thoughts on the health of the spine market and the technologies driving its growth—additive manufacturing, robotics and surface technologies.
Back in August, we noted that spine market growth was expected to remain at about 2% in 2018. Medtronic, DePuy Synthes, Stryker and Zimmer Biomet, which combined hold 56% of the market, each performed under 2% in 2017 and only Medtronic and Stryker reported positive growth in 1H18. Executives from the large, diversified players continue to commit to the market and to portfolio turnarounds. Total market growth is partly dependent upon how fast those turnarounds take place.
At NASS, device companies indicated that procedural volume is trending up after last year’s decrease in volume, attributed to both weather-related and unknown factors that stumped the industry. Zimmer Biomet told us that price pressure remains at 2% in the U.S.
Smaller companies said they’re still taking market share from the large ones, and that the market offers substantial opportunity for growth. ulrich medical USA announced 10% growth in 2017 vs. 2016 and 4WEB Medical announced 57% growth over that same period. Other smaller private companies shared similar ranges with us at NASS. The key to maintaining that growth, they said, was offering differentiated products—which brings us to about the topic of new technologies.
This year’s Annual Meeting reinforced what we believe is a shift in how companies of different sizes approach the market.
Preoperative planning, navigation, nerve monitoring, robotics and surgical assistance are technologies we’ve repeatedly mentioned. You may be tired of hearing that “they’re coming” or are skeptical of the approach; we have been too, at times. The top players’ prioritization of these technologies at NASS demonstrated that they are committed to enabling technologies that will enhance procedures beyond implant innovation.
- Globus Medical demonstrated ExcelsiusGPS, its technology that incorporates navigation and robotics in one unit. Two weeks prior to NASS, Globus announced the acquisition of Nemaris and its Surgimap preoperative planning software.
- Medtronic, on the heels of announcing an agreement to purchase Mazor, highlighted its future all-in-one navigation and robotic technology, Mazor X Stealth, which is expected to receive FDA 510(k) approval in 4Q18.
- NuVasive demonstrated its Pulse platform which incorporates multiple technologies, including the company’s neuromonitoring system, along with surgical planning, rod bending, imaging, navigation and automation. The platform is expected to be available in 2Q19.
- Zimmer Biomet demonstrated the Rosa robot alongside its WalterLorenz surgical assist arm, the latter of which complements instrument positioning. Rosa’s FDA 510(k) clearance for spine surgery is expected in early 2019.
- DePuy Synthes introduced SENTIO MMG, a digital mechanomyography platform that assesses nerve status during spine surgery. Johnson & Johnson acquired the technology in mid-2017.
Dissenting reactions to these technologies largely focus on cost and the fact that they assist surgeons with routine steps. Leadership at Medtronic and Zimmer Biomet said that such thought is narrow while stressing that the industry is at iteration one, specifically with robotics.
“We’re highly focused on optimizing the screws with the robot, but there are other enhancements that you’ll see in the future,” said Doug King, Medtronic’s Senior Vice President and President of Spine. “There are other things that a robot can do, whether it’s bony anatomy, disc work or prep work. We’re starting to lay out an R&D roadmap.”
All of this is to say that the larger companies believe these tools will allow them to accelerate growth and maintain market share.
We attended the plenary session on device materials, design and surface characteristics. Surgeons, academics and industry presented their favorable findings on porous PEEK, porous titanium and material modifications vs. surface additions. Industry has debated for several years about how to best move away from smooth PEEK. The verdict from the session as well as the new technologies launched in the exhibit hall indicates that the debate will continue, mainly discussing titanium coatings vs. titanium surface modification vs. additively manufactured titanium or polymer.
This is notable because coatings, materials and manufacturing—device design and production—is where smaller companies believe that they have room to differentiate, innovate and attract new surgeons. This is how they’re allocating their R&D and, notably, their clinical trials spend.
Between NASS meetings 2017 and 2018, we covered 48 product launches and regulatory clearances in the month prior to or at the events. Eleven of those 48, or 23%, were devices that utilize additive manufacturing, and nine of those 11 devices came from companies that we estimate post spine revenue below $80 million.
Smaller companies displaying additive devices with 2018 FDA 510(k) clearances last week included:
- Camber Spine and its ENZA-A Titanium ALIF device
- Captiva Spine and its TirboLOX-L lumbar cage
- Osseus Fusion Systems and its Aries line of lumbar cages
- Renovis Surgical and its Tesera X Lateral fusion system
Of course, the larger device companies have focused on the move to additive and titanium interbodies. Johnson & Johnson purchased Emerging Implant Technologies and its portfolio of additive implants in 3Q18 and Medtronic, Zimmer Biomet and Stryker launched new additive devices this year. Of course, as more companies focus on additive, the amount of differentiation decreases. Our sense from smaller companies, though, is that opportunity lies with surgeons who seek the intimate experience of developing new device designs.
We realize that additional market forces and technologies—ambulatory surgery centers, artificial discs and minimally invasive procedures—are shaping the spine market and plan to dig deeper into those topics in future articles. For now, however repetitive it may seem, there’s no denying that the spine industry is fixated on two concepts: procedure enhancement via surgical assistance technologies and device design via coatings, materials and manufacturing.