#44 - Discussion with Episurf US leader, Patrick Jamnik.

Brought to you by Tiger Buford.

Welcome back to Inside Orthopedics. This is Tiger, your orthopedic industry insider and retained recruiter for early-stage orthopedic companies. This is episode number 44 titled EpiSurf Medical. a discussion with Patrick Jamnik, who is heading up the US business. Episurf has brought the new technologies of print-on-demand and patient-matching design into the early OA space. This is going to be very interesting. Enjoy this discussion with Patrick. Remember to subscribe and happy ortho.

All right, we are live with Patrick Jamnik. Welcome, Patrick.

Hi, Tiger. Thanks for having me.

Yeah, thanks for your time. Yeah, so I've been watching Epic Surf for a while. I just really don't know much about it, so I'm glad you could spend some time with us. So tell us kind of how you got involved, or go back to the beginning and tell us how you got into orthopedics. Sure.

So I always describe— so my orthopedic career started with Zimmer. I sort of always describe Zimmer as the team that drafted me. And I got into orthopedics like many people within the industry do, sort of by happenstance. For me, it was I needed a summer job for a couple of summers while I was in college, and I ended up working at the local Zimmer distributorship. Doing all of the kind of back office things, putting instrument sets together, honestly sometimes rebuilding the shelves and moving, you know, moving the sets of implants around, running implants to hospitals on an emergency basis. But I really took a liking to the business and was invited back for a second summer in more of a kind of formal, I guess you could call it, sales internship role, and then started with them full-time when I left. And this is in Wisconsin. And stayed with Zimmer for eight years in a couple of different territories. Then, while I was in what what ended up being my my final territory with them, I went back to to school at night at the University of Wisconsin and did the the three-year evening MBA program, and kind of realized during during that program I wanted to do something slightly different. You know, not go and be an accountant or anything, but something a little bit different, and ended up. Through a professor there, got put in touch with a gentleman who became the CEO of a British-based orthopedic company called Stanmore Implants. And Stanmore was my sort of first opportunity or first foray into sort of leaving all of the cozy confines of big companies and going into the startup world. And I was one of the initial team that kind of started and built the US business for Stanmore Implants, which was an orthopedic oncology company. And we, you know, we built that up a little bit, and I guess perhaps you could say just got just big enough to start to be annoying to the big incumbents, and Stryker ended up acquiring that business in 2016. So I stayed there at Stryker then for a couple more years after and helped with the transition and actually enjoyed my time at Stryker a lot more than I think I ever was expecting to. But kind of had that once you're part of a dynamic and fast-moving small company startup, there's always sort of that itch, I think, sometimes to go back to that world and ended up spending a year in an Israeli-based cardiovascular company called InspireMD. Was only there for a year before I realized I kind of really wanted, I think, to get back into orthopedics. And then that led me to EpiSurf in 2021, towards the end of 2021. Now, EpiSurf was a company that I had followed for for a number of years and had numerous conversations with our CEO in the years that had kind of predated that, and it was really sort of more of a timing thing. But I've been there, been here, you know, we're coming up, I guess we're getting a little closer to 2 years now.

Okay, and that's— is it based in Dallas?

The US operations are based in Dallas, but the company is based in Stockholm. We're a Swedish company.

Right, right. Okay. All right. Tell us— so, yeah, tell us about the origins of Episurf, you know, from Sweden and where the idea came from and how it all started.

Sure.

How it got to the US. Yeah.

So we're a company that was founded by a surgeon, and that's really important, I think, to us. And the fact that we were founded by a surgeon has played what in hindsight now looks like a pretty obvious sort of progression. But it's sort of pivotal to our entire sort of story. So we were founded by a surgeon professor named Leif Read. Leif was at the Karolinska Institute in Stockholm, and when he was in his late 50s, Leif started having some pain in his own knee. And like a surgeon would, or like you could expect a surgeon to, he quickly did some sort of self-diagnosing. And realized essentially that he had early arthritis. And he tells the story better than I could, but the— that he knew right away that all of a sudden, given his age and given his condition, if he were his own patient basically and he were to walk into his clinic tomorrow with his own condition, you know, Leif the surgeon would basically be telling Leif the patient, Well, you really— like, we don't really have a lot of good options for you, so what you need to do is sort of just manage this the best you can and come back in 5 or 10 years, and we will give you a knee replacement at that point in time. And all of a sudden, he describes how when you're the patient, you know, that sort of hearing that news and that diagnosis, it takes on a whole new meaning to you. And something that you may have said to patients over and over and over for so many years, You all of a sudden have zero tolerance to hear something like that when you are your own patient. And that's where this kind of concept or this idea of the gap patient really took hold within EpiServ. And it's something that we talk about all the time. So, and I'll get back to the gap patient in a minute, but Leif basically kind of gave up or forego the last couple of years of his clinical career and then started EpiServ with this idea of— There has to be a better set of solutions for people, you know, sort of caught in between what are traditionally thought of as sports medicine solutions and traditionally thought of as joint replacements or arthroplasty solutions. That basically there's a meaningful subset of patients that are just sort of like, you know, just kind of stuck. And these people, you know, they need something better than— this constant sort of carousel of injections, bracing, physical therapy, you know, over and over and over again, that they need to have better— you know, there needs to be better options for these types of people. And that's sort of how we got our start. We got our start from a surgeon having problems with his own knee and trying to come up with better ways to treat people like himself.

Got it. And this was like 2008, 2009? Yeah, exactly.

Yeah.

That's right. Got it. And what were the first ideas? And I mean, this is before 3D printing or anything, or a lot of surgical planning, you know, sophisticated surgical planning. So what were the early ideas?

Yeah, so the early ideas, you know, I think things like 3D printing and sophisticated planning, they certainly were nowhere near what they are today, but they were in their infancy. You know, I remember back at that time, I think first was Biomet, and we had them at Zimmer eventually, but everyone started coming out with these different, you know, sort of PSI guides for, you know, different cutting guides or alignment guides in total knees. But the initial idea was, well, let's make a portfolio of customized implants to treat— I'll call it early arthritis, but essentially sort of like osteochondral defects in the femur, whether they be on the condyles or in the trochlea. Let's come up with fully personalized, meaning both the implant and instruments, so everything matched for one patient off of an MRI, customized implants for osteochondral defects of the femur. And that's where we got started. In fact, the first patients hit their 10-year mark just last fall. That's where we sort of got started, and it's grown, of course. I'm sure we'll get into how the business has grown and matured, but that's where we got started, was just on personalized implants to treat osteochondral defects of the femur.

Based on MRI or CAT scan?

Yep, yep, based on MRI. So all of our products, and still to this day, all of our products in the knee are MRI-based, where we've got a sort of custom protocol that is mostly 2D sequences, but a A small subset of it is 3D sequences, which we use largely for implant design purposes. And all of the implants are inlay, and, and yeah, all based off of MRI.

Got it, got it. And so, all right, so it's like 2009, you know, early 2010s. So what was the first use in Europe or Sweden? Yep.

First in-man use was in the fall of 2012. It was a Swedish patient, and he's featured on our website still. He's competed in and won several cross-country skiing competitions, and we've got pictures and videos up of him back at full activity levels. But even though there was implants that sort of have been out for 10 years or so. Because we were surgeon-founded, it was really, really important to the company to not sort of jeopardize Leif's long and decorated clinical career by just rushing a product to the market too fast that sort of wasn't the right product or where there was imperfections in it. So we spent a lot of time energy, and focus as a company to really crafting a clinical plan and a clinical program that for a company of our size, I think, is pretty impressive. We wanted to really make sure that what we were doing had a lot of scientific merit to it and that the patients were followed up correctly and we had all of our sort of processes down and we were making the right implants for the right patients.

Patients.

And by that I mean sort of we were doing the software part of it correctly, and, you know, as a result of doing the software part correctly, the hardware product was going in right, both implants and instruments. So we spent a number of years in the early— or a number, you know, many of the early years in Empysurf's history were really sort of clinically focused, even though there was a product with a CE mark out there. It's almost like a It's not exactly the typical orthopedic story, which is sort of like, you know, get a product on the market, go sell as many as you can to whomever you can under any situation that you can. We really spent a lot of time and energy to prove that what we were doing had a lot of scientific muscle behind it.

Yeah, that's a lot of discipline. There's 2 ways to do startups. One is just get something cleared and start getting clinical experience. And then iterate the product. And the other one is really take the time to develop the best product and then prove with clinical evidence that it works. So it's probably more unique. So how was the company funded in the 2010s?

Sure. I mean, early it was just, you know, very, very early it was funded just through, you know, like high net worth individuals and kind of friends and family type of rounds. But we are publicly traded on, and have been for many, many years publicly traded on the Swedish Stock Exchange, the Nasdaq Stockholm. And that's probably a little bit unusual to many US listeners. We certainly fit the profile of a company that if we were US-based, we would be funded via venture capital or private equity or those types of vehicles. Yet it's very, very common in the Nordic countries that life science companies, so pharmaceutical, biotech, medical device companies, it's very, very common and there's hundreds and hundreds and hundreds of them out there. It's very common that these companies are funded or sort of go to the public markets Frankly, much earlier on than— or, you know, much sort of in a much more immature state than EpiSurf is, you know, pre-revenue. It's very common over there.

Yeah, it's a different— maybe it's the socialist nature of the countries and everybody kind of looks after each other a little bit more. But I've definitely seen that trend. Interesting. So they went public early. And that provided some money to do the development, do the hard work with clinical studies.

Yep, that's right. And, you know, we were, you know, early on, we're well past this point, we're years past this point now, but, you know, if what we were doing wasn't working and wasn't showing to benefit patients, that would have been it for the company. We really did put a huge emphasis on I'll call it responsibility, just sort of lack because I can't come up with a better word off the top of my head. But on being, you know, on doing things sort of quote unquote the right way and in a responsible way, and that that ethos, that mindset, that demeanor that still persists in in how we deal with you know individual customers and individual surgeons on a on a case by case basis, which I'm sure I'll get into in a little bit as we kind of. Talk more about the product and technologies.

Got it. Okay, and, and so just kind of keeping the timeline going, so the CE mark was obtained and sales— did they— did the company sell in Sweden and Europe for a few years before?

Yeah, yeah, yeah.

Okay.

Yep, the bulk of— yeah, and to this date, the bulk of The bulk of the business lies in Germany. You know, I know you know how the European markets work, but it's you can get a CE mark for you know that that covers most of Europe. But every country has different you know different registration processes, different reimburse you know different you know different reimbursement structures, different different pricing and stuff. So so a good portion of our sales always have come from always have come from Germany. So despite being a Swedish company. Most of our European revenue has come from Germany.

Yeah, it's the 800-pound gorilla there. Yeah. So what year did they venture into the US? And we could talk about the business model a little bit there first before we get into the technology.

So I think as a— if you're a European medical device company, you know, there's always an eye on the U.S., and it's more of a, you know, usually it's a when question or a can or, you know, a how question. So there's always been an eye on the U.S. I think sort of the company's first steps towards the US business came sort of towards the latter part of the last couple of years of last decade. Some of the earliest products that we made or the first products that we made and have sold in Europe, there's not a good predicate device for those and therefore they're Class III. They'll need an IDE study. So most people listening probably know how long those take and expensive those are and those are not projects that are measured in weeks. They're measured in years. And so the company wanted to get that going first of all, knowing that might be the first thing that started and the last thing to finish, get that activity going, and then introduce a whole other group of products while that was ongoing in the background. So some of the earliest steps taken in the US were really around Getting FDA approval to conduct an IDE trial, getting the protocol for that done, getting some early sites, you know, sort of set up. And it was really sort of IDE-related activities. It was more sort of still clinical activities and not really commercial, frankly, until after the pandemic sort of largely sort of ended.

Okay. Oh, wow. And so when was FDA clearance? So are the surgeries in the US done under trial right now, or is it FDA cleared?

So both. I mean, there are certain products that are under an IDE trial, and then there's other products that are FDA cleared. So it really sort of depends on what it is that we're sort of talking about.

This is a good segue, Patrick. Let's talk about the product now. What are the offerings and, you know, how are they— you know, I'm familiar with a couple previous companies. ArthroSurface, I know Ed that started that way back in, I think it was maybe 2011. They sold to Anika like 3 years ago. And then Bio— I know Herb at Biopoly. I think they started in 2006 or something in Indiana and sold to Zimmer. A few years ago. But tell us about the technology and how you guys are sort of different. And a lot of times the best, you know, the best products come from not the first company in a space, but usually the 3rd or the 5th or the 7th. So it's really interesting.

Yeah, I've got a smile on my face hearing you say that because I think we sort of I think in terms of differentiation, there's a number of things that differentiate us, at least from the companies that you mentioned. But central to a lot of that is really our planning process. So when I say personalization, that wraps— there's a couple of different things that sort of get wrapped up into that. There's a customized implant, there's personalized instruments, there's customized planning. But this whole sort of pre-surgical planning aspect that is involved in every EpiServ case, I think, is what both sets us apart and also has kept our clinical results as strong as they are. I mean, we, at our core, we make sort of what I'll call mid-continuum of care implants on that sort of, you know, those sort of left-to-right sliding scales that we've all seen a million times. we sit right at the middle. And anytime you sit right at the middle, surgeons who are interested in potentially using your products, they are like viably considering other surgical solutions slightly to the left or to the right of you on the continuum of care. And we're like aware of that. And of course we want to sell as many implants as we can, but more importantly, we want to make sure that the— Implants that we sell are going into the right patients and for the right— I hate to use an overused phrase— like the right intended use of the product, to sort of throw some regulatory definitions in there. And because of that, in Europe, for example, where we sell femoral implants to treat osteochondral defects of the femur, the knee, we've got a contraindication if those patients have a, you know, have some— have beyond a certain level of damage to either their tibia or their patella. What's, you know, what's going on on the opposing side of wherever that defect is. And because we're using these MRIs before we ever even, you know, have a machine hit metal, we're able to see a lot more information than people may otherwise be able to. see in their normal sort of like workup. And we have to tell surgeons many times, we don't like having the conversations, but we really are, we can't, we have to. We'll tell surgeons like, you know, look, there's a grade 3 bone marrow lesion on the medial plateau of this patient's tibia. It's contraindicated for our implant. I'm sorry, we just can't take this case on. And that might be a little bit of a frustrating Conversation sometimes, but it there's just a because we're making these products individually, there's a level of off-label. There's a level of complicity with off-label usage that we just can't be a part of if we're seeing things on the scans that are direct contraindications. And as a result of that, first of all, like we're just we're we're we're involving our customers in a level of like pre-surgical. thought process and presurgical planning and care that I think is making sure that our implants are going into the best patients or the right patients for them. And then on top of that, we're introducing a set of personalized implants, and that's really sort of sexy to talk about. And the implants are curved, the surface— we're contouring the surface geometry of the implants, right? to match up with the patient's native anatomy. And that's— those implants look incredibly sort of beautiful once they're put in. But our instruments are allowing a level of precision in placing these because these are implants that we're asking metal implants to work in harmony with all sorts of native structures, native bone and soft tissue structures. So the level of precision needs to be sort of spot on. It's not like a total knee where if it's a degree or two off in any direction, those people have done just as well as as if they're spot-on aligned. And because of that, the instruments that we're making are per patient, and they allow a level of depth and precision that I just think wasn't available with previous generations of this same concept. The concept has always been very, very solid. And what I think is— I think we're sort of the overlapping Venn diagram of the concept being solid, being matched with the sort of modern imaging and manufacturing technologies that can really sort of take this to its sort of real potential.

Interesting. Yeah, I remember the original arthro surface basically just came in, you know, 2 radiuses. You know, you had an AP radius and an ML radius, and you sort of got what you got, and you sort of had to figure out how to put it in.

Exactly. And if you have an implant, like if you have a Like a metal implant in the femur that is unopposed, so there's native cartilage on the other side, be it the tibia or the patella. If you leave those implants proud, it can cause, you know, it can basically act like a plow on the opposing surface, and that's really, really bad. And we stress that over and over with our instruments and with our surgical technique of the level of depth of putting these in is really, really important. And it's just something that prior to, you know, patient-specific instruments and really, really sort of specific guides, it just, you know, it was very, very difficult sometimes to achieve.

Yeah. Yep. That's a lot of discipline, which is going to pay off in the long run. That's— and so what's— tell me about the implant. What's the implant made out of? I remember the ArthroSurface was just all cobalt chrome, and then BioPoly was a treated polyethylene, and I think a titanium.

Yeah, so all of our— everything we make right now that's commercially available, all of our femoral implants are all cobalt chrome, and then they are sprayed with a layer of titanium around that. And then in Europe, there's an HA layer that's sort of sprayed on top of the titanium. So there's a— you know, they're— In Europe, they've got an uncemented label. In the US, despite the sort of materials that I just mentioned, there's an uncemented— or I mean, there's a cemented label on them. But it's a cobalt chrome implant at its core, and then that's sort of sprayed on top of it for some scratch-fit interference.

So bone ingrowth grows around the rim basically of the articular surface?

Yeah, and what we've— exactly. What we've seen in some of our histology studies is that the cartilage can grow. It certainly doesn't grow over the top of the implant. That would be, you know, like an enormous scientific breakthrough. But it does grow right— we do get a little bit of what we sort of call chondrointegration, where the cartilage does grow up sort of right up against to the implant. It does create sort of a a seal around the edge of the implant. You almost get like a little shoulder of cartilage that can grow right up, just barely around the edge of the implant.

Interesting. Cartilage is so complicated. Nobody's really figured it out yet.

No.

So many biologics companies— there's a graveyard of biologics companies trying to And small implants make a lot more sense than a lot of these biologic treatments. So let's talk about the patient population. You know, I know a little bit about this from active implants. We always called it the donut hole. It was people over 40 that were too old for biologics treatment. And then people under 60 that were too young for total knee. And they went through a lot of what you were talking about early on. They were candidates for microfracture and mosaicplasty and braces and drugs.

Uh-huh.

And they're sort of in a no man's land. So what's the ideal patient? Just kind of walk us through that. You guys get a call from a surgeon saying, I've got a patient that may be a match?

Yeah. You're spot on in your age description of who we think of as the— at least within the bell curve of the patients that are right for us. It is these people Loosely defined as between the ages of 40 and 60 who are kind of aging out of a lot of the efficacy of the sports medicine types of procedures, just as you, you know, the body's ability to reheal itself beyond a certain age just starts to diminish. At the same point in time, many of these patients are just not ready, both in terms of The level of damage to their joints and also their age, they're just— they're not ready for some sort of, you know, partial or total knee replacement. I had a surgeon recently— we talk about this idea of the gap patient. We talk about this with every surgeon that we meet with. And I had a surgeon recently tell me, he said, I had a 55-year-old in here recently who I was talking to about having a total knee. And the patient said like, well, no, my mother is 79. She just had her knee replaced. And people in this age group, you know, they don't think of a total knee as like their operation. They think of it as their parents' operation.

Yeah.

And, you know, so it was tough. And it sounded like based on the surgeon's description that this patient really did need a total knee. But that's a tough pill to swallow for someone when their parents just recently had the same operation. They think of that as like the next generation. I'm supposed to have that later on. And to the extent that, you know, where we sit in the orthopedic ecosystem, it's to, you know, sort of move those procedures. So in the knee, it's a total knee, and in the foot and ankle, it's sort of arthrodesis types of procedures, you know, fusion of the ankle, fusion of the toe. We seek to sort of like— those procedures were always designed to be kind of end-stage procedures, and we want to get them back to being considered like that end-stage procedure, sort of the final operation. There has been, in large part due to this You know, really lack of a better lack of better options. There's been this kind of very gradual like age creep of like take you know total knee replacement for example. It used to be you know this is only for people who are seventy-five and then seventy is the new seventy-five and then all of a sudden sixty is the new seventy and it just you know it just keeps getting younger and younger and younger. But those younger people don't do as well.

The British joint.

British Joint Replacement Registry, you know, it shows those people, the younger and younger you get, the more and more complications that you get.

Yeah.

Even at the early intervals, 1 year, 2 years, 5 years, those younger patients still do worse and worse and worse. So our goal is to sort of, you know, play a role in the age of these middle-aged patient population and, you know, get them, even if it's just, even if we can buy them 10 years, 15 years, we have no evidence to say suggest that that's the lower limit right now. But even if we can only, you know, to take someone who's 55 and be able to get them out to 70 before they have their knee replaced, that's a meaningful difference in their quality of life. And that probably, you know, that probably takes them out of revision arthroplasty sort of likelihood. And, you know, there's huge benefits to that.

Yeah, I think we'll look back in history and say, can you believe that we would actually cut The entire— all the cartilage off of the femur and tibia just because there's a medial defect and a little varus angle. I mean, it's gonna be— we're gonna— what were we doing, you know?

Totally.

And it's driven largely, you know, the marketing muscle of the big 5 orthopedic companies drives this. Every total knee surgeon has a hammer and everything they see, you know, looks like a total knee. You know, and yeah, it is crazy. And not only to mention, you know, why are we cutting the PCL and we're changing the kinematics of the knee and it doesn't feel the same? I mean, patients will tell you if you have your PCL, it feels natural. When you don't have your PCL, it's just different.

Yeah.

Yeah, interesting.

I joked with it. I was joking with someone the other day that— and everyone in the industry knows this sort of profile, but the same surgeon that will not literally throw a mallet at you in the OR, but will get all sort of worked up intraoperatively about moving a cutting guide in a total knee a millimeter in any given direction, will get very upset about the movement of a cutting guide in a millimeter in some direction. And then we'll turn around and just think nothing of cutting off an entire centimeter of perfectly healthy lateral compartment.

Yep.

And that'll happen within a 3-minute time interval. So we want to sort of— there's levels of damage. Cartilage is not going to regrow itself. And we need to fix that. And it's bone problems really that are causing pain. It's not necessarily the cartilage damage. It's the underlying— By the time the patient gets symptomatic, it's due to usually pain coming from the bone. And we want to treat just the damaged area and sort of preserve all of the rest of the native natural anatomy and let that patient get back to their optimum levels of activity afterwards and get these end-stage procedures sort of more towards the end stage of a patient's life, not squarely in the middle.

Yeah, yeah, I totally get it. So what's— so do you guys have history of— I mean, we have patients 10 years out. Do you have history of converting an EpiSurf to a Total D?

So thankfully, there's been very few devices— there's been very few devices revised so far, and because the products are all customized, we think we have a pretty good handle on the ones that The numbers that are revised, because our assumption is, you know, usually if one of our products is going to get revised, we'll be contacted at least by the revising surgeon to want to know, you know, how big is this, how small is this, thick is this, you know, just so they can plan accordingly. And all of the revisions that we've seen, again, low numbers, have all been usually just more sort of generalized, you know, revision due to progressive OA. No implant failures, no breakages, no loosening, no anything like like that. And in Europe, we make a pretty slick sort of revision guide that allows the surgeon a real precise level of ability to take the implant out very carefully. But basically, once our implants are out and the surgeon makes their normal sort of total knee progression of bone cuts, they might see where the peg hole was for our implant, but again, that's only like 3 or 4 millimeters in diameter. But they'll see where the peg hole was, but otherwise it's like we were never there in the first place after the sort of normal progression of bone cuts were made.

So the thickness of the cap is less than the resection that's done?

Yeah.

Are there cases where you, like a medial compartment implant, and then there's progression in the lateral compartment? Trochlea or lateral compartments, do you go back and do sort of an additional product without going all the way to a total knee?

We can certainly do that. And in fact, as more surgeons have gotten comfortable with our technology, specifically in Germany, we've seen more and more of that. I wouldn't say too often going back 5 years later, for example, and putting another product in because I think our planning is doing a good job of sort of identifying where the problem areas are. before the first surgery ever takes place. But for example, if a patient has a damaged area in the trochlea and a damaged area on the medial femoral condyle, we see more and more every month, we see more and more usage of multiple implants of ours being used in different spots throughout the knee. It's almost like spot welding, we call it spot welding of the joint. It's like the surgeon is opening up the knee and just sort of dropping in a couple of implants in just where the damaged areas are. So we see many situations like that. I've seen situations of 2 and 3 implants being used. And certainly if there was a situation where the patient had progressive OA but contained to a specific area, there's no reason at all that they couldn't just add another Epicerc implant in as they go. And again, keeping that total knee out there for another day.

Got it. Got it. This is great. So tell us about the US organization. What's— how many people are there and what's the— I mean, paint a picture of kind of what the US business looks like.

Sure. So for the first couple of years, like we talked about ahead of time, the US was really a clinical project, I guess you could say, running an IDE trial. And really We didn't really even get too much, you know, sort of started too heavily on the IDE trial until after COVID sort of wound down. Yeah, you know, you can't— it's very difficult. It's difficult to run IDE trials in the best of circumstances, and COVID caused basically all activity to sort of not progress too quickly. But then once I came on board, I was the first and to date am still the lone U.S. full-time company employee. I don't know how long that will carry on for, but everything else we're able to do still so far via a network of, you know, third-party regulatory consultants, clinical consultants.

Clinical.

We have a building distributor network. We're up to 20, almost 20 distributors, and may well be past that point by the time whenever this broadcast. So it's a growing organization, you know, pretty quickly, but we've been able to keep the full-time headcount, I think, pretty, pretty minimal. And some of that is just because we don't have any instrument tray, you know, we're not— we don't need— we don't need sort of that operational piece to it like other companies may, because all of our, all of our products are customized, both implants and instruments. There's no such thing as an EpiServ instrument tray that exists anywhere around the, anywhere around the world. There's no warehouse of inventory anywhere.

So, and let's talk about that. I didn't touch on that. So the The implant is designed and manufactured in Sweden, and so are the disposable instruments?

That's right. I mean, throughout Europe, but the final shipping, they come back to our office for final inspection, and then they ship out from Sweden. So we've got, for example, we've got a patellofemoral product that got cleared right at the very end of last year by the FDA, and we're sort of ramping up, scaling up that business in the US right now. Those scans get uploaded, the plans come back to the surgeon within a couple of days, the surgeon approves the plan, or if they want changes to the surgical plan, they can make that, of course. And then once we ship everything out, we ship everything out basically in like a dictionary-sized box, both the implant and the instruments, metal and plastic.

Wow.

We ship everything out and it's all sterile. And the implants go in, the instruments get used once, and then Discarded. And, you know, it's like it's a distributor's dream because they don't have to go to the surgery, you know, they don't have to go to the hospital or the surgery center the day before to drop off, and they don't have to come back the day after to pick up. And there's no walking around sterile processing looking for a lost instrument or anything like that. There's like, honestly, it's 4 instruments and the whole thing, you know, it's all— it shows up from us sterile and ready to go.

Well, that's beautiful. That's the future, is one patient, one instrument. Yeah, companies underestimate how much time and cost it takes to just track down autoclave instrument trays all the time.

Oh yeah, it's— yeah, and then, you know, you have to, you know, you're arguing with the hospital on who pays for the missing instrument and how much they pay, and then you have to refill the set. And it's like, it's a whole employee, you know, it's a whole sort of side business of just managing inventory, and we just have We have none of that.

Yeah, that's beautiful. So what's the total— what's the typical timeline from a patient is seen by a surgeon and they say let's do an EpiSurf? Is it like 6 weeks or—

6 weeks, yeah, good question. It's 6 weeks from when the surgeon approves the plan. So they can do surgery 6 weeks after they approve the plan. That's the timeline that we prefer to kind of speak about and go under because after a surgeon approves the plan, basically we as a company, we don't need anybody else for anything else. We don't need the rep chasing around the doctor asking them to approve the plan. We don't need— we're set to go. We can sort of push a button and activate a lot of things and we don't need anything else up until the day of the operation. So, if a patient came in and the MRI, it could happen really fast, the whole sort of Up to plan approval, that could happen within a couple of days if the MRI machine was in the doctor's office and they got the patient scheduled really quickly. So some of those things are out of our control. But the 6 weeks from surgeon approval to day of surgery, that's the sort of timeline that we talk about.

And that's totally acceptable. It's an elective procedure. It's no problem.

Yeah, we don't get— I mean, of course everyone would love it in 6 days rather than 6 weeks, but the pushback on 6 weeks has been very, very minimal so far.

Gives the patient some time to do some physical therapy and prepare. So what products are cleared in the US and what products are under trial right now?

So in the US, the only product that's cleared today is just the patellofemoral product. Anything that is what I'll call one bone or sort of femur only, that's under an IDE trial. right now.

Got it.

So implants for the trochlea by itself or for the condyles, that's under a trial right now. But for the patellofemoral product, where we've got a product both on the trochlea and the patella, that is commercially available. And we're, you know, we're active building a distributor network for that right now. In addition to that, we haven't spent too much time talking about the the foot and ankle sort of side of the business, but we've been working for quite some time now and are working close with a former ACFAS president on an implant for hallux rigidus, for the first— for the arthritis of the big toe. And that's— we're hoping that that is sort of cleared by the FDA. The submission should go in in the not-too-distant future, and we're hoping that that is cleared by the FDA sometime in the first quarter of next year. And that's something that's occupying a lot of Headspace right now and time and energy to get that finalized and out to the market as well.

Cool. Yeah. Yeah, the patellofemoral arthritis is— everybody calls it the overlooked joint, you know, compartment of the joint. It's a lot more common than people believe.

Totally.

Yeah, and it's also a unique If you have arthritis in only the patellofemoral, you know, it's— and you have healthy condyles, it makes no sense to do anything else. And it's a real sweet spot, I think, opportunity. And then plus you can do the sunshine x-rays, sunshine view x-rays, I think is what it's called, or sunset.

Right.

And you can clearly see the arthritis there. Yeah, that's a really good place to start.

And I think we've got— our product has been really well received by surgeons that we're showing it to. And I admit, like I'm admitting or have admitted, that I overlooked one of the main reasons why, and that's because I think the patella itself and what we're doing to the actual patella itself is just different than people have seen before because we're making an implant that is personalized, like off of the native anatomy. We're recreating the curvature. Everyone else's patellofemoral products that are out there, they're just getting standard total knee patellas. The patella itself is—

It's a dome.

Yeah, total abscess. They take out a sagittal saw and just cut straight across and just drop a dome on there. But anyone— surgeons know this, of course, and anyone who knows basic anatomy knows that The patella itself is a highly irregularly shaped bone. From the apex of the patella, the high point of the patella, how it drops off, the medial side and the lateral side, those are very different. The medial side drops off at a much steeper but shorter interval. The lateral side is much more gradual and elongated. We're able to replicate that in our implant design. People are like, wait a minute, you're personalizing the surface of the polyethylene? The answer is yes. It sort of shows really well and it really perks surgeons' interest enough to hear about that. And that's been really fun to talk about and something that I honestly, admittedly, I wasn't really expecting until we sort of got into it.

Yeah, that's really interesting. Yeah, if you're matching that lateral facet, that makes the implant and the patella really stable because the patella always wants to move laterally. And once you match that with the femur, it's stable again. That is interesting. I didn't think about that either.

Yeah, it's really— and really we took the existing— we just took a lot of existing processes, segmentation and receiving of scans and producing instruments. We were sort of just doing the same thing on the patella that we had been doing on the femur, but it really seems to be of interest to surgeons when they When they see how the implant sits in there, and again, it's inlay, so it's sort of totally secured around the edges. We're getting that tension right too. It's a finicky kind of joint where if you improperly tension it, those patients can come back in a lot of pain and a lot of frustration. But because we're sort of recreating the surface anatomy perfectly, we're hopefully helping surgeons avoid either understuffing or overstuffing.

Yeah, precision is really important there. The forces are huge. Yeah, through the patellofemoral joint. Well, this is great. This has been really helpful. Is there anything else you want to add before we wrap?

No, not necessarily. I mean, if anyone who's listening to this, you know, please feel free to send me a message on LinkedIn if you wants to talk more, and particularly distributors that might be out there and are looking for something that, if this sounds like this might be of interest to their surgeon customers, of course we're happy to talk. We're really bullish on where we are and where we're headed. As we get further and further into talking about the company with US surgeons, I think the more excited and enthused we get. That's been really fun because we've got a lot of evidence to talk about what we're doing as well. I sort of joke with surgeons that I'm friendly with and I say, you guys are impossible to please. If we show you something new, you ask, where's the evidence? Then if we show you something with evidence, you complain that it's old. What we're able to— one of the things that attracted me to the company initially was this. I've seen very few companies that are able to walk this kind of fine line or walk this tightrope of sort of like new and innovative and proven at the same time with evidence. It's a fine line to balance, but hopefully we're on our way to doing it really well.

Yeah, that discipline, the clinical discipline, will pay pay off in the long run. It's just the upfront cost, but it's the right way to do things. Yes. Yeah. Patrick, well, we're— so where can people find out more information other than LinkedIn?

They can go— Yeah, they can, they can, you know, someone can certainly email me, patrick.jamnik, J-A-M as in Mary, N as in Nancy, I-K, at emptysurf.com. They can also go to our website. Our website has a lot of information out there, patient videos, surgeon information. There's a lot out there. I think in part because we are publicly traded, we're pretty out there and pretty open as a company. There's quite a bit of information that's out there. We're not hiding behind some sort of cloak or anything.

Excellent. Well, this is great. I know the viewers or the audience will love this. Thanks for your time, and I'm sure we'll talk again in the future. I'll be watching at the surf. Thanks. Okay, your time, Patrick. Sounds good.

Thank you, Tiger.