BoneChat #73 - UNPLUGGED - Strategic US sales discussion for a startup with a game-changing product.

Foreign.

Today we have Eminal. He's the CEO of Explant Lab and I'm not going to steal his thunder, but they've got a just a killer service that every orthopedist in the, every orthopedic patient in the world deals with is Alloy. Alloy, what do you call it? Inflammation or reactions. And he's got a genomics test that, that solves the problem. But he's got multiple products, multiple multiple tests and he's got multiple sales channels he's thinking about before he comes to the US So I'm gonna just hand the mic over to Eminol and be quiet.

Thank you. Let me just share my screen. Can everyone see that? Okay.

Yes, thank you.

Let me just go full screen on the presentation. Okay, there we go. So thank you for the time today, Tiger. I think, I think the idea came from, I think a previous conversation where we talked about anyone who wanted to get feedback on a pitch deck or business or what have you could put it up and get the shared brain power of the bone chat group to get feedback. We are probably about six months away from launch of our first asset into the US And I was chatting to Tiger about potential sales channels and approaches and he very kindly suggested that we share this on the call and get some feedback and brainstorm ideas on what might be a good approach for a starter of our size to really have an impact in the US so I've got about 12ish slides to run through, some of which are very quick. If there are any questions, please just jump in as we go. Tiger, could I ask you to just keep an eye out for raised hands? I can't see everyone.

Yeah, yeah, I'll be the model.

I'll take questions as we go if we need to kind of clarify stuff as we go through, but hopefully it'll be a shortish presentation and then a longer discussion. So sorry, just aligning this slide. So when we kind of started down this path, you know, we saw that most product development is generally being driven by manufacturers and focused on engineering based solutions. So I think we counted 4,200 different knees, you know, that have been available to surgeons over the past 15 years. Globally, a lot of focus on surgical technique, alignment, robotics, all sorts of innovation in materials, implant design, etc. And you know, more recently in kind of 3D printing solutions, but very little in terms of kind of patient factors and host responses. And this is where our organization has focused. So we have a vision that all patients will have access to fast and affordable pre and post Surgical testing just to ensure that they are genetically compatible with the implanted materials that are chosen for them. We know that implant surgery is not universally successful. There are, you know, patients with unresolved pain, joint issues post op and depending on the sources you look at, anywhere from 10 to 15 to 20%. So anything up to 20% of patients can have complications issues. I mean I'm talking longer term stuff here, not within a couple of months of surgery but as things settle and patients get back to normality. This is from the uk, has a great tracking system and this is data from there and just shows reasons for revision. So this doesn't include patients that come back and are managed for pain long term with different solutions. But this is what drives revisions and what we've seen is that metal hypersensitivity is generally under recognized but is a cause of poor clinical outcomes. We know that aseptic loosening and component wear frequently coexist with metal hypersensitivity and we know that hypersensitivity is often misdiagnosed as infection. What many of you may not be aware of is that about 15% of patients actually carry genes that increase their risk of poorer clinical outcomes with cobalt chrome and between 1 and 4% of patients carry a similar risk to implants containing titanium. So there's a genetic link between performance of the, sorry, patient interaction with the materials that are used for an implant. Over the past I guess 10 years of research we've developed and now patented a genetic test that can predict the likelihood of an immune response in pre surgical settings and identify active immune responses in post surgical settings. So this is the only test of its kind, diagnostic test. It combines genetic data with age and sex factors to accurately identify patients who've got elevated risk. And in a post op setting we also measure metal ions. And the combination of metal ions and genetics enables us to identify ARMD in that setting. So that's a very kind of quick overview of the product. Our initial research about 650 patients was published in Nature Communications. So we were delighted obviously to get accepted into Nature, pretty prestigious journal and pretty impactful research. Our follow on study to this arthrogenics it's called, will have twice these number of patients. Our first study was focused on cobalt chrome. The current study is focused on performance with titanium and zirconium. We should have that research finished probably by October and have the subsequent genetic tests for titanium early 2026. So going to take just a short pause there and just ask if there are any questions on that kind of quick Background, if you. Before I get into the next session.

Yep.

Elizabeth.

You're mute. Elizabeth, you're on mute. Sorry. Was it.

Is it Crohn cobalt and. I'm sorry, Elizabeth, go ahead.

Okay. That's okay.

Yeah.

I'm wondering, do we know what percentage of people are misdiagnosed as having an infection?

It depends on the papers you look at. So I think the last one I saw was from. There's about 44% of patients that came back had active alval and a large proportion of those had initially been worked up for infection.

That's fascinating. I mean, I know this is not.

The time to dig into it, but.

I'm just wondering what is the sort of thought process for the surgeon who thinks it's.

They present very similarly. So it's a T lymphocyte driven response which causes inflammation, tenderness, pain. So actually the presenting symptomology is very, very similar to an infection. So it's not a surprise that, you know, aspirations would occur and they go down that route to check for infection. Okay, thank you, Mark. Sorry, Mark, did you have a question as well?

Yeah.

So your initial study was on chrome, cobalt, cobalt chromia, cobalt, chrome, and then the secondary studies on titanium and what else?

Zirconium.

Zirconium. Okay, thanks.

Sorry, another question.

That's it.

Go ahead, Eric.

Yeah, I was just thinking. Is that you think about the treatment though. If they come in and they've got an infection, so a simple washout or antibiotic spacers, and they still have the issue with sensitivity to the material, nothing's going to come of it.

Right.

So even if they now explant everything, wash them out, stabilize them, they put back in the exact same materials, they're going to have the same exact issue again. Yes.

So if they. If the issue is is alvar and not an infection, then infection and infection treatment will make no difference at all. The patient will still be sensitized. Even if they clean out all the gunk that's in there, the response will just continue to occur because at that point the patient is sensitized to whatever metal is present. Okay, so we have four products that we've developed. We have a preoperative test that quantifies a patient's genetic risk of a poorer clinical outcome due to developing metal sensitivity. We've got a DTC version of that same test preoperatively. We then have a post op test and this is where we combine both the genetic sequencing with blood draw to check for metal ion debris. And that is used to Identify patients who've got a hypersensitivity response or an ARMD response with an implant kind of already in situ. And then the latest product that we've just developed and just registered with the MHRA in the UK is a test called Friction and that identifies wear and loosening of implants with a titanium component. So they're the four tests that we have and we have available in the UK currently. So obviously the, the US is a very attractive marketplace and just looking at it by the numbers and these are obviously kind of rounded but around 800,000 knee implants, 450 hip implants, 100,000 shoulder implants, 6,000 ankle and wrist, I think that's about 5,000 ankle, about 1,000 wrist. I don't know if I remember the breakdown. About 300,000 spinal fusions done and about 5 million dental implants done every year in the US so that gives around 6 and a half million pre op screening opportunities. About 500,000 post op screening opportunities. And with our pricing that gives a total market opportunity of around $7 billion. So the marketplace is, you know, is, is enormous if you just look at it kind of, you know, by the numbers available, the number of surgeries if you like with the pricing of the, of the products.

Kyle.

Yeah, so imino the majority in the U.S. probably 60% of trauma implants are now titanium. Historically everything was stainless and it's probably lagging around the world and still stainless. But most trauma implants in the US whether it's place plates, screws, I am nails, those are titanium. You're going to want to throw those into your total addressable market as well.

Thank you, I will look into that. Great point. Appreciate it. One of our biggest challenges, the total aside is you know, at the minute this has to, all this stuff has to be kind of, you know, sent off and genetically sequenced. We'd love to find a partner that can create an LFD that can identify the alleles that we're talking about. So you can move it to bedside as well for you know, for urgent trauma. But that's, that'll be a little bit down, a little bit down the ways for on the product development side of things. But that's certainly an interesting opportunity for future as well. Appreciate the comment Carl. Thank you.

So rough, rough math. Did I do my math right just now that you like a thousand dollars per screen is that you want to.

Take less for the pre screen, more for the more in depth.

Yeah, I was just adding it all together on the fly.

Give up. Yeah, give or take. You're about right.

Okay.

You know, we have to do some pricing sensitivity work around this, obviously. But as kind of a start with some of the conversations we've had, it's kind of ballpark. Okay, Alyssa.

So I'm actually really familiar with the data that you present that I came in late on. And spine fusions are a big target. Should be a big target. I think Celeste over at HSS Co wrote a paper that showed 40% infection rates. And now don't quote me on that. I heard this through the grapevine. However they have they also. What was interesting about the study is the infection changed over time. And that's something a lot of people don't know in industry in particular. The second thing is your spine fusion number should be above 400,000. There's over 400,000 total performed in the U.S. thank you.

That was the last data I found. I appreciate that.

And that was 2014 was when it was categorized. So it's probably more than that now. But the data hasn't come out for 2024.

Thank you.

But I think you're going to have big trouble. A big problem. Have you thought about commercializing direct to the consumer for 100 bucks?

That's just not possible.

Okay.

It's four to six digit resolution genetic sequencing.

So that's just so. I think that's the tough part is people. I think that's where you're going to have a challenge unless you get true reimbursement.

So can I just ask you to hold that thought? I'm going to come on to the business model and I'd love to get all the feedback when we get to that section, if that's okay.

Of course.

Brilliant. Thanks, Alyssa. I share this. Not to go through it in any depth, but just so you guys have got a feeling for when kind of the. When we kind of first started commercially, some of the milestones we've hit, some of the kind of usage we're getting. So we are being used by HSS in New York. We have one of the surgeons there who's both an investor and a research partner. We're starting to get therapeutic use use under therapeutic exemption in Australia. Some surgeons, they're very interested in the product and we're getting used now in Southampton Trust in the UK and just beginning a collaboration with B. Braun. So working with those guys in the UK and we were in Germany to meet with their research leadership team a couple of weeks ago. We've been invited to present at the British Knee Society this year and we've just had an invite to a panel discussion at AAOS next year. So that one is still in progress. So it's not kind of fully nailed down, but it's we've got it. We want to see who else is on the panel before we fully commit to attending that discussion. But just gives you an idea of some of the kind of the recent traction that we're getting. So this kind of gives you an idea of the kind of big picture what we're thinking about in terms of the value prop. Identifying patients at risk of poor clinical outcomes, identifying patients with armd. And we've had some feedback from a number of patients, a number of customers, should I say potential customers that have said they thought the test was really useful in terms of mitigation of legal exposure if patients were screened prior to implant selection. Because then you know there's been some kind of investigative work done prior to the implant selection. So if something does go wrong there's some level of protection there. So we thought that was really interesting. It's not a particularly positive message to sell from, so it needs some work to think about how it's positioned. But it was interesting feedback nonetheless. So target customers, orthopaedic surgeons, hospitals and manufacturers and then obviously patients through a DTC approach who are considering joint replacement influences our surgical societies. Kols malpractice lawyers if we do decide to kind of inform people around the legal side of things and then obviously insurers, patient advocates and the various online communities that they turn up in in terms of potential revenue streams is the direct sales to providers and hospitals, DTC sales director, consumer and then licensing to or partnerships with OEMs and potentially outcome data depending on the volume of data that's gathered and the agreements in place with that economics and scale premium justified by any kind of cost avoidance and improved outcomes. Consumer direct pay great to get FSA HSA eligible and then really looking heavily into the health economics to get reimbursement. We are looking to have a central partner for pathology testing, DTC distribution and then for future investments. We're very much going to need to invest in sales and marketing as you'd imagine, as well as future product development. Some of the opportunities like dental will require an extension to the current research just to make sure that everything kind of holds tight in the dental market. So expansion into spine, dental, other implants and then partnerships kind of briefly mentioned work with OEMs like We Are with B. Braun looking at big pathology organizations for testing and co marketing and then really trying to get Validation through academic centers, hospitals, as well as potentially advisory alliances.

Hand up.

Yeah, yeah.

Sorry if you mentioned this already. The test itself though, is it a saliva test, is it a blood test? Like what actually like happens?

Good question. I should have made that clearer. Thank you. So the pre op test can be done with a cheek swab or a saliva test. However, if you're testing post op, it needs to be a blood draw because we need to be able to.

Yeah, that's different. I'm thinking the pre op.

Yes. So the pre op can be done through saliva. With our initial test, with our initial research. I say in the uk all of the patient DNA samples were done through a saliva test and I think we were like 99% in terms of usable samples. So it seems to be a pretty accurate approach.

So nurse takes the swab in the office, then they go off to a lab.

Not even that, it can be done at home with a saliva sample into a tube as well.

So either or it's like a 23andMe and it takes. How many days does it take to get the results?

It'll depend on the partner that we use, but that results should be available comfortably within a few days for the pre op test. Okay, other questions.

So is this where we're going to stop?

I'm very quickly just going to share another couple of slides just to see if it prompts some. So pre launch, obviously getting the FDA filing. We're just ready to submit our pre submission. We met with the fda, had a couple of conversations. They are surprisingly interested. We had our first conversation with them and they'd already appointed a principal investigator and they had about 15 people on the call, including three immunologists and one of the FDA folks that we've done some previous research with. So they came out as pretty hot out the gates with interest in terms of this. So next call is to then define whether our initial submission is on target for what they're looking for. We're separating the pre and post op submissions pre op. We think we've got a strong predicate for 510 post op. There's nothing else quite like this, so that would be de novo. So we decided to separate the two and go 5, 10k for the pre op to start with so we can get something to market as soon as possible. We need to get the lab partner in place. Needs to be a lab that can do both next gen sequencing and ICP Ms. For blood metal ions. And we would obviously prefer a partner that's got full national coverage and ideally one that's got inbound marketing capabilities. You know, the big guys have got pretty good outreach themselves at this point. The lab needs validating and then obviously you know, reimbursement is going to be huge. If we manage to get reimbursement then that'd be a total game changer in terms of product adoption. So that's going to be, that's the, the big CSF for us in terms of terms of full adoption. Initially want to focus on getting you know, some early adopters, you build up some, some steam in the US and kind of expand from there. I think they're probably the, the key points on the pre op side of things. And then post op, you know, our plan is to, or should I say our goal is to get the kind of pre op approach as a standard of care or implant selection. So we have a pretty good idea of who we like as our pathology partners and we got a pretty good feeling for what we think the value prop will be, who the target market customers are. Our big challenge is the sales partnership side of things. We're a small organization, UK based and so we need to find the right kind of channel approach from a pure sales perspective like some of the influencer stuff and testing stuff. Hopefully we've got our, got our arms around inbound marketing. You should be reasonably straightforward. But the actual direct selling piece is what's currently kind of keeping me up at night. So this is where I was hoping to get feedback from the good folks on this call. In terms of what the ideal sales model could look like, what sales partner options could look like, 1099 versus W2 options, national versus targeted coverage in the first instances, all these kind of types of questions.

Kyle, you're first.

So this is probably not the sort of thing that displaces someone's current income.

Right?

They're not going to be all of a sudden have this huge windfall, make a ton of money. So you're looking for borrowed salesforce. What would you say is the perfect sales partner? By the type of products they already carry, the type of territory that they're in, the type of patients that those doctors treat. What like if you're mapping out whose bag this fits in the best, do you have that thought through?

If I did, I wouldn't be having this conversation with the folks on the call. Kyle. So this is, I don't know the US market hugely well. So that's what I'm trying to kind of pick my way through is, you know, who the ideal sales partner is. You know, clearly A partner that understands this space and you know, the metal hypersensitivity space is, is useful. But there aren't so many of those big players. I think there's only Smith and Nephew really in the US now that ask your lab have withdrawn from the US So I think being in the bag with those guys would be a tough ask. We actually had a contract with Smith and Nephew in place for about 18 months and they were awful to work with. So I actually closed that contract down about six to eight months ago.

Patrick.

Who owns the company, like who are you? Not necessarily by firm, but like, you know, how are you funded because you're who your investors are matters a lot in terms of pace. A lot of times it's the investors that want the companies to go faster than they really should if they want to get it right.

So we've got to where we are just through angel investing. So about $2.1 million of angel funding over the last three or four years. So majority owned by the founders and a small handful of angel investors.

Okay, so that's good because I think you could probably screw some things up by trying to go too fast, too quickly in a rush to sort of just like sell as many units as you can as fast as you can. So I'll let others. I'm gonna have a million other questions, but I'll let others go.

Wheels are turning. Go ahead, Mark.

One of the reasons why I invited Carl is that he is CEO of a product in adipose derived stem cell product that is cash based. So there's no reimbursement.

Yep.

And I'm going to invite him to relate a little bit, but I'll let him do that on his own time. There is 4%. There's 4% of all orthopedic surgeons now operate on a cash only basis. And many of them focus on total joint replacements. And as I'm sitting here thinking about that, I'm wondering what a great niche that could be because one of the things that they might be interested in doing is taking a high value test like this for a high value patient client and maybe bundling that with other high value extras as sort of a package or bundle. Anyway, the wheels are turning. This is a very.

Mark, that's a really. That's a really interesting. That's a really interesting thought. In the US I've not even considered that. You know, we are looking at health tourism markets and in the health tourism markets, you know, where you have wealthy individuals who are going to travel to get a joint replaced. Yeah, we think it becomes exactly that. It becomes part of the bundle of, hey, you know, we're the hospital that genetically tests you before you have your joint done. And it becomes part of the kind of the value prop to a high value patient. But I hadn't, I hadn't made the connection and thought of that in the U.S. so thank you.

A concierge service for wealthy people.

Yeah, 4% are cash only. Another 3 or another like 5% or concierge. That's another probably kind of similar or analogous market. Anyway, I got, I, I'm like Patrick, I got a lot of other questions, but I'm going to shut up.

All right, Karen's up next and then Alyssa.

Yeah, not the expert here, but just a couple of comments. I'm based in the US Actually working for a European company, so I empathize a little bit. But we're in the digital health space. But I'm concerned about a few things. One is I would, I would slow down. That's the first thing I think you're to come to the US without reimbursement is a recipe for, in my opinion anyway, as a recipe for, for suicide. I would stay in Europe. I would get your clinical data, get your business, business model actually embedded in, in the NHS in maybe continental Europe or whatever. And meanwhile, in parallel, get your. Either. I'm not sure where, if FDA comes into this. I didn't, I'm not sure if I saw that, but. Oh, you mentioned fda. Yeah, sorry. But also the reimbursement can be a very long and winding road and I think if there's nothing, if it doesn't fall under an existing code, going for a new code is very, very tricky. And I think coming over here and focused on the, I mean, Mark, Mark knows the market way better than me, but focused on concierge tourism is, is not going to satisfy investors or it could be a massive distraction for you. So I, I'm urging caution. I, I'm not a scientist. I don't know the efficacy of the product, but I'm just, I have experience selling European solutions in the US Market. We didn't, we don't need reimbursement, as it happens, but I've done it before with a different diagnostic and it's, it's a tricky area.

So. Thank you.

Well, good, good, good comments, Alyssa.

I would definitely echo that. I have been on the sales side. I've been in the clinic side. I've also been in the executive side and I've been in thousands of cases of the total Joints, the thousands of cases and just specific to total joints, there was probably one really bad infection a year. So you're. I don't think that the market, the general market is your market, particularly if you don't have reimbursement. And also those surgeons will not postpone their cases. I think any. At the complex institutions like hss where they get a ton of infections, they get the worst of the worst cases. They already, when they get there, they already know that those patients are infected and they already know what their, their, their issues are. However, I do see a value in like foot and ankle because there's like charcoal. A lot of diabetic patients, patients in that population. I also think that you have a research opportunity that could be huge. Comparing the before and afters to products like GLP1 calming the. Because GLP1s calm the inflammation. I'm wondering if you could do a before and after surgery and to help propel sales for the GLP1s, using it as a sales tool in partnerships with pharma companies.

So I just wanted to clarify. The product's not for infection.

It's a DNA sequencing. If I'm correct, that's preoperatively done. And it takes 30 days to get the data back to say that this patient is likely to have an infection issue.

No, it's not an infection issue. Sorry. It's a metal sensitivity. It's an ARMD issue.

Okay, so metal sensitive, but you had four different products.

Yep. It's all, it's all, it's metal sensitivity. It's Alvalor arm there.

And each of the products had their own specialty. Okay. Like metal sensitivity. That's not going to be a mass seller.

We're losing your.

Oh, I'm sorry. I'm driving.

You're kind of going in and out. But let's go, let's go to Carl and then Patrick's up next.

So I, I, you know, everybody's kind of piling on this, this reimbursement thing. And, and yes, I've, I'm eyeballs deep in, you know, getting a new code and that. So, you know, you're talking about, you know, when we get reimbursement, is there a pathway? Like, have you, have you mapped out a pathway to reimbursement? And, and then, you know, just a secondary question, you know, so I was a, you know, in Spine, corporate spine, for, you know, with JJ and Stryker for quite a while. And, you know, for the, the metal testing for the sensitivity, you know, there were some, you know, they're Rudimentary. They're not anything like what you're talking about, but where we'd, you know, just put it on the, the doctors would put it on the skin if there was a concern.

Keep it to the armor.

Yeah, you know, so I don't know, you know, you know, I know that's, that's, you know, riding a bicycle and you've got a Ferrari. But, you know, how do you, you know, have you looked at that? And what the, you know, that's actually.

That'S actually one of the biggest challenges is that testing that's out there at the moment is crap. Patch testing doesn't work, Melissa. Testing is 50, 50. So you get lots of, you know, false positives, false negatives. So one of the reasons, one of the big reasons that metal hypersensitivity is not actually taken more seriously is that there's never actually been tests with any degree of accuracy that actually give results that are valuable or actionable. So there's definitely a kind of a work of education to be done to kind of show what the issue is and can't say too much because we haven't published the data yet. But we now have clear outcome data showing the difference in outcomes in patients who have cobochrome joints and who carry the at risk genes and those that don't. So we're getting to the point now where we have, you know, much, much better data. But there's undoubtedly an education job to do here because, yeah, the previous tests have been pretty poor to say the least. And sorry to answer your first question, and we're just now starting on the health economic work for reimbursement and I didn't put that sentence down as if it was a slam dunk. Having worked in the pharma industry for 25 years, that's a huge mountain for us to climb and will be the difference between a modestly successful approach and a much more successful approach if we do manage to get reimbursement. So big hill to climb, undoubtedly.

Well, the 510 here does not mean anything as far as reimbursement, so.

Yeah, fully aware of that. Yeah.

Yeah. So, and, but there, you know, there's also, you know, as far as the DNA testing there, you know, there's some, you know, some, some, you know, wouldn't call them predicate device, but that's what's on my brain. But, but, you know, there, you know, there are some have been some tests out there that, you know, that they've been able to, to bill for. But, so she'd look into that. But, yeah, that's it. That's a, It's a big, big, big hurdle.

Patrick, another just like basic question. Who presumably is actually buying this? Like, who's writing a check? The doctor's offices or the healthcare system, if the physicians are employed, that, that matters a lot in terms of, like, who you hire and who your sales personnel, who they're used to calling on, what types of sales they're used to, to making things like that, who's actually buying the product and are they buying. Presumably they're buying in bulk. They're buying boxes at a time. Right. They're buying hundreds or so at a time, I would assume.

Right, yeah. So in the, in the UK, we, we sell it in kind of bundles of 10 boxes, 10 tests directly into the hospital for use with, you know, in the office, doctor's office, with a patient, surgeon, directly to the patients. That's, that's the approach that we're using in the, in the uk, we originally went through the pathology labs. Our partner in the UK is nhsbt, so it's actually an NHS testing lab. But the NHS is just such a car crash to try and work with that we actually found it was more difficult trying to work with hospital pathology labs to get the test on the path lab, a system to get it used. And it was far easier to get it ordered just through the surgical suite if we provide the boxes ourselves. So that seems to have been a better way of approaching the market in the uk.

Yeah, this is probably obvious, but regardless of if Your Salesforce is 1099 or W2 or some sort of mix, the ease in which they can sell into private practices, because this is an office test, will be so much higher, like so much easier and faster than if the physician is employed by the hospital and everything runs through the hospital's purchasing department. Even in these private groups that have gotten a lot bigger, they're still orders of magnitude smaller in terms of, like, their overall sort of purchasing spend. And smaller is better in this, in this case, smaller means faster and, and, and easier. I wouldn't even try for a while to even bother trying to sell into hospital systems unless you had a surgeon who was really willing to go to bat for you and willing to expend a lot of sort of political capital within their institution, because to walk into a big hospital system and ask them to start purchasing in office tests based on one doctor sort of liking the product when there's no reimbursement, I mean, that's a big hill to climb. Rather than I think it's a lot easier to convince a couple of doctors, you know, within a practice that they should. They should adopt this for their, you know.

Yeah, thank you.

Use that.

Then they will be thinking in terms of, like, part of the sell, I think, here is competitive like that once somebody does it, the guys across the street don't want to be the ones who are not doing it. They look sort of irresponsible if they're. If they're not doing it. And the, you know, a big difference. I've worked for European companies for many years, so you may know this, but I tend to resort back to one of the fundamental differences between orthopedics or medical devices here versus Europe is that here the doctors have to compete against each other for patients in a way that they just sort of don't. In Europe, a mentor of mine. I hope no one takes offense to this, but a mentor of mine called most European doctors highly prestigious municipal employees almost. If they sort of just show up, they're doing their work, and then they're going home. But here they're running independent businesses. They're competing against each other. They think of the guys across the street as like the people who are trying to sort of take food off their table. So I do think that there's a competitive dynamic that in any individual city, or even on a smaller level place, you know, places where there's like two main orthopedic groups in a city or in a state or something like that, and especially if they're private, that will help quite a bit.

That makes sense. Thank you.

So, Alyssa, put a comment in. The nickel wrist disc doesn't work well, but it's free and it checks a box off for defensive medicine. It's also rarely used, and pricing is going to be the key. So I think the thing we don't know is that, I mean, people don't want to admit that they don't know there's a alloy reaction ahead of time or even after. Nobody wants to know. And now for the first time ever, we can know. That's a. That's a big challenge.

Is maybe education.

Marks. Mark's up.

Does anybody on the call have a law degree? The reason I ask is that it seems to me if you have.

A.

Published paper that says 15% of your patients are going to have a reaction, whether a scale of 1 to 10, whether it's a 1 or 10, and that becomes well known, that becomes part of the standard of knowledge, then that would proceed for some sort of standard of care to have a better testing system than we do. Now if you do not have that, it seems like you may incur some sort of liability. As a practitioner, we all know that there are tests being done every day that are, quote, unnecessary or may be deemed unnecessary, especially if they're negative. And yet they're done routinely because of the perception of liability or the perception of additional risk if you don't do them. And this could easily fall into that category. 50% is a huge number. What's the cost of that? Who bears that risk now? Who would care? I guarantee there's a bunch of attorneys that once they learn about this, may be interested in learning more.

Yeah, we have had some interest. Our founder does some work, some medical legal advisory work in the kind of space with failed joints. And a couple of the practices that he works with, especially in the US have asked questions about the testing and when it'll be available. So I think there is, it's a very small cohort. You know, we're talking about a couple of practices that we speak with. But there does seem to be some initial interest.

Mark, can I dig down on that 15% number that you've been mentioning a couple of times? So if 15% of patients stop me when I sort of, I'll eventually say something incorrect. So just stop me when I do. 15 of patients have a cobalt chromium sensitivity.

Yeah, 15% patients carry the gene that predisposes them to a sensitivity reaction.

But then like what, what percent of that 15% does it actually matter in? Because there's no way that 15, you know, if a million needs get replaced, there's no way that 150,000 of them are coming out because of metal sensitivity every year.

No. And metal sensitivity is, the reaction is kind of grading on a scale. It's linked to concentration. And we have very pretty clearly established thresholds now above which point the it becomes an issue. So, so if you imagine it as a, as a kind of a four box grid, you've got concentration of metal ions along one axis and the level of risk due to the genetic predisposition on the other axis. If you carry the genes, but you have a perfectly performing joint, say you're kind of bottom left, then you're fine. However, let's say you have a mildly elevated level, you're not going to be symptomatic at a very mild level. But if you've already got metal debris, that's only going to increase over time. So in that instance, the patient should be tested every six to 12 months to make sure the concentration of metal ions isn't increasing, because once it hits that threshold, the patient is going to develop armd. So it depends on the performance of the joint and the level of metal debris. So it's a measure of risk. It's not saying that kind of 15% of all patients, it's saying 15% of all patients are predisposed to the risk depending on the performance of the joint that is in situ.

So do you, do you have a sense then numerically of like that 15 gets whittled down to what in terms of like.

Yeah, so some percentage that it.

Like that it actually should matter.

So in. Oh, why have I forgotten?

By, by matter, I shouldn't clarify. Like, by matter I mean like kind of qualitatively things that like, would cause a patient to show back up into a doctor's office for a doctor to think there's a failure. Those types of things. Not just like, I'm at home doing okay, but 5% worse than I might have otherwise been.

Yeah, so, so, so the paper by Lombardi and 44% of patients that they measured in their cohort that came back with pain, 44% of them had active army.

Okay. So yeah, I mean, I would get going on a. As powerful of an economic study as you can. To Mark's point. You know, you could see dots getting connected where people start thinking it's almost irresponsible and you want almost product position that it's like that it's almost irresponsible to not do something like this. And don't underestimate the fear of, of especially I'm stereotyping here, of course, but Europeans tend to underestimate the fear of legal action, especially amongst, in the medical system, amongst us surgeons. And you can't lead with brochures, you know, talking about, you know, hey, you know, you can sort of never met. It's like a huge unspoken thing kind of all the time that you don't brag and you don't put it on a trade show booth. But it does play a big relevance into how people think. I would also just be aware though, like your numbers, like have them, they need to be so sort of tight and irrefutable, you're about to like step into major shark infested waters here that there is a multibillion dollar industry of people who sell cobalt chrome. And if you're going to come along with a test that tells them that 15% of those patients that they're selling cobalt chrome to, and by selling, I mean not just the companies, but I mean all of the doctors that are running basically assembly line surgical factories in their office and in the hospitals and to like come in and interject yourself and say actually 15% of these people are predisposed to, to, to metal sensitivity. You thought it was 1%, but it's actually 15% that's going to be very disruptive. And they're going to. Their instinct is going to be to find reasons to say you're wrong for blah, blah, blah, blah, blah. These types of reasons, even if they're only processed reasons that they think that having to add another people are sensitive.

It's just on the spectrum of sensitivity.

Yes, right.

So I mean it's really commonly known and they'll ask it are you, have you ever shown any. Worn a wristwatch and showed sensitivity? People for the most part know if they're sensitive and. But the thing is it's on a spectrum and that's why they do the patch test. There's blood tests. I can tell you out of the thousands of total knees and shoulders and trauma and sports medicine, foot and ankle, there's probably been less than 20 that have actually needed to be all the implants taken out and then put back in spine. There's a, there's a much larger percentage of.

My question is how do you know.

That'S because the screws and I think it's because the screws get reprocessed over and over and over in the machines because they're titanium screws traditionally. Yeah, I agree 100% that the numbers have to be viable and I believe that, that you have an opportunity here to capture a market. But you're in an uphill climb because a surgeons are not going to postpone their cases for this test because the rarity and the severity of it is low when it comes to pulling it out. I do think at the teaching institution levels and the research levels there's a big opportunity for research. But metal sensitivity, while it's known, it's again on the spectrum, I just think.

I think it's very poorly understood. And it's interesting what you say about how many cases because I would argue the challenge is nobody knows how many cases there are because the only way previously to test is through histology and people aren't taking metal ion levels and they aren't doing histology to test for albal. So we've had the conversation numerous times with folks who've said to us, you know, that I don't think it exists. I've only ever seen one or two gross reactions. And then when you get into it, you find there's no screening, there's no accurate testing, and they actually don't know what they don't know. So I don't disagree with the outcome, which is the same thing, which is it's going to be an uphill battle because it's not well recognized. But I think folks who say they've never seen it don't necessarily know that to be true because they've no.

They know it to be true. Yeah. Anything with nickel in it, they know it to be true. I don't think we're going to have a.

We're not talking about. Not talking about Nikola. It's a huge confusion and a huge. A type 1 mediated skin response to nickel is very different to a type 4 mediated cobalt chrome. Absolutely T lymphocyte driven. So I think that's one of the challenges. It's misunderstood that you do a skin test for type 1 mediated dermatology reaction that does not correlate at all.

I completely agree. But if you're looking at the revision rate, if you're looking at the overall revision rate on the market and you have a 96% success rate in total hips across the globe, it's going to be an uphill climb is what I'm trying to say. The. And we can tennis match this all day, but I'm trying to do you a favor because I think you have a really good product, but I don't think it's going to match the market at the opportunity that you have pitched.

No, I think that's the size of the market. So the opportunity that we're actually able to access is obviously going to be markedly smaller than that. That's the total number of actual, if you like, opportunities that would be there for usage. But I don't for one second believe we're going to become a $7 billion organization. I appreciate the import list, I truly do. I think it is a very challenging market for us to enter into because there are entrenched ideas, entrenched practices, and there are folks that know will not want this to be true. So appreciate everything you're saying, but I.

Think patients will buy this on their own and that's typically the market that they're buying it at. They're buying the blood sensitivity tests and people are very curious about their own health. And yeah, it may not pay the bills, but it at least brings in data, initial, initial money too, revenues for the company, and then it guides you which direction to Go. And it shows. It could be a phenomenal opportunity for patients.

I got very similar advice from very two wise individuals called Tiger and Mark about two months ago. They agree with you 100% that a director patient could be a very interesting start to kind of gain a foothold while we're expanding. So, yeah, appreciate the insights, Kyle and then Patrick.

Yeah, I don't disagree with what Alyssa was pointing out, but one counterpoint would be that even these gigantic companies that sell, you know, a couple hundred thousand knees a year are still pursuing titanium bearings and ceramic bearings, all under the expectation that there is some level of demand somewhere about metal sensitivity. Whether it's, you know, how quantifiable the reality is or not is arguable for sure, but there's something there. But one of her main points that I think is really, really important for you is you're going to struggle to be disruptive to an existing business model. So perhaps from the front end, you need to focus your efforts on where does your business, your product align with the business model that maybe isn't so near term. So you might want to be thinking about players that are more in the patient specific space where there is a time delay and it's a perfect opportunity to inject something diagnostic in the front end because there is a time delay anyway.

Restored companies like that.

That is one I had written down.

Yeah, interesting. Just, it would just be an extra $500 charge.

I mean, they're going to build something special anyway. They might as well know if they're going to build it out of X or Y material based on a test result.

That's a really good point.

Really good point.

Yeah. And so as far as keep an eye on 3D systems and 3D side as well that are playing in this space, that are more of the suppliers, but are trying to get into more of the production and ownership element of it.

Thank you.

What about allergy specialists? They test. I mean, this could be fantastic. I mean, completely outside of orthopedics. Maybe orthopedics is not your market. Maybe it's the allergy specialist market. They're the ones that will prescribe this. And the physicians actually send the patient to the allergy specialist if they assume that there's a likelihood that they have an allergy to an implant.

That's a great point. Thank you. Written that down. Yeah. So not something I've looked at, to be perfectly honest. We've been so focused because all our research is in orthopedics that we've had the blinkers on in that respect, for.

Sure, because I have a unique perspective because I worked in the office for years as a tech, and so I understand that pathway. I think that's your market. Does anybody think that that would be easier? That would be an easier pathway.

The.

Allergist that fits into an existing system, right?

Yeah. You're not recreating something. And the allergy specialists, patients, even if they're not getting implants in, the allergy specialists are going to test. They test for all sorts of things on the skin. But now you're re. Now you're creating a market with that already has a pathway and already has reimbursement in place.

Somebody that's scheduled for a knee operation, usually they're. They're, you know, they don't go see an allergist.

No, the. No, no, no. If the. If the patient comes into the clinic and every patient gets asked the question, do you have. Have you had issues with your earrings or your watch or anything like that? Any kind of skin issues? And if they do, they automatically get. Typically, at least my surgeons did, they would send them to an allergy specialist to make sure that there wasn't a high rate of it, Especially people that answered that question definitively. Yes, they would go automatically to allergy specialists. However, there are patients that are constantly. Have inflammation and they go. They seek in an allergy specialist on their own, and it might be due to an implant in their body. It might be due to wearing an implant. They don't know where those sensitivities lies. So they test for, like, hundreds of different allergies sometimes.

Really interesting point.

Now.

Yeah. There could be patients who've got, you know, you say go on for allergy testing. They've got, you know, gross inflammation or universal inflammation. And, you know, maybe they've had a hip replacement or a knee replacement. And, you know, this could be an additive test if they're getting, you know, multiple panels done. So I'd be interesting to speak to a couple of allergists and dig into that one for sure.

I have a really good one in St. Louis, and he's very much so on the regenerative side. He's doing all sorts of GLP1s and so on, so forth. I will be happy to connect you. He's very curious and he's. He. He likes pioneering things.

That would be. That would be really appreciated. Thank you. Excellent.

And Instead of doing one or two a week, you might have 20 a week per physician.

Patrick.

I think getting to the. Getting some, like, real easy to regurgitate thinking of like how salespeople would deliver types of messages. Something on. I think there needs to be more fleshed out and maybe you just know it. And it wasn't conducive to a presentation in this format. But on this, people who. Because Alyssa's right on this like in terms of a spectrum, like it is like the metal sensitivity is a spectrum. But like if you baked into all of these sort of like product positioning assumptions is that like people are doing worse than they otherwise would because they're walking around with knees that they have some degree of metal sensitivity and they're doing worse than they otherwise would if they had I guess known about it and gotten an implant made out of different materials put in. But like that's just like. I don't think you'll get too much pushback that like you're saying that's incorrect. But like figuring out how to like.

Yeah.

Tie it together in a, in a, in a. I hate the word narrative, but that's the first word coming to mind of like getting the, the story around that of like why it's impactful to, to community, Dr. XYZ in their location. I think that's really important because if, if the. And just to try to answer these questions that you have up here, like, I would, I would not put this in the hands of 1099 people right away. I think there's way too many unknowns that you like, you guys as a company need to better understand the, the 1099s. They're gonna like the, the distributors and I assume you mean distribute like third party distributors. Yeah, yeah. That they're, they're good at like a real specific thing, but I don't know that this is it. And it's. They're much more sort of physics guy. On average, they're more physics guys than chemistry guys. And you know, they're used to like stuff in the. Or, you know, especially, especially the, the bigger networks. They're, you know, they're. They're just. There are not all of them, but in general it's much. Especially talking to orthopedic surgeons. They're much more, you know, angles and momentum and friction and loads and those types of things rather than, than, than chemistry stuff that they can't see with their own eyes. So I would be a little nervous to like just say, like, let's tap into as many independent distributors as we. As we can, at least from the get go. I, I don't think there's a. You could hire. I would hire somebody and put them in the right geography and tell them like we just, no matter good, bad or whatever, we want you to report back everything you're, you're finding out.

Right.

You know, and give them freedom to say people don't like this or I'm screwing up or whatever the case is. But to just like say like, let's just go like get in a big map coloring exercise I don't think would be advantageous right away for something like this.

Yeah, thank you.

I kind of pushed back on that a little bit. And the reason why is because I saw so many distributors profiteer massively off of compounding of drugs and prescriptions and so they totally sold outside of their lane. However, there was a huge financial benefit there that I don't think can possibly exist with this one. They point. But I, I think you're, you definitely have something.

You're right about. It was the money.

I was going to say that, that, that one was all cash. Yeah, that motivator, not the. And you know, if you look at the, the DNA testing and Mark, you may have been involved with, with the DNA testing because that, that was a flash in the pan too that insurers paid for DNA testing one time and it would tell, you know, what, you know what, you know what, what drugs you were allergic to. Same, same kind of thing. But just for, for the drugs. And I, I don't know a ton about that because I was doing different things. But that was hot for, you know, for a short minute too. And then, you know, that was only paid for for once. But, but it was those 1099s and independent networks that went out there and were hustling because it was such a big profit margin. Mark, were you involved in that or the.

I, look, I looked at it just kind of, just kind of like I looked at compounding and the, the rate of return was so extremely high that it just kind of made me feel like I just want to bet or I was going to wind up on a talk show or maybe in. On an exclusion list for fraud. I'd stayed away from it. Oh, you know, something that like that was, that would just seem too good to be true.

That's like stem cells, stem cell injections.

Yeah.

No, I wouldn't say that.

Yeah, no. Platelet rich plasma and bone marrow are awesome. Actually. There's great data. Yeah, great data.

You don't sell one bone marrow aspirate make 25 grand.

That's true.

That was the, it was just the enormous profit that just made me stay.

Away From I was the exact same way.

You know, if you'll do some research into the, into the, the DNA testing that was as I said it was probably a 2014 2015ish.

Yeah.

Flash in the pan.

We are, we are under NDA with three major labs. So we've been making good progress there and I'm hoping to be able to get kind of get some conversations with their folks that focus on the reimbursement and the coding. And so we know for example that metal ion testing for titanium and cobalt chrome does have a code. So there is a code exists there. So what I don't know is if that code is something that can also be used when you start adding in the genetic testing to go with it post op that could be a totally new code. Obviously new code will change potentially what the reimbursement level looks like. So hoping that the folks who do this for a living at one of the PATH labs can at least point us in the right direction because they do the genetic testing and the metal ion testing on a daily basis and they do have codes. We've come across some of them online. Now how easy it was for them to get those codes is a totally different question. But I'm hoping they can, you know, give us some, some better insights.

Well, the, the, the, your, your approval is going to have you know, everything to do with if those codes are applicable because if you don't have the right indication with your approval, those codes, you know, don't mean anything to you.

Yeah.

So you know, get it getting the right person to, you know, to, you know, to, to run that strategy or you're making sure you, you, you pursue it out of the gate is huge.

I know we're kind of bumping up on time but you know what would be a really cool fun project em and all would be to do a big survey and get some big influencer, several hundred a year total. Joint gurus. Ask them their thoughts, educate them on the numbers and your research and the European experience. Tell them it's non reimbursable. Figure out, ask them how many patients they think would pay and then take that same survey to the allergist for example to see what their thoughts would be. To take it to somebody who's used to cash pay, you know, the quasi concierge or the cash pay docs that, you know, two or three research projects might wind up giving you a lot of time and money.

The allergist piece and the concierge piece. I agree with you 100%.

Yeah.

The surgeon piece makes me really nervous. I mean, last year there was the big meeting in Istanbul that came up with a position paper and basically published the skin patch testing for nickel was the gold standard. So if that's what the experts are getting together and saying at a big meeting, it, it makes me nervous that without being able to do the relevant education, you know, we're just, you know, throw a noise into an echo chamber.

I wouldn't work, honestly, I wouldn't super worry about that. I mean there's, there's major retrospective studies that show only a 2% revision rate in spine. And like I have surgeons that say to their patients there's pretty much 100% likelihood after about 15 to 20 years you're going to have to have another level fused. And so like, you know, that's the thing about research, there's an opinion for everything. But I think you being aligned with HSS and getting some grants to get some money in and do the actual research and understand have two different market pathways or three different market pathways will really dial you in very well in what, you know, two, three years from now looks like.

Yeah, great advice. Well, look, I've got, I've got several pages of notes here and I think kind of thematically hearing that, you know, kind of the DTC approach, you know, could be a good initial approach to get some usage and some experience in the US but that kind of coming to surgeons prior to having clear reimbursement with reimbursement codes is something to be considered with real caution because if we don't have that, then, you know, getting the uptake is going to be challenging and then taking a bunch of notes around, messaging around, you know, the liability side of things, the positioning of kind of patients doing worse than they otherwise could have in terms of, you know, the pain scores, etc. So a lot here for me to digest and think about. So I hugely appreciate the brain trust that's kind of given the feedback today. Thank you so much.

Yeah, it's every, I could see everybody's wheels turning, you know, when em and all and I first met, you know, I told him right off the bat, I think the big total joint manufacturers don't want to know. They're gonna, they're gonna, they're gonna fight this, go hard and they're gonna tell their kols to fight it.

Yes. That's why I said you're swimming in shark infested waters. There's a billion billions of dollars of industry that doesn't want your numbers. They want Those buried.

Yeah, it's, that's why it's an education play. And, and when you go direct to consumer, you can, you can do.

The.

Whole, you know, sales panel.

Yeah, I thought, my first thought was let's get this guy on Joe Rogan or some big podcast and set that, you know, conspiracy mill going. They've been keeping this test away from you for years.

It would be nice though. It would be a great marketing campaign. I mean look what they've done with mis and female knees and, or gender specific knees and robotics. It would be a nice campaign for a company to go, we actually care.

The natural Smith and Nephew because they have the cobalt chrome non technique stuff, you know.

Yeah.

They're idiots though.

Well, if they could use it to, to upsell the patient too. That's the other angle.

I mean, the original conversation with Smith and Nephew was they wanted this as a companion diagnostic. They were struggling to identify patients and they were struggling to get approval for more expensive implants without something that said the patient actually needed it. And we had some very interesting early conversations. And then as always happens, the product manager of Roxinium left, went elsewhere and then wasn't replaced for six months. And you lose momentum and then a new CEO comes in who's focused on robots and.

Yeah, was that with people just in the UK though, or was that with people here?

No, that was with people here. It was the guy in Memphis who was the global product manager. So it was, it was a real shame that it lost momentum.

Yeah, they're, they're, they could be the big winner if they played it right, but they, they don't understand it. Yeah, robots are sexy. All right, well this has been great. Thanks for everybody's extra time.

Thanks everyone. Appreciate it.

Any follow ups you want to have em and all, you know, why don't you, why don't you tell everybody. Do you guys want his email address? Just put it in the chat because I know there's gonna be offline. I know there's gonna be offline discussions.

I sent you a LinkedIn request, Emanuel.

Right. Thank you. Appreciate it. Lyssa.

Happy, Happy to help. I apologize if I came across across a little.

No, no, not at all. The challenge is important because, you know, you were. Everyone thinks their own baby's pretty, right? Till someone else looks at it.

Alyssa is very nice person.

Well, I, I firmly believe if it's not the initial path, there's got to be a way. And so it, you know, that's, that's the thing of business. There's always a way.

Well, we're. We're speaking at Basque next week and we're sharing the data from our unpublished data from our orthogenic study. It will be fascinating to be in a room full of the top knee surgeons in the UK and getting a real life response from them. That's where we'll get a real feel for. Okay, is this data actually hitting? Are they making sense of it? Do they get it? Will they change practice? So pretty excited about getting live feedback from those guys because that'll tell us how hard the climb is, Tiger.

I'm going to close with the best sales advice I saw this week. I cut it out in the newspaper, so just stop talking.

I love that. That was. Last week's sales discussion was awesome. That was. There were so many pearls of wisdom in there, and one of them was good. Salespeople don't talk, they just listen.

Yeah.

All right, thanks, guys. It was. That was great.

Thanks, everyone. Really appreciate it.

Picture of your wife, was it Mark?

No.

It could have been, though. I've heard that.

Thanks a million. Thanks, Carl. Bye, Carl.

You.