BoneChat #86 - The JointSave Consortium, a new business model thought experiement.

This is Bone Chat 86, and, um, we sort of bubbled up a, a, a thought experiment. Uh, it's been a lot of different people that have said we've got all these joint preservation, spine preservation, I don't know, sports medicine, soft tissue preservation technologies in these small companies, they're having a hard time seeing the light of day because of resources, because the big companies own access, you know, because the regulatory pathway, because they don't have enough funding, whatever. Why can't all these small companies glob together and and create a consortium and compete against the big guys. So I'd like to take us through— I don't know if you can see on my screen, I kind of have an agenda. Why don't we— this topic, we could go for hours on this, but I'm trying to control it to 1 hour. So let's talk about the problem and opportunity of the lack of preservation technologies on the market. And let's talk about a potential roll-up business model. I call it joint save.

We—

it's just a placeholder. What would that look like? And then let's talk about execution, next steps. How could someone package this together, sell it to a private equity group, and kick it off? So let's— does that sound like a good place to start? Everybody?

Yeah, yeah. Yes, it does.

All right. So who, so who can articulate the problem that's out there today? There's a lot of people on the call have been involved in kind of joint preservation. We had Brad on last week. He articulated very, very well how a lot of people get total hips. Prematurely and in their 35 to 60 age range and they don't need a total hip. There's other, there's other technologies that can delay it. And he's working on a great, great one. So, but so I wrote this article and let me share that if I can. So I'd like for somebody to sort of kick off the discussion here. What is, what's the problem that we're trying to solve? What, and what's the opportunity? You want to, you want to take it, Brad?

Just, I talked a lot last week, but I'm, I'm happy to take the mic again and start the conversation from—

set us up.

Yeah, yeah. I mean, I mean, we, we run into this all the time, and I'm sure anybody in this space, you know, can, can, can comment on this too. It's, you You know, I was actually talking to a 29-year-old this morning who needs a total hip replacement. And he's just had some really bad treatments in his past. And he just, he's just in this bad situation where he needs a hip replacement, but he's too young for one. But he's in kind of no man's land too. He doesn't have a good, he doesn't have a good option right now. And it seems like people that are trying to provide solutions for that patient population, are just facing enormous struggles to get funding. And I can speak from our perspective. I mean, we've been trying to get funding for years and raise some real capital and put some real fuel in the car to go faster, and we just haven't been able to do it. People say, that's interesting, but it's orthomedtech, and we're just not interested in a PMA path product for, you know, too much risk, too many regulatory hurdles, and too long for an ROI. So We're just gonna check out there. So what we've done is we've bootstrapped the idea through grant funding and we've been successful doing that, but it's a slow way to do it. And I'm still struggling every day, where are we gonna get the capital to get this to the finish line or get enough data in the door to show somebody it's worth investing in? So this is a topic near and dear to my heart and everything that we're trying to do at Cytek's Ortho, but I'd love to hear other perspectives on it too.

You know, one thing I'd like to add, this is not necessarily something that just delays, you know, a total joint for somebody. If you can catch the disease early enough, you can probably reverse it. So, you know, I think we should look at it both ways. You know, here's something that if a person is, is, you know, too young to receive a joint or other therapy, that we could delay that long enough for them, which is a win. But also there's possibility to heal patients beforehand. As I was telling Tiger Buford earlier, I'd worked on a project in this space in spine. And chronic low back pain is the You know, it's the largest chronic pain condition in the US, greater than the total joints, the big joints. But you have this huge gap between steroid injections and fusion or arthroplasty. And these patients have to suffer through that. You know, there's years of suffering before they can, you know, get this total joint that, you know, if they had been actually treated, maybe they wouldn't have ever needed it. So, um, when I was at Medtronic, we had a product that was just a, uh, little squishy spinous process device that went between spinous processes and offloaded the facet joints and, and the, the, uh, the disc. And there's actually a lot of, uh, people who got healed. You wouldn't have thought it, but they had rehydration of the disc. Um, if, if that didn't work, if they were too far gone, at least it bought them like 10 years.

Interesting. Interesting. Uh, Tom, do you want to talk about Tom's, I mean, uh, poster child for early OA?

I don't know if that's good or bad, Tiger. Uh, is my, yeah, I guess I'm talking here, talking this. Yeah. You know what we've come across? We, we've been on the market 5 years. We passed our 5th year May 27th. And we've done a series of different types of patients. You know, I think that, that 25 to 50 or 60-year-old trying to buy them time before that total joint is what we set out to do. But we've had a number of professional athletes, high-demand athletes that have actually gone back to play for a substantial amount of time. One of our early patients, she had her first S4 when she was 34. And she's still playing AVP at age 40. And so it's pretty, pretty profound. And we have other stories of 14-year-old pitchers, baseball pitcher that, you know, instead of having some sort of boats or whatever put in his, in his elbow, the radio cap, tell him he's been able to use our product and went back to pitching, is actually pitching in college now. So there's those, but that, that sweet spot is that, you know, that pickleball player that's 40, 45 and does something and, and needs something to buy time between when they, when they have that injury and, and that total. So yeah, we've got a lot of experience in it, but same, same way with everybody. We've been running on fumes for a year and a half now, and we can't raise the capital. We have the data, we have contracts, we have all of that. But it's kind of an interesting field because people just don't understand it, and there's really not a dominant player in that for them to kind of hits their wagon to say, okay, here's where we can go. Um, that, that it just hasn't been accomplished yet. I guess Vericel would probably be the closest.

And so the, the, the challenge for you, Tom, the little guy, is lack of capital, not a big sales force, um, indications. I don't know, what are, what are the—

what are—

yeah, no, those are good questions. It's, it's capital. And, you know, capital yields, you know, that leads you to the bigger sales team and all of that. You know, for us, we have very broad indications. We have some joint-specific indications like for thumb arthritis and so forth. We need more joint-specific indications in order for people to be able to say, okay, I'm marking this for the femoral condyle, right? You know, that, that's, those are the things we need that just cost money. You know, I think it in our, in our approval for the CMC to get, marketing language and, and support to, to be able to do that costs like $36,000 for that one joint. Right? And, and you enter into these things, you don't know if you're gonna get that indication for that joint. So it's a big expense, you know, for a small company like ours. Got it.

So it's capital.

It's all capital.

Yeah. Eminel's got his hand up.

I was actually just going to ask a very similar question, Tiger, that, you know, capital has been mentioned several times, but capital is just a tool, right? So, you know, what is it that the capital enables? Is it the fact that, you know, there's parts of the country that are just going unserved because you can't have a sales team in there? Or is it like you say, indications? It'd be interesting to hear what the, you know, 3 to 5 biggest things that the capital would enable are, and if that's kind of consistent and coherent across, because if you can then get a shared solution for those 3 to 5 areas, then it becomes interesting. But if it's 30 different problems across 10 different companies, then it's, you know, it's more difficult to find a shared solution.

I'll speak for us, it's sales, 100%. That's where if we were able to raise the capital, 95% of that would go to sales and marketing.

Got it. And, and what's the payback on that, Tom? I mean, 6 months, 9 months, 12 months to before the rep— the, the sales and marketing money pays for itself?

Because we already have a lot of docs that are out there already in, in contracts, um, you're looking at a return on capital probably in one year on per rep. It might be a little longer for some reps and you might, you know, you might be cash positive that first year for, for, you know, the stronger reps. Got it.

All right. Who else wants to— so, so we talked about the young patient that doesn't see, doesn't see all the technologies because they're not on the market or because the surgeon's not familiar with them. One of the things we talked about was when you go, if you have early OA and you go see your surgeon, they may not be familiar with all the technologies that are available on the market. They're, you know, it's, they have a hammer, everything's a nail. You know, if they're a total knee guy, they wanna do total knees all day long. This is assembly line. So, Or do patients see everything that they need to see or not? I don't know.

Tiger, may I ask a question?

Yeah, please, Raymond.

The premise going into this, and I don't want to rain on your parade, But let me ask this kind of basic question. You, and it's been said 2 or 3 times that they're too young to get a hip replacement or too young to get a knee replacement. Let's just limit the discussion to just those 2. And the assumption is that a hip and a knee only lasts 25 years.

Or, or less.

Let me explain why you're making that assumption. If the average age that people get a hip or a knee is 60, 65, then the average lifespan of people is from that period of time, 15 to 30 years. And so there isn't as much data on pa— as that I'm aware of on patients that get joint replacements in their 20s. Now, the reason there isn't is because the incidence is so small. But is it possible that your premise that an early intervention implant design is even needed is not even supported in good science because there isn't data? Now, the unicompartmental knee was intended to be an early intervention design. And there is more data on that with younger patients. And its data isn't all that great, but it could be, just be the reason is because it's not a great bone, you know, implant-to-bone fixation. And so it's very specific to that particular, In other words, those last 10 to 15 years in general, but some do last for 30, 40 years. And so it's a really hard starting point because even the premise, you don't— I don't think are working with using good information or necessarily good scientific information. On the other hand, I do agree there are other kinds of treatments that people probably aren't getting funding for because of financial reasons. And, but that's typical and nobody's mentioned the reimbursement topic either. And you always wanna start with, is there a reimbursement code? So I do see that there's a problem, but I don't know if I would lump all joint replacements that are going into older patients couldn't necessarily work just as well in patients that are younger. That's my only point.

No, good. Now Patrick's, I'm gonna ask Patrick to pull up a chart that he showed me yesterday. It's fascinating because it's the percentage of revisions based on the age at which you got your implant. So let's see if we can make this bigger. Can everybody see that? Yeah.

This is from, everybody can see this, right?

Yeah.

Yes.

OK.

So this is from— and this is knees. I haven't looked or seen one for hips, but I have to assume if they keep this data on knees, they keep it for hips as well. This is from the UK Joint Replacement Registry. They've got 1.4 million patients under study right now. And they bracket or they follow people. One of the ways that they follow people is by categorizing them by the age at which they receive their primary total knee. Replacement. So those are all reflected in these different colors, and you can pick any interval you want, including, or most importantly, the age intervals where everybody should be doing good, right? Everybody should be doing fine at 3 years, everybody should be doing fine at 5 years, so on and so on. But if you just pick— this is men on the left and women on the right— if you just pick 5 years, for example, and then look straight up, this is cumulative revisions on the side. And there's a number of reasons for this, I would be the first to admit that, like, it's multifactorial for sure why someone gets a a revision, but 55-year-olds are doing worse at 5 years than 60-year-olds who are doing worse than 65-year-olds who are doing worse than 70-year-olds who are doing worse than 75-year-olds and so on and so on and so on. So the younger someone is who gets, it's obvious that the younger you are when you receive a primary joint replacement, the more likely you are to receive a revision at any time in your life. That's obvious because you just have so many more years left. But what's not sort of maybe obvious but does show up in the UK Joint Replacement Registry is that you have a higher likelihood of getting revised in the time that you shouldn't be getting revised just because of the age at which you receive your primary total knee in this case. So this is not, you know, the black lines down here. These are people who are 80-plus when they receive their primary. You know, they're sort of dying out of follow-up. But the young patients, every 5-year age bracket that they follow, the younger you are when you receive your primary total knee, the worse off that you, you know, the more likelihood you are to be revised basically from the day you sort of wheel yourself out of surgery.

Okay, thank you. That's very helpful. I assume somewhere in there they talk about the statistics because obviously there's gonna be fewer, but if it's a 1.2 million or whatever sample, you know, group, in the registry. I would hope that the statistics would support that, but it does seem, uh, that's an excellent graph.

Thanks. Yeah, it's kind of, it kind of shows the issue. Go ahead, Blake.

Yeah, hi everybody. Um, Tiger, are regenerative companies involved in this, um, idea that you're having? Because, you know, my experience when I ran sales for Lipogems, you know, and then COVID hit.

That's a hell of a product.

And it can delay, and we, we've seen it delay, if not permanently delay knee replacement. And they're actually doing a study right now to, you know, to treat knee OA. And I think if that, if that gets done, they're gonna get CPT codes and it'll get, you know, they'll get reimbursed. Right now it's all cash, but it's a product that really works in an adipose-derived treatment and, and the fat does create kind of a cushioning in the, in the knee joint. And we, you know, they've seen some really good success with that. So I was just wondering how much biologics come into play because, you know, I think they have a, they have a role here.

Yeah. Yeah. No, I agree. I mean, cell therapy is inside, it's in the tent of target companies, but we, you know, we, this is just a thought exercise. We haven't, obviously there's no business yet. We haven't picked any companies out. But it's interesting. I think we would need a collection of different types of technologies at different ages. You know, that's— I love cell stuff if it works. But go ahead, Brad and Emanuelle are up. I don't want to talk.

Yeah, Patrick, I love those, that slide that you showed from the UK registry, and those data absolutely exist for hip too, and it's consistent across the board. The younger that you have joint replacements, the more trouble you're gonna have later in life. I mean, that's just, that's shown over and over again. And, and the, I think the long-term revision rate, the last time I looked at, at the data, is 30% for patients under 55 for joint replacements. That's including knee and hip. And I, and I just don't think we should be satisfied with that. I mean, 30% failure rate is just not a good number that we should be satisfied with. And that's one part of the equation. But I think the other part is when you talk to these younger patients that have a total knee replacement or have a total hip replacement, they are not satisfied with that procedure. There, there's so many activity limitations on them. They can't do high-impact activities. They, they can't do that. They don't have the movement they have. And every, every impact and every activity that is, that's more than they should be doing, that compromises the life of that implant. So they're always in this, in this state of limbo. Do I do that high-impact activity because I want to, because that's life, or do I forego that activity to buy more longevity from my implant? You know, and as a, as a, if you're, if you're 38 or 40, that, that kind of sucks as a proposition of how to live your life. But that, that's the reality of those patients right now. And And they go see the doc and they literally get PT for many years and ibuprofen without any real solutions offered to them. And, and, and I know this because we hear from those patients day in and day out looking for alternative solutions.

Interesting. Immanol.

Yeah, well, got a, a comment on that first and, and then a question. You know, see, obviously follow the UK data pretty closely being from the UK. And it is fascinating when you see that. I think patients are, maybe overstating it slightly, but kind of mis-sold. You know, we'll replace your knee and you can return back to whatever you were doing before. Only you kind of can't because, you know, we do know from the research that we've done that if you increase the level of activity, there's a higher increase of your metal ion release and all the associated problems that we're kind of investigating. We're now seeing in our data very, very direct relationships between metal ion levels and joint performance levels. And it's, you know, clear outcome scores now. So that's one thing. I think there's a misselling of what the joint replacement will do for you at a younger age where maybe a conservative approach to push things out a bit longer. And I've got a buddy who's a very, very good runner and he has, I, you know, he's trying, he's trying his best to avoid going under the knife with all kinds of injections. And he's, he's about 5 years in now and he's still fighting the good fight until he eventually has to kind of succumb. Um, so that, so that was just one comment. But the, I guess my second one is a question, is, is it about the scientific discussion of what therapies are appropriate for this idea, or is it about, or is it about what is the business model that would support a group of companies, you know, coming together, like, in terms of kind of shared resourcing? And sorry, I, you might have already answered that. I got kicked out of the, the, the call about 5 minutes. My internet dropped.

Okay. Uh, so I think we're, we're talking business model, right?

Yeah.

We, I mean, in the article I wrote as a straw man, we, there's about 25 companies that are, and Lipogen should be added to the list. Um, Yeah, so I think it's— the question is, is the need out there? And could serious money get behind this private equity group? Or maybe we do a CPAC where we raise— basically do an IPO before there's a company and then try to roll up. The other idea would be— I mean, we're getting into the weeds here, but the other idea was we take one of the publicly owned companies like Anika or BioVentus and have them, you know, issue, you know, dilute themselves and issue a bunch of shares and they would be the anchor to try to roll up 3 or 4 companies.

I mean, is there an alternate approach that says you go, you do it, you try and do a similar thing but through a different model. So is there a Oh, you're freezing.

Emmanuel's freezing. Oh no.

While he's coming back, I think the business case and the clinical case, they kind of work hand in hand. And a large or a big reason for that, this is US-centric of course, but the way that US surgeons have chosen to organize themselves, meaning sort of like what are the different fellowships available and what sort of subspecialties exist. That's a big reason for, I think, like why we as an industry have gotten here so far. I'll speak because I can speak the best about the knee at least. Most of these types of therapies that are in discussion or in this discussion, they mostly fall within the sports surgeons like sort of you know, ream it. The sports surgeons have these very complicated or complex and maybe correct algorithms. If you go to like sports meetings and they'll start talking about like how to deal with the aging knee, they will bring up like an enormous like org chart basically or flowchart of like different age categories, different, you know, different cartilage damage, you know, all sorts of different profiles. And they love the fact that they have or what they think they have are like, you can hear this like in the toolbox, lots of things in the, in the toolbox. They seem to want lots of different options. The joint replacement surgeons think of themselves as like, I exist as the, the point of me is the last stop on the station. Like, everyone's on this train, and when it gets to this point, they hit me, and I'm the last person, and people should see me for one surgery, and that's, and that's it. But when you go to the, the sports surgeon, my experience at least is like, they like having, oh, are you 38 and have blonde hair? Well, we would treat you differently than if you're 39 and have brown hair. You know, these types of, of all of these sort of like micro categorizations. And that's really problematic for company, for industry. That's problematic. It might be correct clinically, but it's problematic for industry, especially for people that are dealing with Class 3 products because the surgeons want to, you know, that's before you even start writing your protocols and stuff and have all these inclusion and exclusion criteria. The surgeons like want to put you in this like super tight little box where you're only appropriate for this and That's where I think it makes more sense if you have other companies that are sort of bundled together where the surgeon, you know, they can think about a company and then they can sort of go down Avenue A, B, C, D, or E with a number of different things because otherwise it's just very messy and sort of the CROs make out and nobody else does in the whole scheme of things.

Well, yeah, Patrick and I talked yesterday about the US surgeons go down the total joint route or the sports medicine route. And then that's all, that's all they see. Every time you see a patient, it's a candidate for whatever they do. Whereas the European surgeons are knee surgeons, they do everything in the world in knees.

Or these middle-of-the-road patients, there's no, there's no set like way that they flow through the referral network. It's different on the north side of some city than it is on the south side of some city, where these sort of like in-between patients, like where they you know, whose care they end up in. And obviously, the sort of end treatment can be very, very different.

Yeah, there's an interesting— there's— so it feels like there's a need for this. And from the patients, patients need it. They don't necessarily know they need it a lot of times. And surgeons need it. They don't know what's available out there. You know, they're, they're hawking 2 or 3 products. In general. Um, and, and there's a need from a business— I wish Colleen had joined us today, but there's a need for a business financing model. It seems like all these little companies in the regenerative, uh, preservation space need more capital. And so that's the idea. Why can't we raise a bunch of money, roll up, and create a consortium of treatment options that, um, that could— we could throw more sales and marketing money at it. We could, we could, um, you know, we could finance some of these companies through their clinical trials better. Um, I mean, it just makes sense to me. You could either do a public offering on the front end, you could take one of the public companies and, and leverage their stock to buy other things. Um, the third idea that I, I was talking to Patrick about yesterday, let me try to wrap your head around this. What if we created— what if JointSave was a company that all it was was a marketing company? It was a marketing to patients company. No implants, no FDA, nothing. All we did was just pound. We had websites and Instagram and Facebook and We just pound the message out every day. Are you a candidate for hip or knee or spine fusion? You know, maybe there's a better offer. If you, are you below this age? Do you know about all the opportunities? And create a kind of a concierge service where we will coach the patient. Hey, you know, you're the doctor you're seeing just wants to do total knees, but there's a guy down the street. That's got, you know, subchondral solutions, you know, implants. Uh, maybe you ought to talk to him. And anyway, it would be a fee. It would be a marketing to service to patients, and they would pay out of pocket, and we would help patients in their little journey figuring out what surgeon to go to. Anyway, that's the third model that I can think of. Um, And I think people would pay. I mean, oh, I just ran into this startup called Kenomatic, and they offer a concierge service. Basically, patients pay out of pocket to get more implant solutions from their surgeon. And it's a fascinating model, and they're growing like crazy. There's just a lot of wealthy people that, I don't wanna go the normal run-of-the-mill hip or knee. I want, I want more options. I want my surgeon to have more options. I want my surgeon to do more planning. But anyway, I'm going to shut up now. But seems like that's the third model. One is raise money, um, on the front end. Uh, another one is just convince a private equity group to, to pull this together. Another one is use an Anika or BioVentus to leverage their stock. And the fourth one is let's just turn it into a marketing company, a marketing concierge service that patients pay out of pocket to see treatments they normally wouldn't see.

Yeah, I think also too, Tiger, you know, you look at the, you know, the economic view of this, the Zimmer Biomet and the Strykers of the world have lobbyists making sure that, you know, total joints are sold. They're gonna, they're do everything they can to squash anybody who's in joint preservation. That's why you don't see them doing anything in joint preservation. They don't, you know, it's like Philip Morris trying to tell everyone to stop smoking. It's not going to happen, right? So I think that's a big gorilla you're going to fight with this.

Yeah.

So that being said, I think maybe in my opinion, it's better off more patient awareness, patient education. Like, look, there's a lot of options out there that you don't know about because A lot of these companies don't have, you know, the bandwidth to get to the whole, to get to patients. And the big ortho companies don't want you to know about them.

I use the term joint replacement industrial complex.

So that's just a thought. I think that, you know, if it got big enough, it's a big enough burr in the saddle for these companies. They don't want this.

No, they don't want it. That's why you need— if you're going to do it, you need scale. You need capital and scale.

I don't think the marketing side of things, speaking for our company, is the challenge. I don't think digital marketing is particularly complex. I think you can do it in a very targeted fashion. There are certain channels that are obviously a lot more expensive than others. For us, kind of looking at support in the marketplace, it's headcount driven. It's good salespeople that can get in front of a customer and have a face-to-face conversation and drive that through to a decision which results in usage. That part for me, you know, as a small company with a couple of products, you know, the affordability of a sales team is a huge challenge, whereas, you know, digital marketing is relatively affordable in comparison to, you know, folks, you know, out and about knocking on doors.

Yep. So are you a proponent for direct-to-consumer then and just go around the sales?

Yeah, I think— I don't think it's an either-or.

Okay.

I think it's a both. I think in a multichannel strategy, both. There's a huge benefit of both. But I think direct-to-consumer and helping consumers understand what's out there is massively beneficial because, you know, you. There's very few ways to disrupt, I think, as Patrick called it, the industrial complex. But if you can get people going in and saying, hey, I heard about product X, you know, do you know about it? That is one way to at least, you know, for the patient to have a conversation about it.

Interesting. Cope's got a hand up.

I was just going to echo what Emmanuel was saying. Like, you can push surgeons or doctors into the future. Or you can have patients pull them into it. And I look, I was in pharma. I watched doctors be when that all started and doctors were irritated a little bit about it at the start. And I don't know if you've noticed, it hasn't stopped. I got people dancing on my TV every weekend telling me about some drug they're on, right? I don't know. We were talking about the gorilla. Get a bigger gorilla than I would say, make it a marketing company and go talk to big employers and say, hey, this is one of your biggest things you're going to be paying for your insurance. We can help you manage it and we can be more cost effective and we're not beholden to the industrial complex of joint replacement. I love that term, Patrick. That is a great term. I love it. Yeah, I don't know. You got, I'm a, I'm an old spine guy. I'm just listening to this 'cause I didn't, I, I, I find this stuff fascinating about how the market works in joints.

Yeah.

So, you know, it's more than joints, but, another reason I think an idea like this or, or some version of something like this, it would work is that, at least in the knee, All of these Class 3, or most of these Class 3 devices, you know, they require randomized control. I mean, they die because, or they, you know, they struggle with getting funding. They struggle with getting funding because it's a Class 3 device. Because it's a Class 3 device, it's going to require randomized control trial. FDA will likely mandate a certain trial of a certain size. Those are expensive and time-consuming, you know, multi-year follow-up on top. That's after your last patient is enrolled, then you have to wait a couple of years typically to follow that last patient. All the way through. But FDA is also very like, you know, they tend to mandate that these trials all follow a pretty similar sort of structure and pattern. And FDA thinks that microfracture, basically for anything before total knee, that the standard of care is physical therapy, microfracture, then total knee. And it's like there's nothing in between. We all know that that's not true. But so many doctors do so much microfracture and bill for it still just because, because they're in there doing knee scopes. And they just sort of do it and then bill for it. So FDA sees hundreds of thousands of microfracture surgeries done every year, and then you go to sports medicine meetings and all the guys on the podium talk about how microfracture is a surgery nobody does anymore. And there's a total disconnect between that and what— if I was in charge of this fictitious company, what I would do is I would fund a separate microfracture study, but to FDA standards. There's tons of microfracture sort of like literature out there, but none of it meets the standard that FDA wants these randomized trials. Done that, I would fund a separate microfracture study by itself in just microfracture. Find a couple doctors who are very enthusiastic about just doing just microfracture, and then you can license that out to 5 different companies who all want that same exact data because they're all needing that same, that same data. Then you don't have to run a randomized trial because FDA does accept like literature control groups as long as they're done to the same cohort, same inclusion and exclusion criteria, same patient age, same all of those types of of things. But getting the, getting doctors to agree to participate in randomized trials is a tricky thing, oftentimes because the patients don't want the control group, at least in the knee. The patients are always, they're all happy to sign up for the fancy new technology, but they don't want the control group, especially when the doctors think the control group is the surgery of 25 years ago. They think, well, I'll just do whatever I'm going to do anyways that would be better than than that. But as long as FDA is going to require microfracture as a control group for so many of these studies, it would benefit— it's probably a worthwhile project on its own for somebody to just fund a microfracture study and just lease it out to whomever wants. You can, you can base your pivotal off of the same criteria, which FDA largely sort of pulls something off the shelf anyways and just hands to companies.

That's a really good point. The most, yeah, every cartilage study has a microfracture comparison and it's usually historical and it never matches. It's apples and oranges and it never matches what you're doing. Um, I mean, Brad, did you have any, do they, do they do microfracture in the hip? I mean, it's hard to get to.

Um, they, they do on occasion. They do more osteochondral allografting in the hip than they do Then they do microfracture. Microfracture has a terrible track record in the hip when it's been tried for larger-scale lesions. So osteochondral grafting has about a 20% failure rate in, in the hip. So that's not great either. So, um, they, they do a lot of work outside the joint as a result with the acetabuloplasties and the femoroplasties and the labral reconstructions. But when it comes to the cartilage damage in the joint, you know, I think I mentioned this last week, it's kind of benign neglect. It's like, I, I don't have anything for it, so I'm gonna, I'm gonna just hope for the best.

An allograft is a horrible, um, if you're a study sponsor, that's a horrible control group. Like, you have to fund that, it's expensive, the timing is unpredictable.

Yeah, I mean, you could wait 6 months and spend, you know, tens of thousands of dollars for this graft that, that the surgeon has to spend an hour on the back table carving it to get it to the right shape. And even then if you don't get that shape right, there's been studies that show mismatch in that shape cause problems too. So it's, you know, it's a bad situation.

Yeah.

Raymond? Well, first, I commend you, Tiger, for the thought exercise. And it's a good example of how you like to think out of the box because this is definitely paradigm shifting. So great. Um, and the— I guess what's resonating in my mind is there's the industrial complex that's an opposition to this, that you guys have used that term. Oftentimes when you start a company, you want to align with surgeons. And so I wonder if you've given any thought, or what do you think would happen if you present this idea to the board or the president of the AAOS and the board and/or president of NAS and present it in a really, really high level as opposed to nitty-gritty in terms of detail or technology, but just philosophically do those— and maybe there are other organizations— do those organizations, um, have an appetite? Because they will either make or break you, as will the FDA, as will insurance or reimbursements and so forth. But if you had key opinion leading, uh, organizations— at first I was going to say a very prominent, highly respected hospital system, and the one that frequently comes to mind is HSS, and they may actually be very interested, from you, to create such a visionary plan. So that's my input. And again, good job. I don't, I commend you if you really are going to bring this over the finish line, that would be a lot of work. But it's a great thought exercise.

You know, another, another quick thought I had, Tiger, a few years ago, a bunch of sports guys kind of got together and created, kind of a society about, on regenerative medicine because there was so much out there. There's so much misinformation out there. No one really knows platelet-rich, platelet-poor. The doctors don't really know the difference. And, you and then you've got, you know, quote unquote stem cell and you've got adipose and you got PRP and, and, you know, all these other crazy placental products that are coming through. And so these guys all formed kind of a consortium of surgeons and, they meet every year, I think at one of the sports meetings, but it would be, maybe you do something like that where you get, you get a bunch of, of probably sports guys cuz the joint guys are gonna put put a joint in you. But the sports guys are trained more to preserve the joint and to get, you know, you follow some kind of algorithm however they were trained, right? So maybe you get, you get some of those guys together and, and, and they have, they're the voice. They're the voice of, of reason for joint preservation, however that looks.

But just a thought.

Well, actually, I was going to mention is, um, hi, it's Eric. Hey, Blake. Um, Yeah, that's the Biologics Association. It's the end of the ANA meeting, either the end or the beginning of the ANA meeting. So they all get together and, like, Brian Cole is one of the founders of it. There's a few guys that are in that, and that's exactly what they're talking about is trying to— it's kind of the wild, wild west on regenerative medicine out there, and they're trying to put together some standards, and they've got backing from many of the other associations other than, uh, the academy.

So ICRS has tried this a little bit too. If you look at their— like, go to their website, they changed their name officially, at least, or on their website it's like International Society of, um, or International Cartilage Restoration Society and Joint Preservation or something like that. They threw it on the end. But if you go to an ICRS meeting— I, I'm not going this year, I was there at the last one— it's basically the, here's our results of osteochondral allograft. Meeting. Like, it's the same 10 guys that give versions of the same paper like over and over and over and over again. And, and then the panels are like, you know, how do you revise these? Or, you know, what's your algorithm look like on this specific type of patient? It's like, it really gets like super, super repetitive.

Yeah. Or, or what happened with PRP with this patient population?

Yeah, it's— it— so I think they see the need, right? To Blake's point, I think they recognize, like, or enough of the surgeons recognize that there's a a space and there's, there's room for a society to take some ownership, leadership, whatever. Just needs to be pushed on, you know, pushed on and kind of evolve. The next couple chapters need to be written.

Yeah, but, but some of this is recognized, I think, by some of the big ortho, right? Is like a friend of mine up in Albany area, he's in charge of the sports for Zimmer. And Gel One's a big seller for them. So I, I don't think they completely ignore it. I, I still, you, you are correct. That's the, you know, it's cordoned off for just the sports folks. And, you know, I hear from, you know, sports friends and they're like, yeah, if they happen to see my, you know, partner that does nothing but knee, they're getting a knee. If they see me, perhaps I might be able to do this XYZ, but it's, it's somewhat within, maybe down to the practice level on how the patients are referred throughout that, that practice and their system and, and the referral people that titrate and bring them down to what surgeon or physician, you know.

I think that they do agree. I would agree with that point. I think they do recognize, like, I don't think it's like some, someone at corporate development at Zimmer was like on this call. I don't think he'd be like, no, you're wrong. There's no space for for these types of things. I don't think that they would say that. They have tuned their business, at least this is my opinion, like they have tuned their businesses though that like they're going to let everyone else sort of overspend to get like a commercial ramp going and then they'll overpay like, you know, at $20 million or whatever of revenue. And for these companies, when you have to run a $50 million— for enough of these companies, when you have to run a $50 million trial, to then raise more money to then get to $20 million in sales. Like enough of them just like sort of don't make it along the, you know, along the way. That's how I view it.

Yeah, Patrick, that's absolutely right. I mean, they recognize the value and they recognize the underserved patient population. They just play the waiting game. They want to wait you out to see if you can get something to market. And then when you get there, they have deep enough pockets for $250 million, $350 million acquisition. But my contention is there's not that many companies that'll make it that far.

Correct.

There's so many that die along the way that are good technologies.

Yeah. If they really, you know, I don't want to be careful here because I know that they're trying to do the best they can, but if they could put some funds early on to help some companies, then there's a lot more companies that could get there. But they show no appetite for doing that at all. So that brings us full circle back to this idea of how do you get get these companies to market and how do you fund them?

That is really surprising coming from pharma. I was a senior leader at Pfizer for a good while and we would look around and we would place bets on small companies. We take a small stake with right of first refusal and if the data kept, they looked good, we'd make a bigger stake and a bigger stake and eventually the company would be bought. And, you know, Pfizer by the time I left was, you know, essentially a bank that just bought smaller companies and then marketed it. Doesn't really do innovation itself anymore. And it surprises me that I'm not, you know, I'm still relatively new on the orthopedic side of things. It surprises me that no one is doing that kind of same model of kind of multiple small bets across multiple smaller companies, you know, within the kind of the right of first refusal to buy in the innovation. Doesn't seem to be working that way here yet.

Yeah, I'd love to see them adopt that kind of model. And, and I, but I think, I think it's on us in some ways, the, the guys who are doing the innovation. We, there, there needs to be more successes in, in this area. And if you get some exits and noise in the joint preservation space and the joint restoration space, then I think it'll help all of us to, to get more funding and get their attention. But it's almost like we have to prove it first.

Yep.

Raymond, um, just real quick, um, so I attended the LSI MedTech meeting, and I'm not at all an expert at, uh, fundraising or and all that, but what I did gather is there is a group of investors that are looking for stuff like this. I mean, this is a visionary, you know, change the world kind of stuff. Generally the family offices, it seems, because what they want to— what is important to them is they are trying to change the world, to make the world a better place. At least that's what they say, as opposed to the, uh, private equity and so forth. So you might go down that path, and perhaps the super I, I don't know, Bill Gates, he's trying to give away his money. This might resonate with him. Um, and if you were to pitch it— now on the flip side, now I'm going to put myself in the shoes of a startup company, and that's not the situation in my case that has an early intervention implant. That's not my situation. But if I were to be in that situation, the first question that I would ask is, well, how do you value my contribution as and my technology fairly against this roll-up? And how will I get a fair return? Or am I carrying a bunch of dead weight with some of the other technologies that aren't as good? So that's the two points. There might be money in family offices. And number two, there might— the issue of getting a bunch of disparate people to get along and agree, that's a hard task.

Well, you'd have to have a leader that would, like a PE group, that could just take charge and fire people and change, you know, equity plans. And you'd have to just really take charge. And the companies that are doing well would have leverage. The companies that are not doing well and suffering would have less voice, less leverage. I don't know what it looks like, but It wouldn't be pretty.

I mean, it's not.

I think there's a clear question for companies that want to do it, which is compared to what? Yeah, you might only get 25% of time in the bag, or you might get 4th position slot. But if it's 4th position slot in a team of 50 reps across the country, plus marketing time, plus how does that compare to what you got currently? Yeah, chances are it's a little load better than what you currently have. So I think it'll require sensible leaders who'll be happy to make a trade-off with it's better than the status quo, right?

Yeah. Yeah, this, this, this journey started way back in 2010 with me. I, I joined Active Implants and we had a meniscus replacement, uh, to basically delay total knees. You know, it just slid in the medial compartment and spread out all the stresses again. And the patients, the arthritis pain went away right after surgery. And, and it never got approved in the US, but it got approved in Europe. And we were courting Zimmer big time to invest in us. And we found out, uh, after the fact, they did not wanna invest in active implants because they thought it was a threat to their biologics business. Period. I mean, they were working on cartilage therapies and we had a, you know, meniscus replacement that didn't, you know, basically bumped into their cartilage replacement. So I, I really think there's gonna be a lot of pushback from the big, big joint people, maybe some of the big sports medicine companies. I mean, there's, there's a need. There's a need for patients. There's a need for the little companies. There's a need for surgeons that don't have access to everything. I mean, I just think there's a, there's so much pull for this idea. It's just a matter of mechanics. Who can make this? Who can tell the story, raise the money, you know, kind of lead, lead this whole thing.

Uh, the structure of the sports marketplace probably plays a role into this as well. Um, Arthrex is so dominant in sports that I don't know exact market shares and what products you put in there would matter in terms of how you figured it out. But like, there's such a gap in my mind, at least from what I see, and like between Arthrex and everybody else that they can kind of do what they want and really set the tone in a way that's harder in joint replacements. Because at least you have 3 or 4 companies that if somebody makes a move, the others will start looking to copy, or, you know, be aware of it. It's the way that the sports market has evolved over time. I'm just sort of thinking out loud. That probably makes a— plays a role in this too.

Patrick, can I ask you a question on this? I really value your opinion on it. Most marketplaces have like a dominant one too. If there's one big player, do you think that makes it maybe even a more acceptable idea to people who don't like the fact that there's only like one kind of single choice? Or do you think that surgeons are kind of so comfortable with that, that they don't want it upsetting?

I mean, there's definitely a lot of sports surgeons out there. I mean, every young sports surgeon comes out of fellowship and thinks like, I'm gonna be the next big deal for Arthrex. Like, they, like, 100% of them seem to. I hope this recording doesn't make it much further than this group, but they all sort of seem to, you know, until they get to be 45 and realize like, that's very, you know, the odds of that happening are pretty small. I just see, you know, especially in joint replacement where everything is 510 heavy and you can sort of iterate on everything and copy on everything, there is a copycat sentiment where as soon as somebody does something, everyone else will immediately— they're all watching each other, of course, really closely. And if somebody sort of gets bought, it causes the other ones to, oh, wait, should we be doing that? Should we be looking into that? What are the other companies out there that we should be watching? Whereas in sports, if Arthrex does something, other people look and take notice. But if they don't do something and somebody else much smaller does something, Arthrex may not even care because they just, for whatever reason, priorities, whatever. They just sort of don't, don't, um, they don't— nobody's big, you know, no one's sing— you know, singularly big enough to sort of really, really threaten them. And I think that plays a role in this, that, that, um, there's just— there's not a lot of entities that can write like really, really big acquisition checks in the sports marketplace. I mean, the other— Stryker has a sports division, J&J has a sports division. They tend not to put those types of acquisition prices towards, towards things in, in those business units though.

Got it.

Thank you. Interesting.

You know, Arthrex has joints now, which I'm not sure how that's going.

I hear not well, but yeah, I don't even know if they sell the hip and knee anymore, or the total hip and knee. Um, um, I kind of thought— I mean, they have a shoulder replacement for sure, which makes sense because they're sport, you know, because sports surgeons do those.

No, they've had that forever. They've had a unique time. But, you know, and I think another factor is a lot of the, a lot of the little guys, they'll just, Arthrex will just copy what they have. They'll reverse engineer it and say, sue me. They, they don't care, you know. You know, it's not, they're not buying companies like Pfizer's doing. They're just copying them and saying, sue me. We'll see in court. We're, we got a lot deeper pockets than you do. And most of these companies can't afford, they just can't afford to sue them. So I think that's a little bit of a barrier to entry too. And it's hard to get recognition and get scale and get scope when you're battling, you know, battling that— Arthrex, Smith Nephew, you know, those are really the two big ones in my opinion.

Hmm.

So, Tiger, I'm guessing no, nobody from a private equity firm reached out to you today and said, well, not yet.

They're waiting for this recording, Brad. They're lined up. They're ready to go at 3:01 or 4:01.

I mean, if somebody You know, what this needs is somebody to lead this, to lead JointSave, basically write up a business model and start pitching it.

And I think the step before that, Tiger, I think it'd be really interesting to find a couple of friendly PEs and talk them through the concept and just get some feedback.

Yeah, or some PEs that are more amenable to earlier stage companies. Late stage, it's, you know, they wouldn't even consider it.

Yeah. This might be more VC than PE. Yeah.

VCs are sitting on their wallets right now. They're not, they're not doing this. The shining point of all this is the, the, it looks like the IPO market's going to open up later this year, early next year. And if, if this joint safe thing was a consortium that got rolled up, there's probably a really good chance you could spin it out publicly in 2 or 3 years and just make a ton of money. But, um, because I think that exit's going to be available in 2 or 3 years. But right now, um, it, you know, you'd be bleeding money for 3 years, uh, which PEs don't like to do. PEs, they use the cash flow every month to pay for the loan on what they just bought, you know.

So they—

I think it's too early for PE.

Yeah, yeah, too early for PEs. Maybe ventures sitting on their wallets. I mean, you know, these S-PACs are coming back, you know, now. Maybe, I don't know if anybody's done S-PAC in medical devices, but maybe somebody could pull that off. Or a giant family wealth office. And the low-cost way to do this is What option number 4 that I said where you just turn into a marketing service company and, you know, you say, you know, you know, you pay us $1,000 and we'll help you with your algorithm on your, your knee or your hip or whatever. And, you know, we'll, we're not offering medical advice. You're gonna have to figure all that out. But, you know, hey, if you want us, Cytecs Ortho, you want to be in the Cytecs Ortho clinical trial, you, just go to this city, you know, you're a candidate. I mean, we, I think patients would really benefit from it. We could, we would just help them with their algorithm basically. I like, I like the way Patrick said that.

Yeah.

And I can't say too, Tiger, to that point, I mean, there is a, a lot of misunderstanding out there from a patient perspective when their joints start going bad. I mean, they, they don't get good advice. They don't get full information, and they're led to believe that a total joint replacement is the answer, and you just have to wait until you're old enough to get it. And, and, and that's just, you know, I don't like it, but they, they just don't— they're not, they're not fully disclosed to when they go see the doc on these things. And why that is, I don't know. But, but it's the information I get back from the patients when they tell me what they've been told. It's just like you, you were given about 20% of the information you needed to make a decision.

Wow. Yeah. I mean, uh, you know, it's the hammer and the nail thing. You know, if you, if you do, if you're doing 6 total knees a day, everything looks like a total knee to you. Everything that walks in the office.

Yep. And that makes sense.

Yeah. Well, this has been, this has been great. We'll have to do another version. Maybe we'll get some finance people on. Um, You know, nobody wants to raise their hand and take this on yet, but we'll, we'll keep chewing on it, uh, the thought exercise. Uh, maybe the next step, uh, is to— what do you guys think the next steps are? Find a finance person, or—

you know what would be interesting, Tiger, is, um, Al Nani was on last week, and, uh, Al's tight with the, uh, the Parviz group. Right? And so they've, you know, formed their own, you know, you know, fund. Yep. And we might be able to get a, you know, a couple surgeons, but also that are part of a, one of the funds. So that might be interested in, you know, so Al might be able to set that up. Okay.

It's a good one.

Yeah.

Tiger, how about getting some sports med surgeons and get their feedback?

Yes. You know, I mean, I'm open to anything. I, I, I think if you, I'm sort of down on surgeons these days. I mean, if you ask a surgeon, would you like to have, you know, some extra options to treat patients? They're just gonna say yes all day long. You know, I've never heard, yeah, I, I'll take a look at that. Yeah. When it's commercially available, show it to me. Yeah. I may be interested in that.

Is it approved in my system?

There you go. There you go. Now, Yeah. And then you gotta go through the VACs. But, um, but I, surgeons want everything. I've never had a surgeon say, I want less options. And so I think, I get, I think we get lied to by surgeons all the time cuz they just, they want everything. They want everything available. They want every, you know, that whole revision system in the hallway just in case they need it. You know, they want everything. So I think the way to do this is patient demand and find the right finance people to, that can embrace the vision and write a big check. And then a leader that can pull it all together. But I don't know, it's early.

Yeah, I think the surgeon, surgeons would be more motivated by hearing here's the things you haven't had access to over the years because they've died on the vine because of, you know, lack of funding or, or whatever. The pro— you know, that sort of— that, that hits home for them rather than like, like if it's like, would you like this? Yes, because Tiger's right, they'll say yes to everything. Um, um, but if you—

yeah, they don't know what they haven't had access to, probably. Uh, I remember in the early days I used to go to academy and all the international surgeons would come to the booth at Academy and go, well, we can't get that in our company, we can't get that in our country, we can't— and they would see all the things they couldn't get. It would just frustrate them. Um, interesting. All right, well, thanks guys. This— we're going over the hour. This has been very interesting. Thanks for showing up. And, uh, we'll do— I'm sure we'll do a part-time part 2 of this in the future. Uh, have a good, have a good Thursday, Friday. See you next time.

Thanks, Tiger.