The new Amedica: Reorganized as a start-up with focus and ambition

Written by Laura Dyrda | January 22, 2015 | Print  |

Sonny BalAmedica is best known for its development of composite silicon nitride products for biomaterial applications. The company has evolved significantly over the past decade to gaining revenues in spinal disc implants, both in the U.S., and overseas. Now, the company has undergone a restructuring as a nimble startup company, with an estimated $6-$8 million of annualized operating cost savings beginning in 2015.

"Our technology is ideally suited to an OEM strategy, and growth in that space," says Amedica CEO B. Sonny Bal, MD, JD, MBA. "The OEM focus is consistent with our mission to be the premium silicon nitride biomaterials company that best understands the needs of its customers and partners. The OEM strategy allows us to achieve rapid cash flow, better margins, and is a tremendous opportunity that is fueling excitement since we are so well positioned to excel in this space. That said, we will not ignore our existing metal and spine implants, and will continue to invest in both. Anything we touch will have our excellence written on it."

 

The company is continuing to invest in sales, product development, and its stellar sales team to ensure that surgeon needs are always met. "Given our core competency, it is not expensive for us to come up with differentiated, exciting products, and one-off prototypes," says Dr. Bal. "We are uniquely positioned for quick internal development, given our small size, and fewer layers to turn innovative ideas and concepts into real products. While the regulatory burdens apply to us, just as they do to larger companies, our size is definitely an advantage when it comes to innovation and product development.”

 

Being a surgeon, Dr. Bal understands the importance of clinical data, outcomes measures, and cost pressures. Amedica recently announced the results of the CASCADE study, showing cervical spine fusion rates comparable to those obtained with PEEK spacers loaded with bone autograft. Furthermore, when compared to the competing PEEK material, silicon nitride has a cost-advantage, and none of the shortcomings that have led several companies to explore additives and modifications to their PEEK spacers.

 

"Our value proposition is we are the only company that develops, makes, and sells biomedical-grade silicon nitride," says Dr. Bal. "The CASCADE clinical trial results were better than expected, and we are moving forward with other clinical trials, and basic science studies that validate our material. As the CASCADE data showed, we have a disruptive technology that can be deployed in a number of applications."

 

The company recently submitted a traditional 510(k) application with the FDA and expects to achieve clearance for its composite cervical disc that was used in the CASCADE study, in mid-2015.

 

The company recently partnered with Kyocera, a global giant in ceramic manufacturing, to enable scaling up of production volumes and gain cost efficiencies. The company expects to leverage this manufacturing partnership to reduce manufacturing costs by 25 percent or more. Additionally, the management team is focused on sharing scientific data with their sales staff to show clear benefits from their products.

 

"In the paradigm of healthcare today, the whole decision-making power is shifting to some extent from surgeons to hospitals," says Dr. Bal. "Rather than have a new toy, the model is shifting to only purchasing devices that are truly cost-effective and really work. Our product standing alone can achieve cervical fusion, while other products need bone fillers and other additives. We have the advantage, both in terms of reduced costs and less complexity during spinal fusion surgery."

 

To convince surgeons to switch to Amedica devices, the company is leveraging Dr. Bal's background as an orthopedic surgeon by using a few simple strategies over the next several months:

 

• Show surgeons why and how silicon nitride works
• Develop and share additional scientific data
• Demonstrate the practical advantages for the surgeon

 

In addition to growing in the US, Amedica also has its sights set on countries overseas.

 

"There has been huge growth overseas, but the margin is still better in the United States," says Dr. Bal. "The number of reconstructive surgeries in the developing world is going up. Ceramic products as a biomaterial platform are better accepted in Japan and Europe than they are in the United States. We will explore these opportunities, while we focus on the US market."

 

"We are excited about the future and we are looking up and out," says Dr. Bal. "We are looking at all possibilities and I'm very proud of the quality and passion of our employees. The people here come first and product comes second—and we have a killer app. New ideas, connections, and eclectic applications of our unique biomaterial are what is most exciting about what we do."

 

More articles on orthopedic devices:
Integra LifeSciences releases reinforced matrix for tendon injuries
K2M's MESA 2 Deformity Spinal System receives FDA 510(k) clearance
8 core thoughts on the cervical total disc replacement market

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