CEO: Ivan Delevic
Based: Dania Beach, FL
The scoop: OrthoSensor's Verasense intraoperative load sensor is an attempt to improve orthopedic surgery using Big Data. The data provided during the surgery enables orthopedic surgeons to balance knees during total knee replacement by correctly aligning soft tissue. The 63-person company boasts partnerships with three of the four leading knee implant players--Zimmer Biomet ($ZMB), Stryker ($SYK) and Smith & Nephew ($SNN) to offer the disposable implant in conjunction with 6 different knee replacement models. The company previously disclosed that it has raised nearly $19 million in a recent funding round, bringing its total equity haul to around $70 million since 2010. It also has the strategic backing of a large strategic investor.
What makes OrthoSensor Fierce: By bringing quantification to orthopedics as a replacement to orthopedic surgeons' reliance on subjective feel, the OrthoSensor has improved patient satisfaction rates post-surgery from around 80% to 97%, according to a two-year multicenter study of 135 patients, which compared outcomes among patients who did and did not received the Verasense. Patients' pain and patient activity scores also improved.
Traditionally, orthopedic surgeons have focused on bone alignment during surgery, but founder and Chief Medical Officer Dr. Martin Roche realized the importance of soft tissue alignment thanks to his sports medicine background, said current CEO Ivan Delevic in an interview.
|Verasense TKA Software Application--Courtesy of OrthoSensor|
The Verasense is temporarily implanted between the upper and lower portion of the knee joint during knee replacement surgery. It houses an accelerometer, customized chip and other technology, enabling the device to take measurements and communicate with the associated software.
One advantage of the device is that does not change the workflow of traditional total knee replacement. To check for balanced knees, surgeons move the artificial knee through its full range of motion, just as they would do normally. Instead of relying on the subjective feel of tension, those using the Verasense can view the load (measured in pounds) on the inner and outer portion of the knee via a computer monitor. They can then align the implant so that each side of the knee is bearing a similar a load, making it "balanced."
Further proof of the device's utility comes in the form of partnerships with three of the four main producers of artificial knees. The Verasense is an optional add-on with Zimmer Biomet's Vanguard and NextGen artificial knees as well as, Smith & Nephew's Journey II and Legion, and Stryker's Triathlon knee replacement. (Johnson & Johnson's ($JNJ) DePuy does not offer the Verasense. Delevic said he wants to partner with them as well.)
Orthosensor is bringing innovation to a device arena that sorely needs it. Last year, an analysis of outcomes data published in the BMJ found that there is little to no support for new joint replacements in comparison to their predecessors. The perception (if not the reality) is commoditizing traditional joint implants, creating a situation where they compete essentially on price, leading to shrinking margins and mergers like that between Biomet and Zimmer.
When asked about the lack of meaningful innovation, Delevic said that revision rates have come down significantly, but acknowledged that long-term patient satisfaction hasn't quite lived up to the hype promised by next-generation artificial joints.
The good news is that OrthoSensor's disposable implant appears to have solved the puzzle not by adding a new feature to an artificial joint, but by providing an accessory that improves the quality of the implantation surgery.
|OrthoSensor knee balancer--Courtesy of OrthoSensor|
What to look for: Delevic wants to expand the existing market, and create new sensors for other joints. He's also seeking to improve reimbursement for the Verasense. Ultimately, he believes that the data gathered by the device and associated software will turn into the company's most valuable asset. Delevic said OrthoSensor is an early-stage company, and he's not in a rush to give investors an exit by selling the company or taking it public.
The Verasense is offered in about 70 hospitals. It's currently used in only a small percentage of knee replacement procedures in the U.S. "We hope to get to double-digit levels," Delevic said. He's aiming to launch the device in Canada, the EU and Australia by the end of the year.
"We are working on expanding our portfolio within the models that the manufacturers already have," he added, saying he hopes to soon sell the Verasense alongside Zimmer's Persona knee.
He also said the company is developing a third-generation version of the Verasense that will use less electricity and be manufactured at a lower cost. The device is made in Ohio by a contract manufacturer.
A longer-term goal is the development of new sensors for other joints. Delevic wouldn't put a timeline on those efforts, saying the company is exploring the regulatory pathways any new product might face.
The company is initiating a randomized version of the aforementioned trial in order to gain clout with payers. The federal Center for Medicare & Medicaid Services agreed to give the Verasense a CPT III (or tracking) code, given to emerging technologies. It will help with data collection that the agency can guide to dole out Verasense-specific reimbursement. The device is currently reimbursed indirectly via the code for knee replacement procedures, Delevic says, adding he has not yet commenced conversations with private players, but will do so once more outcomes and health economics data is collected.
Next year, the CEO aims to launch a cloud-based application for data collection and analysis, in the hopes of providing hospitals with additional incremental knowledge and information they can use to improve knee replacement procedures thanks to the "digital signature" of knee balancing data provided by the Verasense. It will be made available in conjunction with other demographic data about the patients.
The company aims to make a transition reminiscent of that desired by 2014 Fierce 15 company AliveCor. "We bring quantification to orthopedics, so data is very important," Delevic said. "We want to grow from a medical device company to medical device-based data services company."
-- Varun Saxena (email | Twitter)
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