[Video Profile] Small Bone Innovations

The baby boomer generation and the aging global population are accelerating the growth of the orthopedic market. The percentage of the global population over the age of 60 will more than double between years 2000 and years 2050. People are working longer and remaining active for their whole lives, demanding the restoration of function and motion, not just the elimination of pain. Companies are growing to meet the demand. Twenty years ago, there were five publicly traded companies in orthopedics; today there are close to 80.

The treatment of small bones and joints encompasses a wide range of medical professionals, including orthopedic surgeons, hand and foot specialists, sports medicine specialists and podiatrists. According to the 2006 AAOS Orthopedic Physician Census, 33% of all U.S. orthopedic fellowships specialized in the small bone and joint anatomies in 1990. By 2000, that figure rose to nearly 45%

Although the small bone and joint market is a significant part of the overall orthopedic industry, it has not attracted as much attention as areas like total joints, spine and sports medicine. To date, many large orthopedic companies have focused on large bone and joint surgery. This emphasis has left the upper and lower extremities market unconsolidated.

Small Bone Innovations (SBi) created by Viscogliosi Bros., merchant bank to acquire established companies in the orthopedic field. The goal was to create a single source of products and technology for surgeons specializing in small bones and joints or limbs. SBi debuted at the AAOS Convention & Exposition in February 2005. At the end of 2006, SBI completed a record $42.6 million series B venture financing to underwrite this consolidation effort.

SBi’s acquisitions and technology licenses include the following: Avanta Orthopaedics’ hand, wrist, and elbow arthroplasty and trauma products; Envision’s implant manufacturing; Actipore’s porous metal technology; Artelon’s biologically active and biodegradable technologies; Xtremi-T’s resorbable trauma technology; and Fixano, S.A.’s line of small bone and joint implants.

The SBi product range is specific to upper and lower extremity small bone applications. Surgical implants covering the shoulder to the hand and the tibia shaft to the forefoot may be found in SBi’s portfolio. Offerings include: arthroplasty products; trauma products; biomaterials; soft tissue and sports medicine products and small bone orthopaedic equipment.

SBi continues to expand its product pipeline, with more than 40 devices and instruments to further augment their acquired offerings. In 2006, SBi received five new FDA 510(k) clearances and completed eight M&A licensing and distribution; 19 new products were introduced. The direct sales staff continues to grow, driving seven straight record sales months in 2006. Currently, SBi has 21 direct sales representatives in the U.S. and four direct reps in France.

A key component of the company’s strategy is a medical education and training program open to all surgeons. To date, nearly 1,800 surgeons have participated in courses and workshops. Such relationships have helped increase revenues by nearly 30% from 2005 to 2006. There are over 22,000 small bone and joint surgeons working in the U.S.

In April, 2007, SBi secured a $20 million debt facility financed by the Drawbridge Special Opportunities Fund, to further strategic opportunities.

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