Greg Parranto, Endeavor Orthopaedics - Patella Plating System | LSI USA '24

Greg Parranto  0:00  
A little background on myself. I spent the first 12 years of my career in the military as an engineer officer, really focused on leading and building teams to accomplish the mission and overcome objectives. And then I left the room I left the military in 2007. I spent the next 16 years with Cynthia and Johnson and Johnson, essentially doing the same thing. building teams leading teams focused on helping our health care professionals or healthcare partners overcome obstacles and challenges in the operating room and improve patient care. We've sent these leadership positions in sales, marketing, product development, contracting, and then I was the National Director of extremity sales. And for the last four years, I was the area vice president for trauma and extremities in the Midwest area. While I was in those last couple of roles, I had the opportunity to be on the acquiring side of some small companies and really came to the realization that this is this is where the innovation happens. This is where the excitement is. And so I decided to go back, get my MBA from Kellogg and make a deliberate search to try and enter the entrepreneurial side and was fortunate enough to land with Endeavor Orthopaedics. At a very exciting time for the company. We just launched our our first product into limited release. And we're focused on building the commercial model, growing sales, and really expanding our portfolio of products. I'm also fortunate to join a great team of of individuals that have an entrepreneurial background, they've started, founded, built and exited multiple health care companies. And I'd like to highlight Dr. Brent Norris, who's a serial entrepreneur, we worked with him at Cynthia on some of our most disruptive products over the last couple of decades. And he's also worked with many smaller companies just as a Kol, and a design surgeon and he's the one who identified the clinical problem that we address with endeavour orthopedics. And so when we look at that clinical problem, it's really managing Peri articular fractures with intricate soft tissue injuries affecting the extensor mechanism. So the easiest way to to point this out is with a picture. So if you look at the patella, up here, the patella is fractured, which most commercial available products, it's pretty straightforward to fix that fracture. But as you can see, in these images, the tendons and the soft tissues don't exist in those products. But that's really the core of fixing these problems. And so you can see that you've got the quadricep tendon attached this bony fragment of the patella tendon here, and when you when you fixate that bone, and then you you mobilize the joint, those forces from the tenant and the muscles are working against those, that fixation that you just created. And it creates a very high complication rate of nonunions a lot of pain. And so a lot of times the surgeons are then keeping you immobilize the patient's immobilized for an extended period of time, which has a whole nother range of complications. You can say the same thing here down and the same thing with the electron, which is attached to the tricep tendon. And so this really is as applicable to any avulsion fracture throughout the body. So our solution, we really just married the rigid fixation the plate and screw construct with the sutures. So we provide a sterile kit with the sutures already attached. There's a slipknot technology which allows you to tether to the tendon and then tension the tendon onto the implant which moves the forces the deforming forces from the bony fragment onto the implant, enabling early mobilization and freeing up the bone to heal underneath. If you look at the overview of our company, like I said, we're really focused on the integration of fracture repair with soft tissue management. We have a pipeline products and applications we started with the patella, which is a $225 million market. Our next product which we plan to launch in July of 2025 is an electron play, which is the elbow which about four times the size of the market. And we have a greater tuberosity implant in the shoulder, greater choke implant in the hip. And there are several other products that we can bring to market right now we've done we've actually done 60 patients, because we did two patients this week. So in our limited release, we've got 60 cases, we have 13 patents, those 13 patents, if you look here really revolve around the the integration of the suture with the plate. And so we have IP around the zip knot technology, which is the one way slip knot which allows you to tension the tendon to the implant, also how to fix this to the plate. And then we have multiple method patents for the different indications that we've we've married this to you look we have we've had 23 different facilities use the product with with great with great feedback. And we've got we've raised $3.21 million, which I'll get more into in the next couple of slides. I get the question a lot of why don't we start with the patella and not with the electrons. It's a much larger market. And really we started with a patella because that's where the clinical need is there's over a 50% reoperation rate on patella fractures and the cost of reoperation on the healthcare system was about $45,000 per operation and then the inpatient setting. So there's a there's a well understood need for a better way to fix the patella fractures. Dr. Norris did a study looking at using off label small frag plates and attaching the sutures. So testing out the the transfer of those forces from the bony fragment onto the play, and he was able to reduce reoperation rate to less than 10%. And we've seen less than a 4% reoperation rate with our implant since we started to implant the device. And we're the only product on the market that marries that soft tissue suture with the plate and screw construct. And we do that by offering a sterile kit. We look this is our other summary of our financial highlights last year, in our limited release, we did 50 cases, and in 2023 with $242,000 worth of revenue, we're projecting $2.1 million in 2024. And then in 2025, really the growth expectations the loss of that lack or non play, which is a much larger market, we expect to get close to $8 million in 2025. And then in 2026, we plan to be progressing towards $20 million. And that's when we're looking at really engaging with strategics for a potential exit. The key things are in 2023, we were 79.9% gross margin, we expect that to get up to about 85 with 85% on volume. Our ASP for this kit is $4,900 per kit. And we're currently raising we're doing it we're doing a raise of $7 million, which again, I'll we'll get to in a second. So the investment opportunity for endeavor, we we originally raised $850,000 In a seed round that was from our founders, friends and family to really initiate the project. Then in our series A once we got FDA approval, we raised another $1.2 million and converted the seed round, which gave us a post money valuation of $8.8 million. And that brought us through to the manufacturing and gave us the limited release quantity that we needed to launch the product. And then we initiated and what we're in right now is our series B raise our series B raised we broke into two portions. The first is a bridge, convertible note round of 2 million, we've already raised 1.1 6 million of that most of those funds are coming from surgeons from our distributor partners. And a lot of the series A investors have reinvested, we're looking really we're here to focus on raising the other $5.8 million so that we can really accelerate that growth in the commercial model and grow sales, we only have about 15% coverage in our distribution model right now. There's only three people on the team. So we need to hire some more folks raise those funds and really start to run as fast as we'd like to with this company. The exit strategy is pretty straightforward. We're looking to grow to about 20 million once we're training in that 20 million is to engage with the strategics and sell our company at or above that 6.8% average that we see in the medical device space for medical device companies. And so with that, I would love to talk to anybody here who has questions and engage with you after this at this meeting. Thanks a lot for listening