Devices' Next Generation: An Interview with ArthroCare's Michael Baker
In Vivo continues its series of interviewing device company executives. This time, we pick from a category that might be called "the young Turks": executives from the younger generation who are running the next-generation of major medical device companies, those that will rival if not replace the Medtronics and Guidants of the past generation. Having cut his teeth at device giant Medtronic, Mike Baker has spent the last 10 years running ArthroCare, one of the industry's next-generation leaders.
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Ten years ago, ArthroCare was just one of dozens of small medical device start-ups to have gone public in the IPO boom of 1995 and 1996. But while most of ArthroCare's classmates in what has come to be known as the Class of '96 have disappeared, ArthroCare is a fast-growing, self-sustaining public company. Its core technology-a radio-frequency-based ablation tool called Coblation--results in faster healing times, with a fraction of the pain of other modalities that remove tissue. It has thus been picked up by a number of physican specialities including ENT surgeons and orthopedic surgeons, and for a large number of applications. ArthroCare now faces a host of new challenges, most notably, how to continue to capitalize and build on its proprietary plasma-mediated technology and, in the process, how to sustain that growth and the share price rewards that come with it.
In a rapidly growing market like the sports medicine segment of orthopedics, it pays for companies to strike early. The introduction of new technologies and a population that alternates between sedentary work weeks and extreme sports on the weekends are fueling market growth rates of 30% annually. Thus, ArthroCare Corp. didn't hesitate to snap up five-year-old Opus Medical Inc., developer of a novel suturing and anchor system for arthroscopic soft tissue repair. In sports medicine, AthroCare's largest and most established target market (spine and ear, nose & throat are its other major markets), the Opus technology will help ArthroCare increase market penetration.
ArthroCare's recent purchase of Parallax gives the company a broader platform from which to build a spine business based on its innovative Coblation technology. While ArthroCare currently can play in microdiscectomies, the bread and butter of spine surgeons, its most promising opportunity: the vertebral compression market that Kyphon has had such success with.