Are Device VCs Becoming Spineless?
Executive SummaryIncreasing concerns over the cost and efficacy of spinal procedures have chilled VC interest in spine companies, once the hot growth area in orthopedics. So, if spine is not the answer, where will VCs find investment opportunities in orthopedics, which remains one of the largest device sectors?
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Founded at the height of the spine industry’s surge, Simpirica Spine Inc. has developed a dynamic stabilization device that is reminiscent in its simplicity and novelty of past interspinous spacers. The company will soon embark on a 400-patient pivotal trial in the US testing its LimiFlex against posterolateral fusion in treating degenerative spondylolisthesis. A successful outcome in the trial could help offset some of the setbacks the spine industry has suffered over the past five years.
Privately held DFINE Inc., a supplier of tools for treating vertebral compression fractures in the spine, is trying to reposition itself from being a spine company to an “interventionalist company” that provides tools necessary to interventional radiologists, neuroradiologists, and oncologists.
The company’s StabiliT Radiofrequency Targeted Vertebral Augmentation (RF-TVA) delivers a highly viscous cement that it says makes the delivery of cement into a vertebral body easier for physicians and safer for patients. Now, DFINE executives see the RF energy as a key to the door that could lead the company to much larger markets, enabling it to go beyond vertebral compression fractures and someday perhaps even beyond the spine to treating mestastic cancer of the bone.