Somersault Orthopedics: Surgical Planning For Joint Replacement
Executive Summary
Somersault Orthopedics Inc.’s enhanced surgical planning software for joint replacement procedures is designed to increase orthopedic surgeons’ efficiency and accuracy when using patient-specific instrumentation, thus resulting in better patient outcomes.
Somersault Orthopedics Inc.
5820 Stoneridge Mall Road
Suite 310
Pleasanton, CA 94588
Phone: (415) 234-7968
Web Site:
www.somersaultortho.com
Contact: Charlie Chi, PhD, President & CEO
Industry Segment: Orthopedic Surgery
Business: Web-based surgical planning software and instruments
Founded: March 2012
Founders: Charlie Chi; David Schlerf, VP of Clinical, Regulatory & Quality
Employees: 8
Financing To Date: $3.6 million
Investors: Lighthouse Capital LLC; Airborne Capital LLC
Board Of Directors: Charlie Chi; William Daniels; Evan Ng
Scientific Advisory Board: Daniel Snyder, MD; Thomas Meade, MD; Joseph Vernace, MD; Christopher Ninh, MD
Enhanced surgical planning software for orthopedic procedures from Somersault Orthopedics Inc. will soon allow surgeons increased efficiency and accuracy when using patient-specific instrumentation, thus resulting in better patient outcomes, according to company president and CEO Charlie Chi. The Vault System is an open-platform technology that operates across all the different implant systems. “We let the orthopedic surgeon choose what is best for the patient,” says Chi. The web-based presurgical planning and templating software relies mostly on MRI for use in orthopedic and trauma applications.
There are over one million orthopedic procedures performed annually in the US that could benefit from use of the Vault System. These are in patients with arthritic joints who undergo joint replacement surgery to alleviate pain and discomfort. Somersault is primarily concentrating on the knee, hip, and shoulder, for a potential annual market cap of roughly $600 million for its product, which received 510(k) clearance in May 2013. CE mark is expected in the fall.
Chi and co-founder David Schlerf, VP of clinical, regulatory, and quality, met in 2007, while both were employed at OtisMed Corp. (a patient-matched instrument for orthopedic surgery). Chi had co-founded OtisMed in 2006, and served as president and CEO until 2009, whereas Schlerf was director of quality, regulatory, and clinical affairs from 2007 to 2009, when the company was acquired by Stryker Corp. “We took technologies from various fields, such as imaging, manufacturing, and software, to develop the Vault System for orthopedic applications,” says Chi, whose background also includes being manager of research and development at Thoratec Corp. (ventricular-assisted implantable devices for cardiovascular disease) from 2003 to 2006, and technical lead for ON World Inc. (wireless sensors) from 2002 to 2003.
Somersault’s Vault System is designed to enhance surgical planning. Once an orthopedic surgeon determines that a patient needs joint replacement surgery, the patient is sent to an imaging center for an MRI scan of the joint, at least 14 days before surgery. “Imaging can be a CT scan instead, but we prefer an MRI,” Chi notes. The imaging (anywhere from 40 to 50 slices) is then uploaded to the Vault System, the company’s secured database, via a standard personal computer with an Internet browser. Within a few days, the images are processed to produce an initial default surgical plan, after which the surgeon is notified that the plan is ready for review. The surgeon then simply logs in to the Vault System, where he can confirm or change the plan.
An example of a plan for knee surgery is three different views or anatomic planes of the knee. “This imaging provides the angles and the dimensions of the patient’s anatomy,” Chi explains. “Based on these angles and dimensions, the surgeon can determine if those are the appropriate alignments for that patient.” Once the plan is approved, ideally about seven days before surgery, the surgeon authorizes the manufacturing of patient-specific instrumentation (cutting guides) for use during surgery, based on the patient’s anatomic landmarks. The company outsources the manufacturing of the instruments to a specific undisclosed firm. “Everything is patient-specific,” Chi states.
Once the plan is approved, ideally about seven days before surgery, the surgeon authorizes the manufacturing of patient-specific cutting guides for use during surgery, based on the patient’s anatomic landmarks.
For knee replacement surgery, which represents about 55% of all joint replacement surgeries, two patient cutting guides (one for the femur and one for the tibia) are shipped directly to the surgical center at least one day before the procedure. For hip replacement surgery, which constitutes about 40% of the overall market, there are also two patient cutting guides (one for the acetabular cup and one for the femoral stem). The guides are pinned to the bone temporarily, then removed once the bone is resected. “These patient-specific cutting and alignment guides allow for personalized alignment and precise implant placement,” Chi says.
The Vault System offers the only web-based surgical planning and templating tools that support implants from all manufacturers, according to Chi. “With only a few minutes of input, the orthopedic surgeon is able to pre-plan each joint replacement procedure and personalize the surgical approach for the individual patient,” he says. “Our planning software determines the optimal size and placement of the implant, while the patient-specific cutting guides assist in resecting or marking the bone to match the correct position and alignment of the implant designated by the surgeon,” Chi says.
Results to date have been “great,” Chi conveys. “Surgeons have reported increased efficacy in the use of the instruments and increased accuracy. There have also been fewer adverse events because we can eliminate the use of some instruments that are intrusive to the body. Patient outcomes have also improved.”
Major competitors include Zimmer Biomet Holdings Inc. (Zimmer Patient Specific Instrumentation [PSI]), ConforMIS Inc. (iFit), and OrthAlign Inc. (KneeAlign). However, both the Zimmer and ConforMIS products are limited to each company’s implant system. “In contrast, we have an open platform, so surgeons can select any implant brand they choose,” Chi says. “Our product is also more reliable, due to the way we make the instrumentation. Our guide fits the patient’s anatomy better, because we take measurements directly off the MRI, so it is using direct measurement, as opposed to both Zimmer and ConforMIS that use MRI/CT imaging to generate a three-dimensional virtual model of the patient’s anatomy with human intervention, which inherently creates errors.” In addition, ConforMIS’ lead time is seven to 10 weeks for custom implants and instrumentation. Although Zimmer’s lead time is less, at three to four weeks, it is still significantly longer than the 14 days needed by Somersault.
OrthAlign, on the other hand, has no imaging capabilities. It is simply a navigation system similar to GPS, “which is less accurate. It does not take into account the unique anatomy of the patient,” Chi says. “Basically, the navigation system takes two points and draws a straight line. It is limited to alignment and does not allow for implant sizing.” Moreover, such technology “does not create any value for the hospital or the patient because this technology is comparable to traditional mechanical alignment guides already in the market.”
Somersault’s patient-specific instruments are scheduled to begin selling throughout the US in May via a network of independent distributors. The Vault System software is free to users, with costs incurred for the instruments ordered per patient-case, which are not reimbursable. “Although this is an additional cost to a hospital, the price is very affordable and we can demonstrate a lot of value and benefits that the instruments provide, including increased surgical efficiency for reduced operating time of 25% to 40%,” Chi points out. “We can also reduce instrumentation and inventory at the hospital because we know the size of the implant ahead of time.”
International sales should begin in early 2015 with a sales model similar to that in the US, most likely non-reimbursed specifically but part of a bundled payment for implants. Somersault has several pending patents (none issued) and does not share any royalties and/or revenues with another entity.
The $3.6 million Somersault has raised to date represents a family-and-friends $650,000 Series A round that closed at the end of 2012, and $50,000 short of a $3 million Series B round that is scheduled to conclude the end of May, funded mostly by two Chinese private equity firms: Airborne Capital LLC (50%) and Lighthouse Capital LLC (30%). “At this point, we do not envision a Series C, if we can generate revenue this year,” Chi says.
Chi says one of the advantages of Somersault’s open-platform technology is that the company can work with all the various orthopedic players, without locking itself to one specific company with a limited market size. The most likely exit strategy is acquisition, but probably no sooner than five years from now, by an orthopedic firm or a health care company that seeks to enter the orthopedic space. Somersault is also exploring personalized instrumentation for procedures in sports medicine, spine surgery, and even craniofacial reconstruction.