Titan Spine’s new medical devices could set it apart (Journal Centinel)
The day after his first call to Barbara Boyan, Kevin Gemas was on a plane to meet her in Atlanta.
Gemas’ company, Mequon-based Titan Spine, was selling titanium medical devices used in back surgery to shore up injured or deteriorating vertebrae.
The devices seemed to work better than the plastic materials that were commonly used for spinal fusions at the time, but Gemas and his Titan Spine co-founder, Neenah spine surgeon Peter Ullrich Jr., didn’t know why.
Boyan did. A cell biologist at Emory University, she had spent decades studying how bones heal.
“There is more here than meets the eye, and more than you guys probably realize,” she said at the time, according to Gemas.
The result of that 2009 meeting was the development of a second generation of devices with a more precisely roughened surface that resembles that of bone and that theoretically triggers the cellular reaction needed to encourage beneficial bone growth.
For people with debilitating back pain, this may lead to reduced inflammation, quicker healing and better outcomes.
Following Gemas’ meeting with Boyan, Titan Spine developed a manufacturing process that creates pits in its devices on a scale of one to three micrometers. By comparison, a cell is 10 micrometers.
The approach is “biomimetic,” or designed to mimic nature, said William Murphy, a professor of biomedical engineering and orthopedics at the University of Wisconsin-Madison.
“There’s a lot of potential in that strategy,” said Murphy, who is co-director of the university’s Stem Cell and Regenerative Medicine Center.
Titan Spine’s first generation of devices gave the company a solid foundation. The company — which employs some 84 people and has a manufacturing and inspection plant in Brown Deer — is on track for revenue of $43 million this year.
The new devices have the potential of setting it apart in a large and lucrative market. About 650,000 to 675,000 spinal fusions are done a year, said Charles Whelan, a senior analyst who follows the medical-device industry for Frost & Sullivan, a research and consulting company.
The market for metal and plastic medical devices for spine surgery is estimated at $1.6 billion a year. And despite criticisms that spinal fusions are done too often, the market continues to grow at 4% to 5% a year.
Titan Spine is the only company with clearance from the Food and Drug Administration for medical devices with a nano-textured surface — distinguishing them from devices made of plastic or bone from cadavers as well as other devices made of titanium.
The devices were given their own diagnostic code by the Centers for Medicare and Medicaid Services this summer, potentially enabling the company to circumvent its much larger competitors when selling its devices to health systems.
This fall, the company raised $7.5 million from an investor. And it has doubled its sales force in the past year.
“Now is the time to actually get this new product, with a new code, the new FDA clearance and with all the new science, out onto the market,” said Ullrich, the company’s chief executive officer. “It’s a real inflection point for us.”
No definitive studies have been done, but several studies published in peer-reviewed journals have shown that the underlying design of the company’s devices reduces inflammation in lab experiments.
That theoretically would lessen pain and promote healing — and is why Titan Spine is drawing some attention among spine surgeons.
“In this space, no matter what company comes up with whatever technology — whatever bells and whistles they claim is better than their brethren — all will point back to Titan Spine and their data,” said Wellington Hsu, a spine surgeon and professor at Northwestern University.
Ullrich and Gemas — friends since their days at Plymouth Comprehensive High School — founded the company in 2006 with their own money and investments from friends and associates.
The company started small, initially selling one model that Ullrich had come up with based on his knowledge of roughened titanium used in dental implants.
Some surgeons were willing to try the medical devices and had good outcomes.
“We saw dramatic decreases in pain scores after six weeks of surgery,” said Adam Bruggeman, an orthopedic surgeon in San Antonio, Texas, who now receives speaking fees from the company.
Devices for spine surgery can cost $2,500 to $5,000, and often several are used in surgery. The initial sales generated enough cash that the company could gradually expand its product line from one model to seven, each designed for a specific procedure, without raising money from venture capital firms.
In 2014, Ullrich stopped practicing to work full time for the company. Sales hit $22 million that year and $33 million in 2015.
By then, competitors such as Medtronic and DePuy Synthes Cos., part of Johnson & Johnson, were moving to titanium devices.
But Titan Spine was working to improve its devices. That would entail learning about cell biology, drawing on the research of Boyan and her colleagues.
Boyan, now dean of the School of Engineering at Virginia Commonwealth University, holds 21 patents, with others pending, and had spent much of her career studying how the body creates bone cells.
She also took a liking to the people at Titan Spine.
“They’ve agreed to do it my way — to do it as science,” said Boyan.
By around 2010, her research was showing that how a body reacts to a medical device or implant is affected by its surface.
She and other researchers also found that adding chemicals to encourage bone growth wasn’t necessary. “These cells on the right surface behave the way they are supposed to,” Boyan said.
What she called the third “eureka moment” was that the surface needs to be exactly the right size — within one to three micrometers, or microns — to trigger the desired response.
Titan Spine, using a proprietary manufacturing process, spent three years testing 35 different surfaces, eventually determining that the ninth one was the best.
It was only by meeting Boyan that the company came to understand the underlying biology.
Now Titan Spine has to sell the device — and it faces the challenge of competing against much larger companies.
Most health systems and purchasing organizations negotiate contracts with two or three companies to get better prices.
Titan Spine could sell its first generation of devices because the contracts typically allow a hospital to buy a certain percentage of their medical devices from other companies.
The new Medicare diagnostic code, which went into effect in October, should enable Titan Spine to sidestep those caps. But the company still must negotiate contracts with each purchasing organization, health system or hospital.
“We are talking to everyone we can now,” Ullrich said. “You can’t flip a switch on this.”
Titan Spine also hopes to get a premium price, in part because the company recommends that surgeons not use bone morphogenetic protein, or BMP, which enhances bone growth, with its medical devices. BMP costs more than $2,000, and at times as much as $5,000, for each surgery. The cost doubles when two levels are fused.
Negotiating the contracts is slow going. But Ullrich sees some encouraging signs.
Titan Spine estimates that 475 surgeons — out of roughly 6,000 spine surgeons in the country — have used its products this year.
“That really is getting to the sort of tipping point,” he said.
The company has the additional challenge of making the transition to the new generation of devices. That means carrying an inventory for both generations of the devices. Most of its seven models come in more than 40 sizes — and they all have to be available.
Titan Spine also has about 850 surgical kits — at a cost of about $25,000 to $30,000 each — on consignment to hospitals or that it ships out by overnight delivery when a surgery with one of its devices is scheduled.
The kits alone represent an investment of more than $2 million.
“The capital cost on this is extreme,” Ullrich said.
The company also will need to do studies comparing the effectiveness of its devices to others.
The studies will take several years but should be relatively easy to do, said Brandon Rebholz, a spine surgeon and assistant professor at the Medical College of Wisconsin.
But Rebholz, who has used Titan Spine’s devices in surgery, said physicians were willing to try the first generation of the company’s devices and got good results. That should make it easier for them to move to the new generation of devices.
Titan Spine is certain to face more competition in coming years from companies introducing similar products. But it appears to have a head start — and apparently it has established some name recognition and maybe even buzz.
According to Hsu of Northwestern, “They are well-known and recognized as one of the experts in the particular segment of the field.”