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Breakthrough would be an apt term for the year Catalyst Orthoscience just experienced. The Naples-based medical device company, hot off winning FDA approval for its innovative new reverse shoulder implant system, closed a $12.5 million funding round that will help it acquire more inventory and hire staff it will need to drive sales in 2022.
“As tough as this year has been,” says CEO Brian Hutchison, “we've actually doubled revenue from (2020) and we think we can double it again in (2022).”
‘As tough as this year has been, we've actually doubled revenue from last year and we think we can double it again next year.’ Brian Hutchison, CEO of Catalyst Orthoscience
Hutchison’s confidence is backed up by results. He says more than 200 successful shoulder reconstruction surgeries have already been performed with the company’s reverse shoulder system. The system was developed by Catalyst Orthoscience founder Dr. Steven Goldberg as a remedy for patients who, for whatever reason, have no rotator cuff or have a severely compromised rotator cuff. It’s an alternative to the firm’s anatomic shoulder replacement system, which is geared toward patients who have intact rotator cuffs and “mimics the natural shoulder,” Hutchison says.
“Historically, reverse shoulders have had a much more limited range of motion,” he explains. “What we've done is designed something to give the patient the maximum they can get. So they may not get as much as our anatomic system, but they get more than what's [currently available] in the marketplace. They can get back to their activities, have a pretty normal life and live pain free.”
In most cases, Hutchison adds, Catalyst Orthoscience’s reverse shoulder implant has restored 60% to 70% of a patient’s range of motion. “The feedback I'm hearing is really good,” he says.
Physicians and operating room staff have also given the product high marks, thanks to the simplicity of its design and instrumentation. It requires just one instrument tray, Hutchison says — a big improvement on other systems that need as many as eight trays to perform a single operation.
“Surgeons think it’s a very simple system,” he say, “which is the way it was designed.”
The dreaded 2021 supply-chain problems, however, were a thorn in the side of Catalyst Orthoscience, which outsources manufacturing of its medical products.
“We rely on top-tier medical manufacturers that know what they're doing,” Hutchison says, “but they all had issues with two major things: one, getting raw material to build the product; and two, massive issues with labor. It slowed down our lead times, which doubled and sometimes tripled. That should not happen, but it’s the reality. I don’t think we’re unique [in that sense], but it certainly impacted our revenue.”
Patience, Hutchison says, was a virtue that helped the company deal with 2021’s frequent “brownouts” — a missing part, instrument or other essential component that delayed production. Of course, the firm was far from alone in its logistical frustrations.
“Our backorder situation lasted all year long,” he says. “We just got out of our last brownout situation — the first time in six months we haven’t had a brownout.”
Now Catalyst Orthoscience aims to ride its momentum into 2022, when the firm will launch several new products related to the reverse shoulder implant. The fourth quarter, Hutchison said in a late November interview, is typically the largest quarter for orthopedic sales, and in that sense, 2021 is no different than past years. (The company declines to disclose specific sales figures.)
“We're having an amazing fourth quarter and we want to continue that,” he says. Next year, “We’d love to double the business again and expand our reach. We’re also looking to begin data collection on clinical outcomes. We’ve gotten some papers published, but we'd like to see more evidence to support what we hear anecdotally. We want to see that show up in papers.”
In 2021, many companies discovered new ways to adjust to the pandemic. These nimble entrepreneurs believe that know-how — and guts — will be a key factor for continued success in 2022. Click the links below to read more about the Business Observer's 2021 newsmakers.
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