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Conformis Next Generation Hip System Granted FDA Clearance

12 Nov Conformis Next Generation Hip System Granted FDA Clearance

Conformis Inc (NASDAQ: CFMS), a medical technology company dealing in Knee and Joint replacements, has announced the clearance of its next generation Conformis Hip System by the FDA. The Company’s leading-edge patient-specific arthroplasty joint replacement implants, moulded to suit each patient’s unique anatomy, are developed using its proprietary iFit Image-to-Implant technology platform. The new 3D – designed Conformis Hip System, which uses proprietary advanced  imaging and design software along with iJig instruments and patient-matched implants, will be part of the key technology focus at the 2019 American Academy of Hip and Knee Surgeons annual conference November 7–10, 2019 in Dallas, Texas.

Image Source: Company

Mark Augusti, Chief Executive Officer of Conformis commented

“Our new Conformis Hip system is compatible with multiple surgical approaches and is designed to provide the surgeon an efficient and accurate experience in the execution of the operative plan, We believe our system will allow surgeons to improve efficiency in the OR, and importantly—for the anterior approach—potentially eliminate the use of fluoroscopy.”

As per a Company statement the Conformis Hip System, iJigs, makes use of patient’s anatomic landmarks to make certain of the right orientation and placement of the femoral stem, as well as the acetabular cup. In addition, its reamer system offers a single-use patient-matched reaming solution that ensures efficient and accurate cup orientation to a controlled depth for each surgical case.

Conformis Inc (NASDAQ: CFMS)

Market Cap: $135.36M; Current Share Price: 1.97 USDChart
Data by YCharts

The Global Hip and Joint replacement industry is focused on technological advancements through constant research and development and is investing heavily to create state-of-the-art therapeutic options, which cater to a growing population with denigrated hips and joint conditions.

According to a report by KBV Research, the Global Hip Replacement market is estimated to be worth over $7.4 billion by 2025, growing at a CAGR of 5 percent. The growth in this market will be driven by an increase in the number of cases related to Osteoarthritis and Rheumatoid arthritis. The rising geriatric population, increased life expectancy and the obesity epidemic are some of the other contributing factors, which will propel the growth in the market.

The method of treatment involves diagnosis, therapeutic treatment and hip replacement procedures. The industry has witnessed the introduction of advanced multi-modality imaging systems like CT, MRI, and ultrasound imaging for both diagnostic and robotic surgery. The replacement hip is generally made of ceramic, plastic, or metal or a combination of one or more of these, and is used to address the problems with the femoral head and resurfacing of the damaged socket. Besides age-related degeneration, muscoskeletal diseases and trauma and injury management are some of the other areas which make use of hip and joint replacement services.

An increasing number of companies are recognizing the limitation of a one-size-fits-all approach, and delving into offering customization, by creating implants that are made after taking into consideration every patient’s unique measurements. There is a gradual shift from pre-set implants to customized offerings.

Conformis’ strategy revolves around placing the customer at the centre of implant design and manufacturing, though the use of advanced 3D imaging technology, cutting-edge manufacturing practices and customization, to suit each patients unique size and shape.

Image Source: Company

Conformis uses a proprietary iFit Image-to-Implant technology platform, to create joint replacement implants that offer customizations and a broad line of knee implants, intended to replicate the natural shape of a knee. Multiple clinical studies have proven the ability of its cruciate-retaining total knee replacement implant named iTotal CR, in delivering superior clinical outcomes, including better function and greater patient satisfaction, as per the Company.

The Company uses leading-edge technology and manufacturing to provide better outcomes for both physicians performing the surgery and patients. At its manufacturing facility, CAD engineers spearhead the efforts to transform an individual CT images into patient-specific implant designs, through use of an automated software conversion. The result is a fully personalized kit per patient. Conformis is redefining the knee arthroplasty space by eliminating the need to focus on soft tissue balancing, by creating implants that adhere to the body’s natural condylar shape and contour.

Additionally, the Company’s iTotal implant system includes a pre-operative plan for the surgeon named the “iView”, which provides 3D images of the bone surfaces, implant placement and operative guidance for critical cuts as per the Company.

Conformis product portfolio consists of iTotal, a custom-made cruciate retaining and posterior stabilizing total knee replacement; The Conformis Hip system, a first-in-class primary total hip replacement system using 3D imaging to offer a stem and acetabular cup size. In addition it also offers iUni and iDuo, customized parital knee replacement options and iJig Instrumentation, 3D printed surgical instrumentation.

Risk Assessment

  • Conformis has recently entered into a definitive agreement with Stryker Corporation (NYSE: SYK), a leading medical technology Company to sell and license certain assets relating to Conformis’ patient-specific instrumentation (PSI) technology for use in conjunction with Stryker’s knee implant offerings. Conformis will receive $14M up-front and up to an additional $16M in milestone payments as part of the deal, which also includes its market leading Triathlon Total Knee System.
  • The Company faced a setback this year, with Aetna, the third largest commercial insurance payer, denied coverage to conformis, as a Company rather than the usual product denial. The CEO of the Company attributed this to a snafu, and stated that Aetna is reviewing its policies and the Company is expecting to see a change in stand or some form of answer for the blanket denial.
  • The increasing geriatric population coupled with obesity, makes the CFMS total knee replacement, a proposition with great future potential. Furthermore the deal with Stryker Corporation and the launch of its new Identity total knee system will augur well for its future growth prospects.
  • As per the Company’s Q3, 2019 financial results, the Company had cash, cash equivalents and total investments $29.4 million as of September 30, 2019. However the Company witnessed a 40% year-over-year decline in its total revenue by $11.7 million to reach $17.3 million, while its product revenues decreased by $1.2 million to $17.1 million, or 7% year-over-year on a reported basis, which the Company attributed to the denial of insurance coverage by Aetna insurance.
  •  Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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