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Features July/August 2015
Volume 11, No. 5

32 The Top 10 Mergers, acquisitions and new healthcare

value chains shape the orthopedic sector’s
largest players.

72 Driving a Successful Medical Device

Product Development Cycle
When you set out to bring a new medical device to market, avoid
spinning your wheels—follow a tried-and-true road map.

76 Orthopedic Manufacturing: A Look at the

Current State of Product Development
For many orthopedic OEMs, R&D means enhancing existing products,
getting them to market quickly, keeping costs down and exceeding
regulatory requirements.

Orthopedic Design & Technology (ISSN # 2157-1449) is published bi-monthly with an additional issue in July by Rodman Publishing Co., 70 Hilltop Rd., Ramsey,
NJ 07446-1150, USA. Phone (201) 825-2552. Periodical postage paid at Ramsey, NJ 07446 and additional mailing offices.
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 STRENGTH
FLEXIBILITY
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SLEEPING
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FEELING WHOLE
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SLEEPING
Why do we think about
NORMALrequirements
regulatory AGAIN
early –
QUALITY from the design
OF LIFE
stage on? To provide an
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Working in accordance
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regulatory team can provide
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©2015 Orchid Orthopedic Solutions LLC REG-1-1 www.orchid-ortho.com
Departments & Columns July/August 2015
Volume 11, No. 5

Editor’s Letter........................................................................... 8
How do you measure medtech success?
GROUP PUBLISHER
Howard A. Revitch, hrevitch@rodmanmedia.com
Editorial Advisory Board........................................................10
Listing of Orthopedic Design & Technology Editorial EDITORIAL DIRECTOR, MEDICAL DEVICES
Advisory Board members. Christopher Delporte,
cdelporte@rodmanmedia.com
News Front..............................................................................12 MANAGING EDITOR
Integra LifeSciences spins off orthobiologics business.
Michael Barbella,
mbarbella@rodmanmedia.com
Financial Reports...................................................................16
The Dodd-Frank Act at 5: Nary a nay to exorbitant CEO pay. ASSOCIATE EDITOR
Ranica Arrowsmith,
rarrowsmith@rodmanmedia.com
Washington Roundup............................................................20
Senate bill aims to speed up FDA’s medical device review ART ASSOCIATE
process. Tyler Natale, tnatale@rodmanmedia.com

ASSOCIATE PUBLISHER
Risk Management ................................................................22 Mark Weeks, mweeks@rodmanmedia.com
How to bulletproof your firm from expensive employment
liability risks. SALES MANAGER
Patrick Browne, pbrowne@rodmanmedia.com
New Technology Update........................................................24
ChoiceSpine launches Blackbird posterior cervical system SALES MANAGER
Julie Steinkrauss Fuhrer,
in the U.S.
jfuhrer@rodmanmedia.com

Design Viewpoint....................................................................26 RODMAN MEDIA CORP

Virtual population analysis improves orthopedic implant
design. PRESIDENT
Rodman J. Zilenziger, Jr.
Market Snapshot....................................................................30 EXECUTIVE VICE PRESIDENT
Advances in MRI: Keeping up orthopedics’ image. Matthew Montgomery

Industry News.........................................................................80 VICE PRESIDENT, EDITORIAL DIRECTOR

Single-procedure ratchet developed by ECA Medical. Tom Branna, tranna@rodmanmedia.com

ART DIRECTOR
People News ..........................................................................83 Michael Del Purgatorio,
Senior nanotechnology specialist hired by Titan Spine. mdelpurgatorio@rodmanmedia.com

PRODUCTION MANAGER
Calendar..................................................................................85 Lisa St. Charles, lstcharles@rodmanmedia.com
MPO Summit returns to Utah.
Audience Development Manager
Classifieds...............................................................................86 Joe DiMaulo, jdimaulo@rodmanmedia.com
A listing of advertiser services.
CIRCULATION DIRECTOR
Richard DeVoto, rdevoto@rodmanmedia.com
Ad Index..................................................................................89
A listing of advertisers in this issue. CORPORATE HEADQUARTERS
70 Hilltop Rd. • Third Floor
Ramsey, NJ 07446 USA
The Last Word........................................................................90 Phone: (201) 825-2552
A look outside the Top 10: Orthopedic startups making a Fax: (201) 825-0553
mark.

6 • ODT odtmag.com July/August 2015

Editor’s Letter
Success Factors
H
ow is success measured? How’s that for a broad topic for
discussion? Let’s narrow it down a bit. How is success in
business evaluated? A little more focused, but still a wide-
open question. Is it by profit? That’s certainly one easy measurement.
Perhaps it is by customer satisfaction—very important. Maybe it’s by
employee satisfaction (three cheers to the forward-thinking firm that
charts success by this). In today’s social-media obsessed world, suc-
cess could be how many“likes”something you’ve posted to Facebook
receives or the number of Twitter fol-
lowers you have. Is it the page views,
page visits or click-through rates
your website gets? Lots of people
hang their hats on the strength of
those metrics to be sure.
No matter what the combina-
tion of factors, success is fleeting
in a fast-paced world. Heaven
forfend your online numbers dip,
for example (not as successful to-
day as you were last month?). The
winning formula—if there is such
a thing—is an amalgam of vari-
ables, and most of them are out of our direct control. What we
can control, however, is how hard and how smart we work.
The July/August issue is our annual Top Company report, in
which we examine 10 of the world’s largest orthopedic firms. Just
as in years past, we categorize the list based on reported financial
data. While that gives us a starting point for a discussion, it’s only a
small part of what makes these companies—and the orthopedic de-
vice industry as a whole—tick. Accomplishment, of course, doesn’t
just come from billion-dollar revenue streams. If the U.S. Food and
Drug Administration just approved a startup’s first implant that also
happens to have a solid reimbursement pathway, the executive team
of the small firm is feeling pretty well-off—though there hasn’t yet
been a single sale. Money is a byproduct of success.
In compiling all of the data required to create this year’s Top
Company installment, I continued to think about the topic of suc-
cess, the factors that drive it in today’s medtech marketplace, and
what its recipe really is. Increasingly, companies with the resources
and foresight are going beyond the outmoded model of claiming
market share with one type of technology and its clinical benefit
alone. Today, the winning mixture is technology that moves past im-
proved clinical outcomes at one point along the value chain, but also
helps healthcare systems manage costs, keeps patients from return-
ing to the hospital with complications, can track a patient’s progress
remotely and ultimately saves the entire system time and money in
the long term. Savvy companies know that doctors aren’t the sole
8 • ODT odtmag.com July/August 2015
purchasing decision-makers they once were. Hospital chains are
making more centralized procurement decisions. As such, there is
pressure on orthopedic manufacturers not only to establish clinical
efficacy, but also to combine it with improved economics.
According to a recent blog post by Sharon Fong, a brand strate-
gist with Level Brand, a Minneapolis, Minn.-based healthcare-fo-
cused advertising, marketing and communications firm that works
with companies such as 3M, Beckman Coulter Inc. and Medtronic
plc, orthopedic device companies need to change their game be-
cause there’s no longer a“cookie-cutter formula”for success.
“Every aspect of the healthcare industry has to rethink their
way of doing business. And, because healthcare today is so fluid,
most healthcare and related industries are still figuring it out, in-
cluding the medical device marketing community,” Fong wrote.
“Technical and clinical features of the device alone will not drive
sales. Instead, hospital administrators, clinicians and payers will
all be part of the equation in the selection and purchase of prod-
ucts that combine devices and services built around delivering
solutions for everyone—patient, provider and payer.”
She writes that successful companies are the ones that un-
derstand and anticipate the continuous changes and trends in
healthcare; know the competition; are category leaders with
depth in the largest categories in which they operate, versus
breadth across multiple categories without clear leadership posi-
tions in any; understand the individual motives for purchasing;
and develop flexible marketing and sales models that solve for
the different ways physicians and procurement officers approach
purchasing decisions in different geographic locations.
To give orthopedic firms and their supplier partners the tools to
meet this mandate, Medical Product Outsourcing (the sister publication
of Orthopedic Design & Technology) is returning to Utah for the MPO
Summit (www.mposummit.com), held Sept. 29-30 at the Stein Erik-
sen Lodge in Park City. At the heart of the education and networking
event are sessions designed to: address the changing healthcare land-
scape and how it is reshaping medtech innovation pathways; provide
resources and skills for developing market-leading technologies; and
demonstrate the best manufacturing, R&D, regulatory and business
strategies to help firms compete and—yes, you guessed it—succeed. v
Christopher Delporte
Editorial Director, Medical Devices
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News Front
Integra LifeSciences Spins Off Orthobiologics Business
I
ntegra LifeSciences Holdings Corpora-
tion has completed the tax-free spin-off
of its orthobiologics and spinal fusion
hardware business, now known as SeaSpine
Holdings Corporation.
Integra stockholders received one
share of SeaSpine common stock for ev-
ery three shares of Integra common stock
they held on June 19, the record date for
the spin-off. SeaSpine shares began “reg-
ular way” trading on the Nasdaq Global
Select Market on July 2.
“[This] marks a meaningful mile-
stone for SeaSpine, as we reposition the
company for innovation and growth,”
said Keith Valentine, president/CEO of
SeaSpine. “We are well-positioned in
the spine market with an orthobiologics
platform, an R&D pipeline with several
product launches expected this calendar
year, and a strong balance sheet with $47
million of cash and no debt post-spin to
fund growth initiatives. We are confident
in our ability to deliver long-term growth
and value creation to our shareholders as
an independent company.”
The spinoff occurred seven months
after Integra announced its intentions
and four years after it acquired the Vis-
ta, Calif.-based firm for $89 million in
cash. The move allows Integra to focus
on specialty surgical solutions, orthope-
dics and tissue technologies. The portfo-
lio realignment, according to company
brass, is part of a larger transformation
strategy that began in 2012 and centers
on “optimizing the business and acceler-
ating growth,” according to a news re-
lease from the company.
“These strategic changes create a
much stronger platform for organic
growth and execution, and we believe
both companies will grow faster sepa-
rately than together,” Peter Arduini, In-
tegra’s president/CEO, said when the
spinoff was announced. “Moving for-
ward, Integra will have a simpler, more
12 • ODT odtmag.com July/August 2015
focused structure from which to oper-
ate, which should improve our ability
to achieve our longer-term growth and
margin improvement objectives. Further,
we believe these moves create exciting
opportunities for our shareholders and
both organizations.”
Integra officials said the separation
will provide both companies with a
faster top-line growth profile; allow the
new SeaSpine to invest more in top-line
growth initiatives such as sales, market-
ing and research and development, and
to access the capital markets; accelerate
Integra’s operating margin expansion
plans; and unlock equity value for In-
tegra’s shareholders.
The new SeaSpine consists of a port-
folio of spinal hardware solutions, in-
cluding unique interbody devices, mini-
mally invasive surgery solutions, and
deformity correction products, as well as
IsoTis, a leading brand in orthobiolog-
ics, including a range of osteoconductive
and osteoinductive solutions using de-
mineralized bone and synthetic matri-
ces. The company will operate out of its
current locations in southern California.
SeaSpine offers a portfolio of ortho-
biologics and spinal fusion hardware
solutions that help neurosurgeons and
orthopedic spine surgeons perform fu-
sion procedures on the lumbar, thoracic
and cervical spine.
Bacterin International to Become
Xtant Medical Holdings Following
X-spine Systems Buy
Publicly traded Bacterin International
Holdings Inc., a developer of bone graft
material, is purchasing the outstanding
shares of privately held X-spine Systems
Inc., a medical device manufacturer of
products for spinal surgery, headquartered
in Miamisburg, Ohio.
The deal calls for approximately 4.24
million shares of Bacterin common stock
and approximately $60 million in cash,
subject to customary working capital ad-
justments, and including the extinguish-
ment of approximately $13 million of X-
spine debt.
Once the deal closes, Bacterin will
change its name to Xtant Medical Hold-
ings Inc.
According to Bacterin officials, the
transaction will position the combined
company as a “comprehensive supplier for
spine surgery procedures”that offers hard-
ware and biologics through a “more sub-
stantial” national distribution footprint.
“This transaction joins two strong and
growing organizations and reinforces the
strategic initiatives outlined earlier this
year to expand our product offerings,
strengthen customer relationships and
expand our distribution capabilities. We
are excited to leverage further our com-
bined operating platform and exceptional
talent to drive, significant and ongoing
value for our stockholders. With the ad-
dition of X-spine, we will have a stronger
financial profile with over $80 million of
revenue and positive EBITDA (earnings
before interest, taxes, depreciation and
amortization),” said Dan Goldberger,
Bacterin’s CEO.
X-spine has numerous products for
the treatment of spinal disease, with an
emphasis on less-invasive treatments for
the degenerative spine, X-spine’s spinal
implants and instrumentation are highly
complementary to Bacterin’s leading or-
thobiologics portfolio. The great majority
of spinal procedures using X-spine’s prod-
uct portfolio could use an orthobiologic
that Bacterin currently offers, officials said.
“This transaction will increase the
scope of our organization with a new, di-
versified portfolio of products focused on
the orthopedic and spine markets. Fur-
thermore, we will be able to offer those
diversified products to our established
customer base, representing an accessible
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News Front
revenue growth opportunity for the com-
bined business. I look forward to working
with Dan and his team to open the next
chapter of our mutual success,” said David
Kirschman, X-spine Systems’ president
and CEO.
Kirschman will join the management
team and serve as executive vice president
and chief scientific officer of Xtant Medi-
cal. He also will be president of X-spine
Systems, the hardware subsidiary; and will
serve on Xtant’s board of directors.
Flower Orthopedics
Receives CE Mark
Horsham, Pa.-based Flower Orthopedics,
creator of the standardized, procedure-
based, bone fixation concept the Flow-
erCube, has received the CE mark. The
approval, according to company officials,
opens the opportunity for significant ex-
pansion of the FlowerCube concept in the
European Union.   use feature also decreases the risk of in-
The approval encompasses Flower Or-
thopedics’ entire product line, which con-
sists of complete bone fixation solutions
for upper and lower extremities. Consist-
ing of more than 400 implants, including
a full portfolio of cannulated screws, each
implant has been engineered with a clear
surgical strategy in mind to provide the ul-
timate in secure bone fixation.
Flower Orthopedics’ single-use instru-
ments are standardized and multifunc-
tional, expediting case completion and
driving surgical efficiency in the operating
room (O.R.).
Tailored for specific surgical indications,
the FlowerCube houses all of the requi-
site bone fixation implants and instru-
ments; they are sterile packaged, made for
single-use and always ready for Surgery.
The FlowerCube is delivered ready for use,
eliminating set drop off and preoperative
on-site sterilization.
“Receiving CE marking approval is a
significant milestone for Flower Orthope-
dics. The market response to the Flower-
Cube concept, to our anatomic implants
and to the single-use instruments in the
United States has been positive, and we
are excited to bring this concept to the
European market,” said Oliver Burckhardt,
14 • ODT odtmag.com July/August 2015
CEO and president of Flower Ortho-
pedics. “We are committed to providing
our customers in the United States and
Europe cost-effective, safe and efficient
Ready-for-Surgery treatment solutions
that bring true quantifiable value into to
the O.R.”   apy, the primary treatment option in in-
Flower Orthopedics currently is seek-
ing distribution partners in Europe, and
is hoping to start selling products in the
region next year.
Flower Orthopedics’ “Ready-for-Sur-
gery” concept provides surgery-specific
applications in individual sterile packag-
ing, which eliminates the need for pre-
op sterilization and, compared to current
practices, considerably reduces the num-
ber of implants and instruments brought
into the operating room.
All instruments in the FlowerCube are
single-use, removing the need to repro-
cess surgical tools post-op. This single-
fection stemming from reusable devices
and expedites valuable operating room
turnaround time, the company claims.
With these efficiencies, the firm expects
hospitals and ambulatory surgical centers
to save as much as 30 percent of the com-
bined implant and instrument costs cur-
rently spent on each surgical case.
Tyber Medical Acquires Licensing
Agreement for Antimicrobial
Surface Coating Technology
Tyber Medical LLC, a private-label man-
ufacturer of spine and orthopedic im-
plants, has acquired an exclusive licens-
ing agreement for its BioTy antimicrobial
surface coating technology.
The company offered few specifics
of the deal, naming neither its licensing
partner nor the applications best suited
for the technology. In a news release
Tyber executives only would identify
the licensing partner as “a prestigious
biomaterial research institution,” and
said the technology would be used in
“certain orthopedic applications.” The
agreement also includes allowance for
refining the manufacturing process, as
well as ongoing funding for additional
scientific studies.
Infection control is a critical concern
in healthcare. Nowhere is that more evi-
dent than with surgical implants, where
the body’s own defense mechanism will
coat an implant with a “biofilm” layer.
Biofilm is known to resist antibiotic ther-
fection control.
As a result, the cost impact of biofilm
is significant. In fact, hospital-associated
infections caused from biofilm on medi-
cal devices is estimated to cost the U.S.
healthcare system $35.7 billion to $45
billion annually, according to the Cen-
ters for Disease Control and Prevention
(CDC). Recent information released by
the CDC shows that surgical site infec-
tion rates accounted for 31 percent of all
healthcare-associated infections among
hospitalized patients. In part, this is due
to the widespread production, use and
misuse of antibiotics, which have con-
tributed to the next generation of drug
resistant infectious organisms, commonly
called “superbugs.”
Tyber Medical’s BioTy Antimicrobial
surface coating features technology
that exhibits surface characteristics on
a nanoscale that potentially can sig-
nificantly reduce infections. Company
executives said the BioTy process can
be applied to various implant materi-
als, including titanium, stainless steel,
cobalt chrome and PEEK (polyether
ether ketone).
“New research suggests that implant
nanoscale features alone, without using
pharmaceutical agents, can inhibit bacte-
ria and virus functions to improve medi-
cal device performance,” said Thomas J.
Webster, Ph.D., Art Zafiropoulo chairman
and a chemical engineering professor at
Northeastern University (Boston, Mass.),
and a new advisory board member at Tyber
Medical. “I’m pleased to be working with
Tyber Medical to further develop the Bio-
Ty technology for use on a wide range of
surgical implants.”
“We see three significant benefits re-
sulting from our BioTy technology,” said
Jeff Tyber, company founder and presi-
dent. “Initially, it may enable us to be
first to market with implants that exhibit

exceptional infection control proper-
ties. Second, by tailoring implant surface
characteristics, we can optimize certain
qualities of the implant, such as bony
ingrowth and attachment, to meet the
needs of specific clinical applications.
Lastly, the potential inherent antimicro-
bial properties of the BioTy process may
negate the need and expense of phar-
maceutical agents. As a result, cost ef-
fective infection control may be within
our reach.”
Based in Morristown, N.J., Tyber
Medical designs and develops Class II
orthopedic systems. Its BioTy technology
is the latest addition to a product portfo-
lio in spine and orthopedics that includes
headless compression trauma screws, an
anterior cervical plating system, and a full
line of spinal interbody spacers.
Smith & Nephew Acquires
Russian Orthopedic Manufacturer
Smith & Nephew plc has acquired the
trauma and orthopedics business of De-
Ost LLC and DC LLC, a manufacturing
company in the DeOst group. DeOst has
distributed Smith & Nephew’s products in
Russia since 2009.
According to a statement issued by
Smith & Nephew executives, the ac-
quisition brings the company closer to
customers through well-established
commercial channels, allowing the
London-based orthopedics behemoth
“to better understand needs and offer a
fuller range of products and services.”
DC’s local capability to manufacture
mid-tier trauma products will allow
Smith & Nephew to reach more custom-
ers following recent changes relating to
state tenders supporting Russian pro-
duced products, officials noted.
“Smith & Nephew has grown its
business in Russia since 2005. This in-
vestment, in-line with our strategy to
build our platform in the emerging
markets, significantly boosts our local
presence and prospects and will enable
us to take advantage of market dynam-
ics and better serve Russian custom-
ers,” said Olivier Bohuon, CEO of Smith
& Nephew.
July/August 2015 odtmag.com ODT • 15
Approximately 350 new employees
have joined Smith & Nephew.
Terms of the transaction were
not disclosed.
SpineGuard’s First-Half
Revenue Climbs 41 Percent
Disposable medical device firm Spine-
Guard has grown its half-year revenue by
41 percent to nearly 3 million euros ($3.3
million) Global revenue in the year’s first
half, ended June 30, increased 860,000
euros to 2.97 million euros, compared
with 2.11 million euros in the first half
of 2014. At a constant exchange rate, the
growth rate is 21 percent, the company
noted in a news release.
“We are very pleased with the strong
growth that the company delivered in the
first half of 2015. Sales momentum is par-
ticularly solid in the U.S. and France, our
two direct markets which had new re-
cord months in June,” SpineGuard CEO
Pierre Jérôme said. “Looking forward,
we are really excited about the upcom-
ing launch of DSG (Dynamic Surgical
Guidance) screws in collaboration with
our partners.”
Revenue in the United States increased
52 percent (23 percent in constant cur-
rency) to 2.27 million euros ($2.5 million)
in the first half of 2015, compared with 1.5
million euros in the first half of 2014, and
represented 77 percent of global revenue.
In the rest of the world, revenue increased
14 percent during the first half of 2015 to
696,000 euros ($772,000) compared with
610,000 euros in the same period in 2014,
and represented 23 percent of global rev-
enue. France, the company’s second direct
market after the United States, reported
a 42 percent growth in the second quar-
ter of 2015 after 36 percent in the first
quarter, and represents 5 percent of the
global revenue. First-quarter sales jumped
47 percent to 1.51 million euros ($1.63
million), while second-quarter revenue
climbed 35 percent to 1.45 million euros
($1.61 million), according to the company’s
financial data.  time for the patient.”
The company sold 3,716 PediGuard
units in the first half of 2015 compared
with 3,008 in the first half of 2014. Of that
News Front
total, 1,923 units were sold in the United
States, representing 52 percent of total
units sold globally.
SpineGuard has offices in Paris,
France, and San Francisco, Calif. The
company was founded in 2009.
OrthoSpace Begins U.S. IDE Trial
Caesarea, Israel-based OrthoSpace Ltd.
has enrolled the first three patients in its
U.S. investigational device exemption (IDE)
pivotal study. The study is a 184- patient
randomized, single blinded control study
that compares the company’s Inspace bio-
degradable balloon system to conventional
repair or partial repair for the treatment of
full thickness massive rotator cuff tears.
While Inspace currently is commercially
available outside of the United States and
has been implanted in more than 5,000
patients in 15 countries, the trial will be
the first time the device is implanted in the
United States.
Edwin J. Rogusky, M.D., and Paul R.
Sensiba, M.D., performed the proce-
dures at University Orthopedics Center
in State College, Pa.
“We are honored to be a part of this
study and to initiate clinical study en-
rollment,” they said following the first
three procedures. “The data to date has
demonstrated Inspace’s safety and effi-
cacy, and we look forward to contribut-
ing to the U.S. data set to facilitate Ins-
pace’s entry into the U.S. market.”
“Having heard about promising results
with the use of this technology from our
colleagues abroad and having seen the
procedure in Europe, I am looking for-
ward to leading this group of U.S. surgeons
in completing this pivotal study that will
hopefully allow us to bring this innovation
to the United States,” said Nikhil N. Verma,
M.D., of Rush University Medical Center,
the primary investigator of the study. “In-
space addresses a current unmet medical
need for my patient population: a simple,
minimally invasive way to treat massive ro-
tator cuff pathology, with limited recovery
Enrollment in the study is ongoing, and
patients are being recruited at multiple
sites across the country. v
Financial News
The Dodd-Frank Act at 5: Nary a Nay to Exorbitant CEO Pay
Michael Barbella • Managing Editor

T
he controversy is not at all surprising.
In fact, the global debate is pre-
cisely the kind of fallout Daniel
Price expected from his groundbreak-
ing decision this past spring. The Gravity
Payments CEO reopened old pay dispar-
ity wounds and exacerbated the long-
standing war between the haves and
have-nots when he decided in April to
cut his million-dollar salary by more than
90 percent to give each of his employees
a raise.
Price set a $70,000 “minimum wage” at
his credit card processing firm, convinced
by research the total would boost workers’
emotional well-being ($75,000 is the re-
puted going rate for happiness, according
to a Princeton University study). The sal-
ary hike is set to accrue over the next three
years, enabling roughly 30 of the com-
pany’s 120 employees to double their pay.
Price is subsidizing the raises by reduc-
ing his stipend to employee levels (achiev-
ing minimum wage after two years) and Far from it. Price, in fact, is quite a savvy cades, their salaries rising 937 percent
using 75-80 percent of the company’s $2.2 businessman. By setting a company-wide between 1978 and 2013, according to the
million in anticipated 2015 profit. minimum wage, the CEO generated in- Washington, D.C.-based Economic Policy
Naturally, the company-wide sal- valuable publicity that ultimately will Institute. The rise is more than double
ary hike garnered global headlines, turn- boost sales, and also provided workers stock market growth and substantially
ing Price into an anti-establishment hero/ with an incentive to attract more business greater than the 10.2 percent hike in the
income equality poster boy hybrid. It also trig- and better handle clients. average worker’s stipend over that period.
gered a war of words in traditional and social Moreover, in cutting his own salary, The CEO-to-worker ratio is even more
media outlets between business leaders, aca- Price bucked tradition in generously com- telling. Fifty years ago, chief executives
demics and journalists deliberating the raises’ pensating himself for his work. earned 20 times more than their workers;
merits. Critics called the move“pure, unadul- “The market rate for me as a CEO com- the gap grew to 30:1 in 1978 and 58.7:1
terated socialism” that eventually will hurt pared to a regular person was ridiculous, by 1989 before surging in the 1990s to hit
Gravity employees; Forbes boldly predicted a it’s absurd,” he told The New York Times. 383.4:1 at the turn of the millennium. The
bad or“quiet”ending for the higher compen- “My salary wasn’t $1 million because I Great Recession narrowed the chasm a
sation, contending a $70,000 minimum wage need that much to live, but that’s what it bit in 2008 and 2009, but the ratios have
will be a “difficult sell” in the capital markets. would cost to replace me as a CEO. I think nearly returned to their 2000 levels, reach-
Supporters, however, argued the move will CEO pay is way out of whack...I want to ing 373:1 last year, up from 331:1 in 2013,
reduce turnover, increase morale and help be part of the solution to inequality in this AFL-CIO statistics indicate.
Price build a better company. country. If corporate America also wants Corporate America clearly has no in-
Some remained neutral but questioned to be a part of that solution, that would terest in following Price’s lead. And why
Price’s mindset. During an appearance on make me real happy.” would it? Annual pay for CEOs jumped
MSNBC’s “Morning Joe,” Huffington Post Price, however, is destined for disap- 12.1 percent last year, the fastest surge
editor Sam Stein bluntly asked the CEO, pointment. CEOs have enjoyed steadily since 2010 and up from a median increase
“Are you crazy?” rising paychecks over the last three de- of just 1.6 percent in 2013, a Towers Wat-

16 • ODT odtmag.com July/August 2015

 Financial News
CEO Salaries
Fiscal Base Cash Stock Total
Name Options Other
Year Salary Bonus Granted Compensation
Miles D. White 2014 $1,973,077 0 $4,649,999 $4,649,997 $6,459,168 $17,732,241
Bd. Chair/CEO/Dir. 2013 1,900,000 0 7,337,400 7,062,220 1,416,048 20,865,668
Abbot Laboratories 2012 1,900,000 0 9,429,176 2,057,000 7,032,660 25,118,836
Jeffrey R. Immelt 2014 $3,750,000 $5,400,000 $3,676,157 $2,565,000 $21,859,617 $37,250,774
Bd. Chair/CEO 2013 3,466,667 5,000,000 7,777,191 0 1,152,858 19,776,716
GE 2012 3,300,000 4,500,000 0 0 5,926,102 25,806,352
** Thomas P. Joyce 2014 $847,585 0 $2,801,483 $2,125,707 $2,631,501 $8,406,276
President/CEO 2013 635,000 0 4,646,551 2,945,689 1,200,980 9,428,220
Danaher 2012 600,000 0 1,530,865 1,577,898 1,255,598 4,964,361
Alex Gorsky 2014 $1,500,000 0 $9,467,380 $4,168,139 $9,853,787 $24,989,306
Chairman/CEO 2013 1,453,846 0 5,988,975 2,669,999 1,930,779 16,910,960
JNJ 2012 1,087,188 0 2,790,229 1,482,631 2,209,774 10,977,109
Inge G. Thulin 2014 $1,392,560 0 $4,750,085 $4,053,263 $9,919,681 $20,115,589
Bd. Chair/Pres./CEO 2013 1,339,000 0 4,160,025 3,046,438 5,381,403 16,368,708
3M 2012 1,228,373 0 4,000,053 3,059,772 4,501,413 14,784,476
Marc N. Casper 2014 $1,254,808 0 $8,277,048 $4,021,270 $3,893,831 $17,446,957
President/CEO 2013 1,115,479 0 7,382,592 3,220,776 574,033 16,168,880
Thermo Fisher Scientific 2012 1,030,038 0 10,442,400 0 189,863 13,555,101
Robert L. Parkinson Jr. 2014 $1,535,000 0 $3,580,637 $4,541,757 $5,647,308 $15,304,702
Chairman/CEO 2013 1,523,462 0 6,839,789 4,792,568 310,902 16,162,128
Baxter International 2012 1,453,077 0 6,348,010 3,922,648 1,518,775 17,521,770
George S. Barrett 2014 $1,314,630 0 $5,533,321 $2,866,244 $2,734,423 $12,448,618
Chairman/CEO 2013 1,285,000 0 5,335,018 2,695,845 137,632 11,474,800
Cardinal Health 2012 1,277,101 0 5,138,682 2,861,043 123,246 11,209,724
José E. Almeida 2013 $1,211,538 0 $5,103,983 $2,822,832 $427,425 $11,171,496
Bd. Chair/Pres./CEO 2012 1,154,808 0 4,549,997 2,699,141 193,265 10,279,728
Covidien 2011 846,795 0 5,224,971 2,081,345 129,068 9,407,766
Michael F. Mahoney 2014 $921,302 0 $6,044,228 $1,899,718 $1,662,636 $10,527,884
President/CEO 2013 900,000 0 6,647,490 1,874,997 186,943 10,851,430
Boston Scientific 2012 900,000 $750,000 5,867,193 1,732,439 508,150 10,783,782
Daniel J. Starks 2014 $1,097,574 0 $2,530,539 $5,061,571 $1,481,412 $10,171,096
Chairman/President/CEO 2013 1,045,500 0 2,303,385 4,854,634 1,466,894 9,670,413
St. Jude Medical 2012 1,045,500 0 1,426,001 2,912,165 1,338,148 6,721,814
Vincent A. Forlenza 2014 $985,000 0 $4,653,236 $3,153,732 $2,191,550 $10,983,518
Bd. Chair/Pres./CEO 2013 930,000 0 3,758,005 2,449,317 820,711 9,183,033
Becton Dickinson 2012 900,000 0 3,441,639 2,292,422 1,704,215 9,418,276
2014 $1,459,080 0 $3,067,051 $2,658,962 $4,933,752 $12,118,846
Omar Ishrak
2013 1,402,962 0 2,817,024 2,099,144 239,658 8,975,886
Chairman/CEO
2012 1,168,269 $1,553,042 19,069,565 2,150,585 97,221 25,025,639
Medtronic

Kevin A. Lobo 2014 $1,055,000 0 $3,249,982 $3,231,527 $1,583,638 $9,120,147

President/CEO 2013 1,025,000 0 3,000,021 2,854,200 1,557,698 8,436,919
Stryker 2012 585,417 $79,971 5,928,655 1,792,267 841,844 9,228,154
David C. Dvorak 2014 $934,919 0 $2,999,891 $2,999,957 $2,587,107 $9,521,874
President/CEO 2013 904,023 0 2,850,024 2,849,992 155,469 7,689,748
Zimmer Holdings 2012 883,114 0 2,850,098 2,850,038 1,186,715 8,639,336
Alexis V. Lukianov 2014 $900,000 0 $5,314,445 0 $1,087,867 $7,302,312
Bd. Chair/CEO 2013 900,000 0 4,080,496 0 1,134,789 6,115,285
NuVasive 2012 900,000 0 4,080,485 0 722,100 5,702,585
** Mark T. Mondello 2014 $1,000,000 0 $5,526,912 0 $12, 202 $6,539,114
CEO 2013 925,000 0 3,593,462 0 165,600 4,684,062
Jabil Circuit 2012 750,000 0 3,237,768 0 708,697 4,696,465

** Bradley R. Mason
2014 $610,769 0 $1,714,625 $486,332 $638,283 $3,450,009
President/CEO
2013 452,846 0 388,200 2,150,250 21,900 3,013,197
Orthofix

Source: U.S. Securities and Exchange Commission filings, 2014/2015. ** Recently appointed CEO

July/August 2015 odtmag.com ODT • 17

Financial News
son & Co. analysis found. CEOs at small-
cap companies ($300 million-$2 billion)
received the largest raise—13.7 percent—
compared with the 10.6 percent hike at
mid-cap firms ($2 billion-$10 billion) and
11.6 percent boost at large-cap organiza-
tions (more than $10 billion).
Shareholders aren’t helping Price’s
cause, either. Since being given the right
to vote on executive pay through passage
of the Dodd-Frank in 2010, investors gen-
erally have sanctioned top management
compensation. In 2014, roughly 95 per-
cent of shareholders at 500 of the largest
companies approved administrative sal-
ary plans, up slightly from 93.8 percent in
2011, according to data from compensa-
tion analysis firm Equilar.
“Most of these votes are pretty perfunc-
tory,” said Matthew Semadeni, associate
management professor at Arizona State
University’s W.P. Carey School of Business.
“People really aren’t using it for what I think
both Dodd and Frank intended, which was
to try to discipline management.”
Punishment has been few and far be-
tween, with failed “say-on-pay” votes de-
clining steadily from 2.6 percent in 2012
to 1.5 percent in 2013 and 1.1 percent last
year. Such dissent is rare in the medtech
industry, where shareholder approval for
executive pay averaged 90 percent in 2014.
Such complacency likely is tied to the
rising stock market. Research that Semad-
eni conducted concluded that investors
care more about stock performance than
the size of a CEO’s paycheck.
“It’s a very human thing,” Semadeni
noted.“If you’re doing fine, even if someone
else is maybe not, you’re going to not care as
much as when you’re not doing fine.”
Perhaps that explains the very fine
88.3 percent salary hike approved for GE
CEO/Board Chairman Jeffrey R. Immelt
and the 47.7 percent raise given to JNJ
CEO Board Chairman Alex Gorsky last
year. Though Immelt twice requested that
he not receive a bonus and declined an
$11.7 million payout under the company’s
Long-Term Performance Awards program,
94 percent of shareholders nonetheless
approved a $20.7 million increase in his
pension value and“non-qualified deferred
18 • ODT odtmag.com July/August 2015
compensation earnings” to boost his total
2014 earnings to $37.2 million.
Gorsky’s increase—like many in the
industry—was based on the company’s
fiscal performance in 2014. Despite suf-
fering declines in its Medical Devices
and Consumers segments, the multina-
tional still grew sales 4.2 percent (though
it was less than the 6.1 percent surge re-
corded in 2013) and grew stockholder
returns by 17 percent. Consequently, 96
percent of JNJ shareholders approved of
Gorsky’s $8 million raise and $24.9 mil-
lion total pay package.
Other considerable salary hikes
went to Medtronic plc Chairman and
CEO Omar Ishrak, who added $4.7
million to his pension value, non-eq-
uity incentive plan compensation and
deferred compensation earnings; 3M
Board Chairman/President/CEO Inge
G. Thulin, given $1.6 million in addi-
tional stock/options, and a $4.6 million
increase to his pension and non-equity
incentive plan/deferred compensa-
tion earnings; Becton Dickinson Board
Chairman/President/CEO Vincent A.
Forlenza, who received an extra $1.6
million in stock/options and increased
his pension value by $1.3 million; and
Jabil Circuit CEO Mark T. Mondello,
awarded a $75,000 base salary boost
and $2 million more in stock.
“As the public cried for executives’
pay to be tied to performance, that
trend has very much happened,” said
Kevin Scott, co-founder/CEO of the
ADDO Institute, a branding consulting
firm. “And now, as their stocks are per-
forming at very high levels, those CEOs
are reaping the benefits.”
In more ways than one: Rising stock
prices not only increase executives’ in-
dividual share value (most, if not all,
own stock in their own companies),
they also can warrant considerable
bumps in base pay, stock, options and/
or 401(k) funds.
Zimmer Holdings Inc. President/
CEO David C. Dvorak, for example,
profited substantially from his compa-
ny’s 21.7 percent rise in stock price last
year, receiving a $30,000 boost to his
base pay, a $149,000 gain in his stock
holdings, and a $2.4 million increase to
his pension/other compensation.
Orthofix Holdings Inc. President/
CEO Bradley R. Mason and former Nu-
Vasive Board Chairman/CEO Alexis V.
Lukianov and reaped similar rewards
from their respective firms’ surging
stocks. Lukianov, who helped lead a to-
tal shareholder return of 46 percent last
year (a result achieved only by those in
the 93rd percentile of the S&P 500, the
company claims in a U.S. Securities and
Exchange Commission filing), earned an
additional $1.2 million in stock; Mason
was awarded a $157,923 base pay raise,
$1.3 million in additional stock and a
$616,383 increase to his pension/other
compensation in appreciation of the
firm’s 30 percent rise in stock price (from
$23.11 to $30.06).
Corporate capital, however, can be a
double-edged sword. When it falls, share-
holder support tumbles with it. Case in
point: Hologic Inc. stock slipped 4.2 per-
cent in fiscal 2013 (ended Sept. 28, 2013)
amid slumping profits and multiple man-
agement changes. As a result, only 34 per-
cent of investors supported the diagnostic
giant’s executive compensation plan in
fiscal 2014. (Regardless, President/CEO
Stephen P. MacMillan earned $24.4 mil-
lion, more than half of which he received
in stock.)
“This was an obvious signal that
there were significant stockholder
concerns we needed to address,” Ho-
logic’s 2015 proxy statement read. “In
response to stockholder feedback we
introduced performance stock units tied
to ROIC [return on invested capital] as
a significant component of fiscal 2014
long-term equity awards...Understand-
ably, however, the biggest concern we
heard was about our approach to suc-
cession planning during a time of un-
precedented change in leadership and
disappointing company performance.
Accordingly, getting our leadership
structure right was a key focus during
fiscal 2014. There was nothing more im-
portant than stabilizing a new team as
quickly as possible.” v

Global Solutions to Bringing Salaries Back to Earth
T
here apparently are limits to human opulence, even in
America. Incredibly, the nation that long flaunted its “big-
ger is better” tenet with mile-high skyscrapers, gas-guzzling
SUVs, McMansions, megamalls and giant superstores may finally
have reached its limit.
The tipping point? CEO salaries.
Historically, executive pay was never a big concern in the Land
of Opportunity, having risen steadily and mostly inconspicuously for
nearly three decades to help the top 1 percent and 0.1 percent of all
U.S. households double their income shares through 2007. Then the
Great Recession struck, and CEOs—especially those in the financial
industry—became Public Enemy No. 1 for the big bonuses and ex-
orbitant salaries they collected in the wake of their failings (former
A.I.G. Financial Products executive Joseph Cassano, for instance,
pocketed a $34 million bonus in 2008 despite costing the insurance
giant $99 billion).
Such handsome rewards for the leaders of taxpayer-funded bail-
outs like A.I.G., Citigroup Inc., Bank of America Corporation and
JPMorgan Chase spawned public outrage as well as a groundswell
of political support for financial reform. Congress appeased the an-
gry masses (and itself) in 2010 with the Dodd-Frank Act, a sweeping
set of laws designed to better regulate the U.S. financial industry.
Among the Dodd-Frank bill’s numerous provisos is a“say-on-
pay” clause that requires public companies to put their executive
pay practices to a non-binding shareholder vote at least once
every three years. Another provision—yet to be implemented—
commands corporations disclose the salary ratio between their
CEOs and their employees. Neither one, however, has had much
effect on executive pay: Salaries jumped 9.1 percent in 2014 to a
nine-year high of $22.6 million, and the average S&P 500 CEO-
to-worker ratio swelled to 373:1, up from 331:1 in 2013, AFL-CIO
statistics show.
“Today’s CEO-to-worker pay ratios are simply unconscionable,”
the AFL-CIO said in the latest installment of its compensation re-
port, Executive Paywatch.“America is supposed to be the land of op-
portunity, a country where hard work and playing by the rules would
provide working families a middle-class standard of living. But in
recent decades, corporate CEOs have been taking a greater share of
the economic pie while workers’ wages have stagnated.”
The gluttony, though, is not confined to the United States. Pie
lovers exist on nearly every continent, with Australians and Euro-
peans among the most hungry (Americans, naturally, still have the
biggest appetites). Germany, Spain and France boast some of the
highest CEO-to-worker pay ratios in the European Union (147:1,
128:1 and 104:1, respectively), while Australian chief executives earn
93 times the average worker’s salary. In the United Kingdom, the
earnings gap—estimated at 84:1—is wider than at any point since
Queen Victoria’s rule (1837-1901), according to a British commis-
sion’s findings.
July/August 2015 odtmag.com ODT • 19
Financial News
Attempts to narrow that chasm have fallen short, prompting
legislative reform throughout the European Union and Austra-
lia. Laws regulating executive pay gradually are gaining traction
and support for both the visibility they afford the general public
and the enhanced powers they give to shareholders, whose tra-
ditional non-binding votes have done little—if anything—to curb
runaway salaries over the last half-decade. Employment analysts
believe government mandates may be the best way to level the
CEO-worker playing field, although they have yet to catch on in
the United States.
“Politicians need to do more to stand up to big business and the
super-rich,”Deborah Hargreaves, director of the British independent
think tank High Pay Centre, told a London-based business daily
earlier this year.“We must also give workers the power to force em-
ployers to share pay more fairly throughout their organization.”
U.K. workers have had that power for more than 18 months now.
New laws implemented in the fall of 2013 require British companies
to publish exit payments for directors who are fired or resign as well
as the salary totals of all top directors. More importantly, however,
the legislation gives shareholders a binding vote on executive pay
schemes, and mandates the packages be approved by more than 50
percent of investors. Companies that fail to muster enough share-
holder support must abide by its last approved salary plan. Approved
compensation packages are valid for three years.
The rules are tougher in Switzerland, where publicly traded
firms also are beholden to investors but additionally are forbidden to
award golden handshakes, signing bonuses and golden parachutes
to top management. Violators face a three-year jail term and fines
equivalent to six years of pay.
Executives, though, can still earn big bucks. Swiss voters rejected
a proposal in November 2013 to cap administrative salaries at 12
times the amount of the lowest-paid employee, thus ensuring the
CEOs of Swiss-based multinationals such as Novartis AG, UBS AG
and Glencore plc continue to make more in a month than most
workers earn in a year.
Emboldened by the legislative victories in Britain and Switzer-
land, the European Commission now is considering increasing
shareholder power throughout the continent. If adopted, all remu-
neration policies by E.U.-listed companies will be subject to binding
investor votes very three years.
Australia has perhaps been most empowering to shareholders
with its“two strikes”policy, implemented in July 2011.The law requires
company boards be “spilled” if 25 percent or more of a firm’s inves-
tors reject its remuneration plans at two consecutive annual meetings.
Once the second resolution is passed, all board directors (except the
managing director) must be re-elected to their positions within a 90-
day timespan. Experts contend the legislation—among the world’s
strictest—has helped shareholders find their voices and effectively
fight for salary equity. — M.B.
Washington Roundup
Senate Bill Aims to Speed Up
FDA’s Medical Device Review Process
U
.S. Sens. Richard Burr (R-N.C.)
and Al Franken (D-Minn.) have
introduced bipartisan legislation
designed to expedite the medical device
approval process.
According to a news release from
Burr’s office, the FDA Device Account-
ability Act (The Device Act) seeks a more
consistent and meaningful application of
the “least burdensome” principles speci-
fied in the FDA Modernization Act of 1997
(FDAMA), enabling device manufacturers
to bring their innovative and life-saving
products to patients more quickly.
The release claims the FDAMA did
not change the statutory requirements for
the U.S. Food and Drug Administration’s
(FDA) medical device review and approval
standards, but only required the process
be conducted in the “least burdensome”
manner, which the Device Act seeks to
ensure by:
• Requiring the secretary of Health
and Human Services to ensure that
FDA reviewers receive training on
the intent and application of the
least burdensome requirements;
• Requiring an audit by the FDA
ombudsman, as well as an assess-
ment of the measurement used to
track implementation of the least
burdensome requirements;
• Requiring FDA reviewers to
consider the least burdensome ap-
propriate means necessary for dem-
onstrating a reasonable assurance
of safety and effectiveness when
requesting additional information
from manufacturers during the
premarket approval process; and
• Requiring the FDA to disclose how
it considered and applied the least
burdensome requirements in its
rationale for significant decisions.
20 • ODT odtmag.com July/August 2015
The Device Act also will allow spon-
sors of device trials to seek approval using
either a local or a centralized institutional
review board (IRB), much like the FDA al-
lows for drug clinical trials. Specifically, the
act calls for the use of centralized IRBs to
hasten multi-center clinical trials, as these
studies have been noted to bog down the
current approval process.
“America is a global leader in medi-
cal research, development, and inno-
vation,” Burr said in prepared remarks.  voted in June to repeal the tax, and U.S.
“Ensuring that safe medical devices are
developed and reviewed quickly will
help get them to patients faster, which
will improve and save lives. This legisla-
tion will also help cut down on the total
time it takes for patients to benefit from
approved medical devices by permitting
more efficient clinical trials.”
The legislation also requires the FDA
update its guidance on waiving Clinical
Laboratory Improvements Act (CLIA) re-
quirements. Specifically, guidance should
indicate that point-of-care diagnostic
tests that perform the “same in the hands
of untrained users as… in the hands of
laboratory professionals” may be admin-
istered in CLIA-waived labs (e.g., a doc-
tor’s office).
The Advanced Medical Technology
Association (AdvaMed) issued a formal
statement praising the filing of the new
Senate bill: “AdvaMed commends Sens.
Richard Burr and Al Franken for intro-
ducing the FDA Device Accountability
Act, which will make improvements to
FDA’s medical technology review pro-
cess and help ensure more timely pa-
tient access to the latest medical inno-
vations. Taken together, these reforms
will greatly improve the efficiency of
FDA’s medical technology review pro-
cess and eliminate redundant regulatory
obstacles that impact the timeliness of
American patients’ access to life-saving
and life-enhancing innovations.”
Can Device Tax Repeal Pass in
the Senate? Republicans Say
They’ve Got the Votes
Congressional Republicans see a repeal
of a 2.3 percent tax on medical devices
as their best opportunity to chip away at
the Affordable Care Act after the U.S. Su-
preme Court’s decision earlier this sum-
mer turning away a challenge to a key
component of the law.
The U.S. House of Representatives
Senate Republicans now are weighing
the best timing for a vote to undo the
levy, which helps underwrite the health-
care law. Legislators believe they may
be close to securing the necessary votes
to override a presidential veto, or insist
the tax be rolled back as part of a grand
bargain on spending bills later this year.
Senate Majority Leader Mitch McCon-
nell (R-Ken.) took the first procedural
step toward bringing a repeal to the floor
after the House voted overwhelmingly to
quash the levy.
“That House vote was a big deal,” said
Sen. Pat Toomey (R-Pa.), who is leading
the repeal effort in the Senate.
Many in the device industry have been
fighting to overturn the 2.3 percent tax
since it was conceived as part of Presi-
dent Obama’s Affordable Care Act (ACA),
claiming it stifles the industry’s ability to
create new jobs and fund innovation.
The Washington Times published a scath-
ing editorial in early July, which referred to
the ACA as “Obama’s scheme” and called
the U.S.  Supreme Court’s decision to up-
hold the ACA a “little artful abuse of the
language.” The editorial claims the device
tax takes a bite out of gross sales, rather
than profits, and it risks shutting down
companies that are operating in the red.
Citing the Advanced Medical Technology
Association (AdvaMed), the piece claims
the tax has killed 14,000 jobs and blocked
the creation of nearly 19,000 positions.

Its proponents argue the tax is a fair
fee for medical device manufacturers
that have seen their markets expand
as more Americans have signed up for
health coverage. Other industries, such
as the pharmaceutical industry, made
financial concessions to help augment
health benefits, Jon Kingsdale, former
executive director of the Massachusetts
health exchange and now a director
at Wakely Consulting Group in Bos-
ton, told The Wall Street Journal (WSJ).
“Medical device companies were pretty
much the only major group that re-
fused,” he said.
Senator Amy Klobuchar is from
Minnesota, home of two of the big-
gest names in the U.S. device indus-
try—Medtronic plc and St. Jude Medical
Inc.—and is one of five Democrats to co-
sponsor the Senate bill to repeal the tax.
Klobuchar told the WSJ, “This is a tax on
manufacturing and I’ve always been in
favor of eliminating it.”
Though the $30 billion the tax would
collect over the next 10 years is a small part
of the ACA’s expanded coverage, many are
concerned there is no plan to replace the
funds, and some allege the repeal is just an
attempt to chip away at the ACA.
While many Democrats could sup-
port the repeal in theory, the WSJ asserts
they will be unlikely to do so unless the
ACA’s funds can be replaced from another
source. To overcome a filibuster, 60 sena-
tors must support bringing the bill to the
floor for a vote.
Sen. Elizabeth Warren (D-Mass.), who
voted to undo the levy in 2013, will only
back the present repeal measure if there is
a funding offset, a spokeswoman for her
office said.
It is unlikely there will be one. Sen. Or-
rin Hatch (R-Utah), chairman of the Sen-
ate Finance Committee, said, “It’s pretty
hard to come up with a $30 billion offset.”
The Obama administration has said
the tax is a key component of funding
and not an undue burden on the industry.
U.S. Health and Human Services Secre-
tary Sylvia Burwell said the administra-
tion would insist that any changes to the
health law improve the economy, among
July /August 2015 odtmag.com ODT • 21
several standards. Repealing the tax could
widen the deficit, she warned.
Kingsdale agreed, saying a repeal
could lead to the unwinding of other
financing mechanisms. “It would be the
first major chink in the armor of the
ACA being scored as deficit reduction,”
he said.
Medical Device Safety Part of
21st Century Cures Act Passed
by House of Representatives
As part of the 21st Century Cures bill that
passed the U.S. House of Representatives on
July 10, the legislation included a provision
to improve the safety monitoring of medi-
cal devices. The house passed the act by a
344-77 vote.
The 21st Century Cures Act con-
tained multiple health IT-related provi-
sions, particularly in the areas of U.S.
Food and Drug Administration (FDA)
regulation, telehealth, and interoper-
ability. It also would boost federal fund-
ing for medical research and changes
drug approvals.
The medical device amendment from
Rep. Mike Fitzpatrick, (R-Pa.) was in-
spired by controversial gynecological
devices called power morcellators, which
were used in thousands of minimally in-
vasive procedures a year—mostly hys-
terectomies—to cut up benign uterine
fibroids. Last year, however, the FDA
warned that women undergoing the
procedure have an estimated 1 in 350
chance of harboring a dangerous hid-
den cancer that power morcellators can
spread and worsen. Johnson & Johnson,
which was the largest manufacturer of
the device, pulled its product off the
market a year ago. Most hospitals have
halted or limited use of morcellators.
Morcellators made by other companies
remain on the market.
Fitzpatrick’s amendment calls for
unique device identifiers to be included in
electronic health records.
“Unfortunately, it is becoming clear
that the reporting system for faulty
and deadly devices is broken,” Fitzpat-
rick said in the Congressional Record.
“What happened with the power mor-
Washington Roundup
cellator should never be allowed to
happen again.”
Supporters of the bill say informa-
tion such as the make or model number
of devices used in treatment should be
included in medical records so patient
harm can be closely tracked. Currently,
the identifiers are not incorporated into
all electronic health records, “which
makes it difficult to fully achieve the
benefits to patient safety,” Fitzpatrick’s
office said in a formal statement.
There is no parallel bill in the U.S.
Senate, but Sen. Lamar Alexander (R-
Tenn.), chairman of the Senate’s health,
education and labor committee, has said
he hopes to get a measure through his
panel by year-end and bring it to the
Senate floor for a vote next year. It is
uncertain whether it would contain simi-
lar language.
The FDA issued a rule in 2013 requiring
all medical device labels to include unique
device identifiers and said it would phase
in the system over several years, focusing
first on high-risk products. Fitzpatrick’s
office said his action “adds pressure.”
Fitzpatrick has used the morcellator
issue to open a larger debate about how
devices are regulated and tracked. Sev-
eral other amendments offered by Fitz-
patrick and prompted by the morcellator
issue didn’t make it through the rules
committee. One amendment would
have directed the Government Account-
ability Office to investigate FDA medical
device safety reporting regulations, “fo-
cusing on reporting problems involving
power morcellators.”
A voice of opposition was rules com-
mittee member Rep. Michael Burgess,
a Texas Republican and a doctor who
formerly practiced obstetrics and gyne-
cology. Burgess, who said he left active
practice more than 10 years ago and
didn’t use power morcellators, argued
that doctors, rather than regulations,
were to blame for problems resulting
from the device, according to The Wall
Street Journal.
“In this instance, I think that it was
clinical judgment that was at fault, not
the FDA approval process,” he said. v
Risk Management
How to Bulletproof Your Firm from
Expensive Employment Liability Risks
Kevin M. Quinley
22 • ODT odtmag.com July/August 2015
A
grandmotherly figure with white
hair peers benignly over her read-
ing glasses in a magazine ad. The
caption: “Her smile seemed to light up the
office.” The ad’s small print reveals that
“granny” cost her employer $425,000 due
to an age discrimination suit, citing the
need for financial protection in the form of
employment practices liability insurance.
Medical device and life-science firms—
much like many other businesses—face
employment practices liability from a host
of situations. These include allegations of
not just age discrimination, but also gender
discrimination, sexual harassment, wrong-
ful termination, hostile work environment
or violating fair labor practices. Despite in-
creased automation of manufacturing pro-
cesses, the medical device and life-science
industry is labor-intensive. Whenever you
have employees, a company risks employ-
ment practices liability claims and lawsuits.
Prime sources of such claims are layoffs
and terminations.
Life-science firms are vulnerable to lay-
offs, employee terminations or employee
complaints. A myriad of factors drive and
accentuate this trend. Sometimes, employ-
ee performance—or lack thereof—is an is-
sue. Other, larger financial factors dictate
cost-cutting and reducing headcount. Eco-
nomic downturns and recessions slow de-
mand. Long waits for U.S. Food and Drug
Administration approvals diminish output.
Many pharma firms face “patent cliffs,”
where blockbuster drugs will soon lose
their patent exclusivity, lowering demand
for branded drugs. Increasingly, sales reps
have difficulty getting to doctors, reducing
the need for field sales personnel. Global
competition is another factor. Bottom line:
Layoffs are unfortunate but often finan-
cially necessary steps for life-science firms.
Sources of Claims and Risk
Bungling these situations can create needless
and expensive risks for a device company.
These include:
• Wrongful termination claims
and lawsuits from those who feel
they were unjustly let go. Even
groundless claims consume hours
and thousands of dollars in legal
defense fees;
• Spike in workers compensation
claims from employees who allege
they were hurt on the job, seeking
workers compensation benefits to
replace lost wages;
• Cost of unemployment benefits;
• Lowered morale on the part of
the “remaining” workers if they
feel those laid off were dealt with
unfairly. Even if such a perception
does not exist, the “lucky” survivors
may have low morale as workloads
increase with fewer resources and
no comparable pay jump; and
• Negative public relations and a
tainted public image spurred by
“malcontents” who claim they were
treated unfairly.
While layoffs and terminations are un-
pleasant but often necessary realities for
life-science firms, there are ways to handle
these steps to minimize employment liabil-
ity risks. Fortunately, life-science profes-
sionals can manage this risk just like any
other. Let’s look at tools and strategies for
life-science leaders to consider when man-
aging the risks of layoffs and terminations.
Many insurance companies offer coverage
for employment practices liability. Exam-
ples are Monitor Liability Managers, Chubb
and XL Catlin. (Caveat: These are examples,
not rankings or recommendations.)
Work with your insurance agent or bro-
ker to identify promising candidates from
whom to obtain coverage quotes. Prepare
for the process by anticipating the ques-
tions that insurance companies will pose.
Life-science firms that show the greatest
readiness to provide cogent answers to

these questions and demonstrate strong
internal risk management procedures
have the leverage to get the broadest cov-
erage at the lowest cost.
Anticipate Insurer Questions
Questions that an insurance company asks
on its coverage application reveal areas it
views as risky. They also offer a road map
for the company’s risk management pro-
gram addressing employment practices.
Expect to face questions like the fol-
lowing in an insurance application:
• Do you plan a merger, acquisi-
tion or consolidation for you or
any subsidiaries? Comment: Such
corporate maneuvers often spawn
layoffs for the sake of “synergies”
and efficiencies. A strong business
rationale may exist for layoffs, but
an expected result will be claims
and suits from wrongful termina-
tion or discrimination.
• Are you undergoing or contem-
plating employee layoffs or early
retirements in the next 12 months,
including those resulting from
company restructuring or office or
manufacturing plant closings?
• What is the total number of em-
ployees, broken down amongst
full-time, part-time, seasonal,
temporary, leased, domestic within
the United States, and foreign?
Comment: Employment claims
are more common in the United
States, so the mix of foreign versus
domestic labor force is a risk factor.
• What percentage of employees
are union versus nonunion? Tip:
Insurers correlate a unionized
workforce with a higher risk of
claims and litigation.
 • What percentage of employees are
in Texas or California? Caution:
These states are perceived as “hot
houses” for employment practices
claims due to laws congenial to
such actions.
• Is the device firm or any of its
subsidiaries subject to a collective
bargaining agreement? If so, how
many employees are subject to
July/August 2015 odtmag.com ODT • 23
the agreement and when does the
agreement expire? Moral: Collective
bargaining agreements can fore-
shadow aggrieved employees filing
employment practice claims or suits.
• Do any employees have writ-
ten employment contracts? If so,
how many? Suggestion: Contracts
may be a good idea, but they risk
breach-of-contract suits if relation-
ships sour.
• In the past three years, what
has been the annual percentage
turnover rate of employees, both
domestic and foreign? Takeaway:
Many see turnover rate as a ba-
rometer portending employment
liability claims.
• What percentage of employees
have salaries larger than $50,000,
$500,000, $200,000 or above? Tip:
The higher the pay scale, the higher
the stakes in employment litigation.
With answers to such questions pre-
pared, medical device and life-science
firms can craft strong internal programs to
minimize the risk of employment practice
liability and claims.
Risk Management Strategies
First, maintain an updated/amended hu-
man resources manual or equivalent risk
management guidelines addressing:
• Legally prohibited discrimination;
• Sexual harassment;
• Compliance with the Americans
with Disabilities Act;
• Compliance with the 1991 Civil
Rights Act;
• Compliance with the Family Medi-
cal Leave Act;
• Employee disciplinary procedures;
• Employee appraisals/reviews; and
• Terminations, layoffs and
early retirement.
Insurers writing this coverage want to
make sure the company has its house in
order and represents a safe risk. None of
these features guarantees that a medical
firm will not have a claim, but they reflect
a systematic human resource approach
Risk Management
that may minimize headaches.
Second, update all management, su-
pervisory employees and nonsupervisory
employees on amendments to the compa-
ny’s human resources manual or written
guidelines. Have employees acknowledge
in writing that they received such manuals
or guidelines.
Third, establish a toll-free number
for reporting allegations of and claimant
practices violations. Some insurers may
offer to provide one or help offset the cost.
Fourth, consider hiring a full-time risk
manager, human resources manager and
general counsel. Tip: insurers like to see
seasoned, full-time risk managers, human
resource specialists and general counsel at
the helm.
Fifth, prepare essential documents and
have them ready, since insurers often re-
quest the following materials as part of the
underwriting process:
• Latest annual report or audited
financial statement;
• Employee handbook;
• Human resources manual/guidelines;
• Procedures regarding job appli-
cants, employee discipline, termi-
nation, harassment or discrimina-
tion allegations; and
• Latest EEO-1 report (a government
form requiring many employers to
provide a count of their employees
by job category and then by ethnic-
ity, race and gender).
Which strategy is better—buying in-
surance or implementing risk manage-
ment? It’s not an either/or choice. Life-
science firms capturing the best coverage
deals blend management practices with
savvy shopping strategies in the insurance
marketplace. Companies that combine
these two approaches will have nothing to
fear from a vindictive grandmotherly em-
ployee or from business-driven reductions
in force. v
Kevin M. Quinley, CPCU, ARM, is the
principal of Quinley Risk Associates LLC,
a risk management consulting firm. He can
be reached at kevin@kevinquinley.com or at
(804) 796-1939.
New Technology Update
ChoiceSpine Launches Blackbird Posterior Cervical System in U.S.
C
hoiceSpine, a Knoxville, Tenn.-
based spinal implant company, has
launched its Blackbird posterior
cervical system in the United States. The
system was designed by a surgeon panel
with the goal of improving upon current
designs available in the market, simplify-
ing instrumentation and improving pa-
tient outcomes.
“After over 150 successful surgeries, we
are excited to announce the commercial
launch of our Blackbird posterior cervi-
cal system,” said Steve Ainsworth, Ph.D.,
ChoiceSpine’s vice president of research
and development. “The Blackbird poste-
rior cervical system is the result of hard
work between our internal team, distribu-
tion partners and physician partners.”
“Blackbird extends the portfolio of
products we offer,” said Anderson Collins,
director of business development. “This
system and what we have in the product
pipeline will continue to fuel the double-
digit growth we have experienced over the
past few years.”
The company received U.S. Food and
Drug Administration 510(k) clearance for
the system more than a year ago.
Blackbird is a comprehensive system for
posterior fixation of the cervical and upper
thoracic spine.  It offers a variety of screws,
hooks and rods that can accommodate any
surgeon’s needs, company officials claim.
Blackbird is the first of three commercial
product launches the privately held Choic-
eSpine plans in 2015.
The Blackbird posterior cervical system.
Image courtesy of ChoiceSpine.
24 • ODT odtmag.com July/August 2015
FDA Clears EVOS System
From Cutting Edge Spine
The U.S. Food and Drug Administration
(FDA) has cleared Cutting Edge Spine’s
EVOS system, an array of interbody im-
plants manufactured in Peek-Optima Nat-
ural and Peek-Optima HA Enhanced, both
offered by Invibio Biomaterial Solutions.
“With the approval of the EVOS sys-
tem, we are proud to be first-to-market in
the U.S. with an HA enhanced Peek Lum-
bar Interbody system,” said Randy Roof,
Cutting Edge president and co-founder.
“Invibio’s Peek-Optima HA Enhanced
has been compounded with hydroxyapa-
tite (HA), an osteoconductive material, to
enhance bone apposition. The integration
of two proven Invibio biomaterials com-
bined with cutting-edge designs and the
largest range of footprints in the market
is truly a game changer. Our partnership
with Invibio made it possible, and was key
to obtaining FDA clearance. We look for-
ward to the impact that the EVOS system
will have on fusion rates, and ultimately,
patient care.”
Peek-Optima HA Enhanced shares all
of the material properties that originally
made PEEK-Optima Natural an ideal ma-
terial for spinal interbody fusion devices,
including a modulus similar to that of
cortical bone and radiolucency, allowing
visualization of the fusion mass, accord-
ing to a Cutting Edge Spine news release.
Hydroxyapatite is fully integrated into the
PEEK-Optima Natural Grade, provid-
ing a complete homogeneous compound
that ensures HA is present on all surfaces
of a device.
“Supporting Cutting Edge Spine in ev-
ery phase of the development of the new
EVOS system now entering the U.S. mar-
ket allowed us to contribute to a solution
that we believe will have positive impact
on the quality of life of patients with clini-
cal conditions,” said John Devine, Ph.D.,
director of Invibio Biomaterial Solutions.
Invibio´s Peek-Optima HA Enhanced
polymer has demonstrated its perfor-
mance in pre-clinical studies, with supe-
rior new bone formation and quality of
new bone bridging compared with PEEK-
Optima Natural at early time points.1 A
further study that evaluated the bone on-
growth of the two implantable polymers
in a bone defect model in sheep revealed
that PEEK-Optima HA Enhanced resulted
in approximately 75 percent direct bone
apposition as early as four weeks follow-
ing implantation.2
“Our goal is to provide today’s market
with tomorrow’s technology,” said John
Souza Sr., director of Research and Devel-
opment at Cutting Edge Spine. “To that ef-
fect, we have taken a no-excuse approach,
providing surgeons with 3,714 lumbar im-
plant options, and hospitals with single use,
bar coded, and pre-sterilized packaging.”
Cutting Edge Spine currently is in
the process of commercializing the new
technology and establishing distribution
throughout the United States.
Founded in 2009, Cutting Edge Spine
develops and distributes spinal technolo-
gies. The privately owned company is
headquartered in Waxhaw, N.C.
References:
1. Study evaluated the in-vivo response in
a cervical spine fusion model in sheep. Study
did not use Cutting Edge Spine products.
Data on file at Invibio. This has not been cor-
related with human clinical experience.
2. Study evaluated bone ongrowth in a
bone defect model in sheep. Study did not use
Cutting Edge Spine products. Data on file at
Invibio. This has not been correlated with hu-
man clinical experience.
Medtronic Debuts
New Spinal System
Medtronic plc’s spine division launched
the CD Horizon Solera Voyager spinal sys-
tem for minimally invasive procedures.

The technology now is available in
countries around the world. The system
expands upon the transforaminal lumbar
interbody fusion procedure by offering
multiple, minimally invasive rod insertion
options and enabling a seamless 3-D-nav-
igated surgical experience. The announce-
ment was made during the 22nd annual
international Meeting on Advanced Spine
Techniques in Kuala Lumpur, Malaysia.
According to the company, with the
The CD Horizon Solera Voyager spinal
system for minimally invasive procedures.
Image courtesy of Medtronic
CD Horizon Solera Voyager, surgeons
have the flexibility to use either a percu-
taneous or Wiltse minimally invasive ap-
proach for rod insertion depending upon
their preference. The system also features
a low-profile, extended-tab screw with
inner threading, which eases rod inser-
tion and facilitates rod reduction. In ad-
dition, the system is part of Medtronic`s
Surgical Synergy spinal platform—the
most integrated portfolio of navigated
surgical technologies—which seeks to
minimize the operating room from inter-
ruption and constraints and gives sur-
geons the freedom to focus wholly on
their patients.
“Medtronic is known for our life-
changing innovations and groundbreak-
ing technologies. That legacy—along with
our broad portfolio and collaborative part-
nerships—enables us to truly make an
impact on patient care,” said Doug King,
president of the Spinal business and se-
nior vice president at Medtronic. This
system represents our commitment to
take minimally invasive techniques and
3-D-navigated surgery even further and
develop solutions with clinical and eco-
nomic value.”
Medtronic’s Spinal business is based in
Memphis, Tenn., and offers therapies for
July/August 2015 odtmag.com ODT • 25
New Technology Update
spinal, neurological, orthopedic and oral
maxillofacial conditions.  melt technology. The cage displays a po-
Medtronic plc is headquartered in
Dublin, Ireland.
Rivanna Medical Gets FDA OK
for Ultrasound Device to Guide
Spinal Anesthesia
Charlottesville, Va.-based Rivanna Medi-
cal LLC has earned U.S. Food and Drug
Administration 510(k) clearance for Ac-
curo, a handheld and untethered smart
phone-sized ultrasound device designed
to guide spinal anesthesia with automat-
ed 3-D navigation technology in addi-
tion to ultrasound imaging of abdominal,
musculoskeletal, cardiac and peripheral
vascular anatomies.
According to the company, the Accuro
platform is designed to provide automat-
ed navigation to an anatomical target so
a clinician may avoid guesswork when
finding the target. The initial commer-
cial application of Rivanna’s Accuro plat-
form is designed for guiding clinicians to
a first-attempt success in administering
spinal anesthesia.
“There are multiple clinical uses for
Accuro, a disruptive, game-changing de-
vice platform technology,” said John A.
Williams, president and CEO of Rivanna
Medical. “The Accuro platform, which is
based on automated superior imaging
technology, has an addressable $1 billion
U.S. market today. Because of the consid-
erable unmet clinical need for automated
image guidance in general, and in the spi-
nal anesthesia market especially, we are
looking forward to launching Accuro at
the upcoming annual scientific meeting of
the American Society of Anesthesiologist
in San Diego in just three months.”
Joimax Gets FDA Clearance for
Endoscopic Lumbar Interbody
Fusion Implant
German company Joimax, which makes
minimally invasive technology for endo-
scopic spinal surgery, has earned 510(k)
U.S. Food and Drug Administration clear-
ance for its EndoLIF (endoscopic lumbar
interbody fusion) on-cage implant.
The EndoLIF on-cage consists of tita-
nium alloy produced with electron beam
rous surface with a diamond cell structure
providing a base for cell proliferation and
bone growth. Two large openings, which
may be filled with autogenous bone, are
meant to support the creation of a straight
column for fusion.
The EndoLIF implant allows sur-
geons to use an inter-muscular approach,
similar to a mini transforaminal lumbar
interbody fusion, into the intervertebral
disc, enabling endoscopic-assisted fu-
sion. Ralf Wagner, M.D., of the Ligamenta
Spine Center in Frankfurt, Germany, and
Bernd Illerhaus, M.D., of Orthopädisch-
Neurochirurgisches Zentrum in Datteln/
Recklinghausen, Germany, two German
spine specialists, have performed more
than 200 out of 600 EndoLIF procedures
in Europe.
“The access is dura and nerve-gentle,
preserves the dorsal bony structures and
we can avoid scar tissue because of the
stepwise tissue dilation,” said Illerhaus.
The EndoLIF on-cage is designed to be
used with supplemental posterior fixation,
such as Joimax’s Percusys percutaneous
pedicle screw-rod system. Cage implan-
tation can be performed with a posterior
or postero-lateral approach, either using
an open or endoscopic-assisted method,
company officials report.
The EndoLIF on-cage implant.
Image courtesy of Joimax.
“With the EndoLIF program, Joimax
offers a complete endoscopic-assisted so-
lution for spinal stabilization and fusion.
In the future, we will be able to treat pa-
tients with even more gentle techniques,”
said Wolfgang Ries, CEO and founder of
Joimax. “Our next development will be an
EndoLIF cage on the basis of our Ilessys
Delta system for posterior lumbar inter-
body fusion.” v
Design Viewpoint
Virtual Population Analysis Improves Orthopedic Implant Design
Sjoerd Kolk and Mike Lawrenchuk • Contributing Writers

T
he orthopedic industry is seeking
new methods to drive innovation
as greater attention is given to
improving patient outcomes and con-
trolling healthcare costs. One method
that has been embraced by many com-
panies over the past few years is the use
of population analysis based on com-
puted tomography (CT) or magnetic
resonance imaging (MRI) to determine
new implant shapes and sizes.1 This
technology promises to reduce design
iterations, the number of cadaver labs
and the risks associated with design er-
rors. Population analysis also can be a
powerful argument in convincing regu-
latory bodies, hospital management and
surgeons of the thorough sizing ratio-
nale and good performance of a new
implant system.
This column examines how the DJO
Surgical division of orthopedic device
company DJO Global Inc. and medical

ADaM models represent the sample population of femurs as population-representative discrete geom-
etries. The femur in the middle represents the population average, with the -1 and +1 standard devia-
tion models of the first mode of variation on the left and right, respectively. Image courtesy of DJO.

image processing specialist Materialise TaperFill stem using traditional ana-

DJO’s TaperFill hip step. Photo courtesy of DJO.
N.V. partnered to bring the power of
image-based population modeling into
the development of DJO’s new TaperFill
hip stem.
The project goal was to produce a
stem optimized for use with the di-
rect anterior (DAA) surgical approach,
a relatively new minimally invasive
technique designed to spare the critical
posterior soft tissue. To accommodate
the reduced stem length needed during
DAA, the design required the proximal
body to be highly congruent with the
dense cortical bone, to ensure the ini-
tial stability needed to achieve bone in-
growth into the new P-squared coating.
Initial attempts to design the required
highly congruent proximal body for the
tomic information were difficult. Each
member of the design team had his or
her own expectations of natural femoral
anatomy based on their individual expe-
riences and a few plastic representative
models. These individual expectations
of the femur anatomy could neither be
quantified nor shared among the design
team, hampering the cooperative en-
gineering of the implant geometry. For
instance, it wasn’t until physical parts
were produced and tried that one prom-
ising design had to be discarded due to
a potential for over-sizing in smaller
bones that could lead to fracturing of
the femur during its insertion.
The DJO design team decided to
collaborate with Materialise, which de-

26 • ODT odtmag.com July/August 2015

Quality

Risk

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Design Viewpoint

Using the model femurs, standardized cross sections were located and then used to design
and verify the optimal shape for the TaperFill hip stem proximal body. Image courtesy of DJO.

veloped ADaM technology—an image-
based population analysis method.2 In
the project for DJO, Materialise used
its expertise in segmentation and sta-
tistical population analysis to combine
3-D geometrical bone shapes from a
database of male and female femur CT
scans into an average 3-D shape of the
entire femur. This average shape con-
tains features, trends and population-
specific shape information that best
represent those of the entire popula-
tion, thereby forming a good starting
point for virtually assessing the fit of an
implant design.
Besides the average femur, varia-
tion models also were created to reflect
the 3-D geometry of typical larger and
smaller patients. These variation models
are not just larger or smaller versions of
the average model; they are able to cap-
ture how other aspects (e.g., offset and
neck angle) change together with size
as well.
“In traditional population analysis,
the designer may have to a priori choose
a few discrete parameters to measure
from the available anatomical data sets,
often ignoring a significant amount of
the rich geometric data available,” said
Bryan Kirking, engineer at DJO. “Now
that we use the evidence brought by
this new technology in our design pro-
cess, we feel much more confident that
we are doing everything we can to op-
timize implant geometry to the natural
anatomy. We are also able to reduce the
number of design iterations and ca-
daver labs, thereby saving the company
significant costs.”
The team proceeded with virtually
fitting their concept design into the
femur models, with the aim of better
understanding the interaction of bone
and implant at key anatomical land-
marks. After importing the femur mod-
els into their computer-aided design
(CAD) software, cross sections were
produced at standardized locations
and used as input to interactively drive
the best implant shape for maximizing
congruency and minimizing interfer-
ence. The results could be directly vi-
sualized, quantified and shared among
the design team. Moreover, surgeons
particularly liked the ability to directly
visualize the cut femur as seen during
surgery, which helped evaluate inser-
tion and positioning characteristics that
previously could only be evaluated at
later stages of the design process. Engi-
neers were pleased to be able to use the
femur models in the same CAD soft-
ware already being used to design the
implants and the ability to interactively
visualize design geometries against the
model femurs. The final TaperFill hip
stem shares the same medial-lateral ta-
pered profile of DJO’s Linear hip stem,
which has more than 17 years of clini-
cal success, and also, thanks to ADaM,
has an optimized congruency with the

28 • ODT odtmag.com July/August 2015


With increasing regulatory requirements, cost pressure and the need for evidence of
improved outcomes, it is encouraging that the advanced 3-D population-based statistical
techniques that sounded like a thing of the future only a few years ago now are being used
with efficacy and efficiency to help improve standard implant design.
cortical bone, is easier to insert with a
less-invasive anterior approach, and
provides feedback to the surgeon for
sizing and placement.
“Now that we have experienced the
power of this technology first hand, it
is like we have a hammer and every-
thing becomes a nail. We have used
this technology to improve projects
throughout our R&D (research and
development) department at DJO,”
said Kirking.
This illustrates how image-based
population modeling can be a powerful
tool for understanding and designing
for the 3-D anatomy and its variation
with size.
“This technology is valuable to any
orthopedic company interested in im-
proving patient care through better de-
signs,” said Sebastian De Boodt, product
manager at Materialise. “By obtaining a
much deeper understanding than ever
before of the 3-D anatomy and how it
varies between patients, engineers are
able to come up with designs that are
anatomically contoured, allowing them
to retain more of the patient’s bone,
potentially leading to better long-term
outcomes. Also, with more people in
emerging markets gaining access to
good healthcare, it allows to effective-
ly analyze anatomical differences be-
tween populations and to adapt new
medical devices accordingly, allowing
them to be used for a much broader
patient population.”
Using anatomical evidence in the de-
sign also helps companies reduce risks
and supports their marketing goals.
“We had situations where a customer
discovered design problems right before
product launch,” said De Boodt. “Us-
ing a population study, they were able
July/August 2015 odtmag.com ODT • 29
DJO’s TaperFill hip stem has a congruent prox-
imal body taper optimized using Materialise’s
femur models. Photo courtesy of DJO.
to quickly pinpoint the problem and
perform a redesign, minimizing the cost
of a delayed product launch—and more
importantly—creating a successful prod-
uct that satisfied their customer base. The
results of the study are now used in a
marketing white paper to explain their
sizing rationale.”
With increasing regulatory require-
ments, cost pressure and the need for
evidence of improved outcomes, it is
encouraging that the advanced 3-D
population-based statistical techniques
that sounded like a thing of the future
only a few years ago are now being used
with efficacy and efficiency to help im-
prove standard implant design. v
Design Viewpoint
References
1. Bischoff JE, Dai Y, Goodlett C, Davis
B, Bandi M, Incorporating population-level
variability in orthopedic biomechanical anal-
ysis: a review, Journal of Biomechanical Engi-
neering 136(2), 2014.
2. Engelborghs K, Kaimal V, Finding the
best fit, ODT May/June 2012.
Editor’s note: For more in-depth information
on DJO, see the Top Company report in this
issue, which begins on page 32.
Mike Lawrenchuk is a business devel-
opment manager at Materialise responsi-
ble for software and services in the North
American orthopedic industry. Mike has
nearly 10 years of experience in biomedical
applications based on medical image data
including patient-specific design, compu-
tational modeling, surgical planning, and
medical 3-D printing. His recent focus has
been on Materialise’s Anatomical Data
Mining (ADaM) technology and utilizing
databases of CT data to statistically model
anthropometric trends in bone morphology
between populations. Mike is a graduate of
the University of Michigan with a B.S.E.
and M.S.E. in biomedical engineering.
Sjoerd Kolk is an application engineer
at Materialise, as part of a team respon-
sible for the ongoing improvement of
Materialise’s software and services for
the orthopedic industry. He obtained his
M.Sc. in biomedical engineering from the
University of Twente, the Netherlands,
and performed Ph.D. research at the
Radboud University Medical Center, the
Netherlands. He has authored multiple
scientific papers on state-of-the-art image
analysis, the biomechanics of the muscu-
loskeletal system, and the functional out-
come of orthopedic interventions in the
lower limb.
Market Snapshot
Advances in MRI: Keeping Up Orthopedics’ Image
Maria Shepherd • Data Decision Group
N
ew advances in whole–body
magnetic resonance imaging
(MRI) technology have cre-
ated a powerful diagnostic tool for the
entire musculoskeletal system—for the
knee, spine and shoulder, in particular.
Whole-body MRI is a valuable tool that
allows non-invasive evaluation of the
spine and the spinal cord to evaluate in-
tervertebral discs, nerves, trauma to the
spine and ligaments. However, there are
implications for patient safety. A high lo-
cal specific absorption rate carries risk
of patient injury, as does large cumula-
Chart 1
30 • ODT odtmag.com July/August 2015
tive energy doses delivered during long
exam times. Patient comfort in long ex-
ams, as is the case with those typically
performed on the spine, also is an issue.
Why It’s Important
Like robotics, the average selling price
(ASP) for an MRI system is expensive. In
2010, the ASP for a whole body MRI sys-
tem was estimated at $1.2 million. Prices
are expected to decline as the market
becomes more competitive, declining to
an estimated $1.13 million in 2015. U.S.
healthcare reform is reported to be the
driver of a 20 percent to 25 percent de-
cline in reimbursement for MRI, affecting
providers, payers and patients that have
high-deductible plans.2 Even with this
strong emphasis on cost cutting, the most
recent data shows that the U.S. healthcare
system still generates the highest ASP.3
High-field and very-high-field
whole-body scanners lead the market,
supplied by major international com-
panies including GE Healthcare, Sie-
mens, Philips, Toshiba and Hitachi.
Very-high-field whole-body systems
provide additional applications previ-

Chart 2
Chart 3
ously unavailable and greatly improve
imaging resolution and quality. However,
very-high-field whole-body MRI systems
generally are large, costly to purchase and
expensive to install.
July/August 2015 odtmag.com ODT • 31
Technology Prevails
Many think that MRI has become the
preferred diagnostic method for im-
aging the central nervous system, in
detecting brain tumors, spine injuries,
Market Snapshot
vascular structures, and re-
gions of the brain affected
by stroke.5 The MRI industry
is driven by the demand to
provide high-quality service
to patients in a competitive
environment. High-volume
production of MRI magnets
has led to efficient magnet
designs. Still, there are many
opportunities for improve-
ment to enable this diagnostic
tool to be available to patients
around the world. v
References
1 .  M a r k e t s a n d M a r k e t s ,
2010 MRI Imaging
2. Ibid
3. www.itnonline.com/arti-
cle/advances-mri-market-tech-
nology-trend-analysis
4.  Op. cit. 1
5.  Op. cit. 3
Editor’s note: Readers are invit-
ed to submit their market data
and trend questions to Maria
Shepherd. Periodically, selected
questions will be presented in
this column along with answers
from Maria.
Maria Shepherd has 20 years of
leadership experience in medical
device/life-science marketing in
small startups and top-tier com-
panies. Following a career in-
cluding roles as vice president of
marketing for Oridion Medical
(a company acquired by Covi-
dien, which is now Medtronic),
director of marketing for Philips
Medical and senior manage-
ment roles at Boston Scientific
Inc., she founded Data Decision
Group. Shepherd recently was
appointed to the board of the
ALIGO Healthcare Investment Commit-
tee. She can be reached at (617) 548-9892,
mshepherd@ddecisiongroup.com, www.
ddecisiongroup.com, or followed on Twitter
@MedTechResearch. 
 C ONTRIBUTORS
EDITORIAL DIRECTOR, MEDICAL DEVICES: Christopher Delporte • MANAGING EDITOR: Michael Barbella
ASSOCIATE EDITOR: Ranica Arrowsmith

The Top 10 Mergers, acquisitions and new healthcare value chains

shape the industry’s largest players.

B
y now, the orthopedic device industry has had ample time to adjust to its “new normal.” Implant firms have had years, really,
to revamp their business models to jumpstart growth, but progress has been tortoise-like—hampered by lingering Affordable
Care Act uncertainty, new federal regulations, hospital consolidations, purchasing decision instability, fickle reimbursement rates
and demands for values-based solutions. Nevertheless, medtech manufacturers realize that future profits depend on their ability to
evolve with the market, and many have begun their metamorphoses, whether it be through acquisition (Medtronic-Covidien, Zimmer-
Biomet, Smith & Nephew-ArthroCare), partnerships (Novartis-Google[x]), restructuring or redefining innovation. As one healthcare
CEO noted, “Innovation is broader than delivering the next breakthrough product. It is about partnering with physicians, hospitals,
payers, patients and our communities to challenge conventional thinking and create medical solutions that save and improve millions
of lives worldwide—while reducing healthcare costs for all.”
The key to success, of course, lies in the industry’s ability to buck tradition—which historically, has been a virtual sacrilege among
implant manufacturers. But disruptive change is underway. Companies no longer will be able to earn premium margins by simply sell-
ing clinical features and new products into established market spaces. Rather, they will need to look at new segments and, particularly,
new end-to-end solutions to secure additional revenue and maintain margins, contends an A.T. Kearney report on forces currently
shaping the medical device industry.
“While the future contours of the medical device industry remain to be defined, radical change is inevitable, and the companies
who embrace it will both shape the industry and profit from it,” said Dave Powell, A.T. Kearney partner and study co-author.“Execu-
tives should urgently be evaluating the impact of disruptors and using this information to determine what capabilities and resources
they will need to build a distinctive business model that will enable them to compete in the future.”
Time is wasting.

Top 10 Orthopedic Device Companies

1. DePuy Synthes .......................$9.67 billion 6. Medtronic Spinal ....................$3.04 billion

1. Stryker ...................................$9.67 billion 7. DJO Global .............................$1.23 billion

3. Zimmer ..................................$4.67 billion 8. Integra LifeSciences ...............$928 million

4. Smith & Nephew .....................$4.62 billion 9. NuVasive ................................$762 million

5. Biomet ...................................$3.22 billion 10. Globus Medical .....................$474 million

32 • ODT odtmag.com July/August 2015


1. DePuy Synthes
(a division of Johnson & Johnson)
$9.67 Billion ($74.3B total)
KEY EXECUTIVES:
Alex Gorsky, Chairman & CEO
Dominic J. Caruso, VP, Finance & Chief Financial Officer
Stephen J. Cosgrove, Corporate Controller & Chief Accounting Officer
Michel Orsinger, Worldwide Chairman, Global Orthopaedics
Gary J. Pruden, Worldwide Chairman, Medical Devices Group
Karen Licitra, Worldwide Chairman, Global Medical Solutions
Kathryn E. Wengel, VP, Johnson & Johnson Supply Chain
Charles Austin, Corporate VP, Global Supply Chain
Jesse J. Wu, Chairman, Johnson & Johnson China
NO. of EMPLOYEES: 23,000
HEADQUARTERS: Warsaw, Ind.; Raynham, Mass; and
West Chester, Pa.
“Creating a strong business and building a better world are not con-
flicting goals—they are both essential ingredients for long-term success.”
— William Clay Ford Jr., executive chairman, Ford Motor Co.
M
ilton Friedman remains as controversial a figure in
death as he was in life.
Renowned for his free-market ideology and con-
servatism, Friedman’s antistatist views—mainly, the belief that
unimpeded private competition produces better results than
government—are still contentious subjects, nearly nine years af-
ter his demise. Yet the most fervent debates continue to revolve
around his stance on corporate social responsibility, a concept he
labeled“nonsensical”and harmful to the foundations of a free so-
ciety. Writing in The New York Times Magazine in September 1970,
the Nobel Prize laureate impenitently proclaimed that business
has “only one social responsibility—to use its resources and en-
gage in activities designed to increase its profits so long as it stays
within the rules of the game, which is to say, engages in open and
free competition without deception or fraud.”
Friedman believed corporations are inhuman entities that
cannot possibly have real responsibilities. In the ideal free mar-
ket, he contended,“all cooperation is voluntary...There are no val-
ues, no ‘social’ responsibilities in any sense other than the shared
values and responsibilities of individuals.”
Friedman’s unconventional business strategy initially resound-
ed with Americans (journalist/author George Will called him “the
most consequential public intellectual of the 20th century”) but
support for the doctrine has dwindled considerably as companies
respond to consumer demands for reputational excellence.
Numerous studies have shown that corporate social respon-
sibility (CSR) policies influence consumer purchasing decisions.
July/August 2015 odtmag.com ODT • 33
Top Companies
A survey by branding firm Landor Associates concluded that 77
percent of consumers believe it is important for companies to be
socially responsible.“There’s a heightened awareness of the need
to be, and to be seen as, a good corporate citizen,” noted Rob-
ert Grosshandler, CEO of iGive.com, which allows consumers to
support their favorite charities through shopping.
Johnson & Johnson realized the value of good corporate
citizenship quite some time ago. The company bible, a.k.a. its
72-year-old Credo, pledges responsibility to the “world com-
munity” as well as those in which the diversified healthcare firm
operates. “We must be good citizens—support good works and
charities and bear our fair share of taxes,” the Credo reads. “We
must encourage civic improvements and better health and edu-
cation. We must maintain in good order the property we are priv-
ileged to use, protecting the environment and natural resources.”
Like many companies, JNJ has refined its approach to CSR
over the years by closely relating social causes to its core busi-
nesses, an approach scholars have dubbed “socially responsible
capitalism.” Last year, for example, the company eliminated PVC
(polyvinyl chloride) in its Enseal G2 Articulating Tissue sealers,
and cut its energy and water consumption by 44 percent and 43
percent respectively, in disinfecting/sterilizing the DePuy Syn-
thes TruMatch personalized Sigma Knee implants.
By embodying CSR initiatives into its business strategy, JNJ is
both a good corporate citizen and a savvy investor—a combination
that has helped the company continually boost its bottom line.
“Our credo is absolutely central to our culture and impacts
everything we do. It reminds us that we are responsible to pa-
tients, medical professionals, consumers, families and communi-
ties worldwide, and it motivates our employees to come to work
every day with the passion to make a difference in the world...”
CEO/Board Chairman Alex Gorsky told Leaders Magazine last
spring. “We share a belief that if we take care of those responsi-
bilities, then everything else will take care of itself. Throughout
our history, this has been true.”
And it was true last year as well. The New Brunswick, N.J.-
based company grew net sales 4.2 percent in 2014 to $74.3 billion,
bolstered mainly by a 15 percent jump in global pharmaceutical
revenue ($32.3 billion). The increase in drug sales offset a 1.3 per-
cent slide in worldwide Consumer sales ($14.5 billion) and a 3.4
percent decrease in Medical Devices proceeds ($27.5 billion). Ex-
cluding the net impact of M&A activity, including the June 2014
divestiture of Ortho Clinical Diagnostics, the medical devices
segment had underlying operational growth of 1.5 percent.
JNJ’s Pharmaceutical segment traditionally has outperformed
its brethren, but executives are planning to even the score a bit by
seeking approval of more than 30 major products in its Medical
Devices division by the end of 2016 while also focusing on fast-
growing emerging markets. Much of that focus will be centered
on China and Russia, where the medtech sector is growing three
to four times faster than in developed markets.
“China is important to every medical device company given
the number of people and the size of the market opportunity,”
Glenn Novarro, an analyst with RBC Capital Markets in New
York, told Bloomberg Business. “JNJ is one of the early investors
in China and it’s paying off. They are ahead of the curve.”
And the company has managed to stay ahead of the curve by
avoiding the bribery probes that have snared the likes of GlaxoS-
mithKline, and taking advantage of the Middle Kingdom’s grow-
ing middle class, government investments, and age-related condi-
tions like arthritis, osteoporosis and degenerative joint disease.
For example, JNJ conducted clinical trials with bone repair de-
vices manufactured at its Suzhou facility, and is branding them
as locally made products to make them eligible for higher reim-
bursement from the Chinese government.
“My personal vision is to innovate more out of China, tak-
ing advantage of new thinking within R&D [research and devel-
opment] to develop simpler, easier to use and more affordable
products,” Michel Orsinger, worldwide chairman of JNJ’s global
orthopedics group, told Bloomberg. “And we want to launch
them not only in China but bring them into western countries, a
reverse innovation.”
Orsinger’s vision could soon become a reality: Last fall, JNJ
opened the Asia Pacific Innovation Center, a Shanghai-based
medtech incubator with satellite hubs in Singapore, Australia
and Japan. Armed with local science and technology experts and
deal-making capabilities, the center is tasked with identifying
and developing promising early-stage opportunities in drugs,
medical devices/diagnostics, and consumer healthcare products.
The Center already has fostered several new collaborations
in both Australia and China, including the establishment of a
partnering office at Suzhou BioBAY, an incubator with more than
400 companies in the areas of drug discovery, biotech, in-vitro
diagnostics, medical devices and nanotechnology. The office, ac-
cording to executives, will function as an extension of the Center
to work with academics and entrepreneurs on a more local basis.
The Center’s partnering offices are part of a broader strategy to
interact more directly with life science clusters worldwide.
“The Johnson & Johnson Family of Companies has a long
standing presence in China extending back almost 30 years. Our
on the ground presence across the region allows us to work side by
side with our partners with speed, agility, and insight to translate
innovations into new products,” noted Jesse Wu, chairman, John-
son & Johnson China.“The Asia Pacific Innovation Center supports
our larger goal to address China’s specific healthcare needs, invest
in local capabilities, and increase our external collaborations.”
JNJ’s Medical Devices division accounted for 37 percent of the
firm’s total worldwide sales in fiscal year 2014 (ended Dec. 31).
The segment houses 11 businesses under its roof, including Bio-
Sense Webster; the troubled orthopedic and neurological focused
DePuy Synthes; Janssen Diagnostics; and advanced surgical care
units Ethicon and Ethicon Endo-Surgery.
One of the division’s best performers was the DePuy Synthes
orthopedic franchise, which grew sales 1.7 percent to $9.67 bil-
lion—more than one-third of the Medical Devices segment’s
2014 gross. Executives attributed the gain to robust sales of trau-
ma, sports medicine, hip and knee products, some of which made
their debut last spring.
34 • ODT odtmag.com July/August 2015
Product Premieres
The company launched a bevy of new joint replacement parts within
a two-month period last year, adding a rotating platform design and
anatomic patella to the Attune Knee System lineup in March (at the
American Academy of Orthopaedic Surgeons Annual Meeting) and
debuting a hip system and anatomic shoulder in May.
The Attune rotating platform design increases the level of
conformity to provide stability while delivering freedom of mo-
bility, DePuy Synthes bigwigs noted. Rotating platform knees
aim to restore more natural movement to the joint by allowing
the bearing to rotate in the same manner as an anatomical knee.
Rotating knees also are designed to reduce stress and wear on the
implant by 94 percent.
The anatomic patella—unique to DePuy Synthes—works
with the Attune knee femoral components and is compatible
with both the Attune fixed bearing and rotating platform knees.
It is designed to have more natural sagittal plane kinematics than
traditional dome style patella components; the more natural ki-
nematics can reduce soft tissue interaction with the femoral com-
ponent and thereby help prevent soft tissue irritation, according
to product spec sheets. Also, the unique kinematics of the ana-
tomic patella are designed to increase quadriceps efficiency in
deep flexion, allowing the knee to more easily flex and extend.
Less than 24 hours after unveiling its Attune enhancements,
the company introduced the DePuy Synthes Advantage, a suite
of provider-focused solutions that complement the firm’s product
portfolio and help improve clinical and economic outcomes.
The Advantage suite features an exclusive licensing agree-
ment with MedTrak to offer subscription-based services through
a software solution called CareSense. The software allows health-
care providers to collect and analyze real-time data on the “triple
aim” measures (patient outcomes, patient satisfaction and costs).
The suite also includes the Geriatric Fracture Program, a tool de-
signed to streamline and standardize preoperative assessments to en-
able geriatric patients to undergo surgery within 24 hours of injury.
“By providing solutions that, for example, are designed to save
time in the operating room, potentially reduce hospital stays or pro-
vide real-time analytics that lead to improved efficiency and patient
satisfaction, we create value for the healthcare system as a whole,”
said Gary Fischetti, company group chairman of Orthopedics.
In May, DePuy Synthes supplemented its Attune rotating
platform system with the addition of the Trumatch Resection
Guide and Pin Guide solution. The company also enhanced its
hip and shoulder portfolios with the release of the Corail Revi-
sion Hip system and Global Unite Anatomic Shoulder.
The Corail hip is claimed to be the first tapered wedge revision
stem in the United States, designed to help treat patients with
mild to moderate femoral defects who need hip revisions, where-
as the Global Unite shoulder allows surgeons to use the same
humeral stem to repair shoulder fractures, perform total shoulder
replacements or reverse total replacements using the previously
implanted humeral stem without the use of a stack-on adaptor.
The Global Anatomic Shoulder allows surgeons to use the same
humeral stem to repair shoulder fractures or perform a total shoul-
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der replacement. For patients who might later need a reverse total
replacement, the system’s already-implanted humeral stem con-
verts to a total reverse construct without using a stack-on adaptor,
which could over-stuff the joint and limit its range of motion.
Conversion with the Global shoulder system occurs by ex-
changing the top of the humeral stem with a reverse component
that can be tailored to meet varying patient anatomies.
DePuy Synthes rounded out its joint reconstruction offerings
in November with the introduction of the Gryphon Anchors with
Proknot technology, an arthroscopic hybrid anchor solution for
shoulder repair and hip instability. The Gryphon Anchor uses a
proprietary pre-tied sliding knot that forms a construct that is
up to 41 percent stronger than tested arthroscopic knots and
knotless devices, and up to 64 percent smaller than standard ar-
throscopic knots. It also is touted as the only suture anchor that,
with just one-half hitch, results in a secure knot, enabling sur-
geons to add incremental tension at any point in the repair.
The Gryphon Proknot Anchor is indicated for use in Bankart
and SLAP lesion repair, capsular shift or capsulolabral shoulder
reconstruction and hip capsular and acetabular labral repairs. It
is manufactured either in non-absorbable PEEK (polyether ether
ketone) or absorbable Biocryl Rapide material.
DePuy Synthes added to its Trumatch craniomaxillofacial
(CMF) product line in April with the debut of patient specific plates
for mandible (PSPM)—customized plates based on surgeon speci-
fications and individual patient anatomy. The CMF PSPM contains
a range of customizable design features that surgeons can select
before procedures, including plate thickness and shape, screw hole
locations, pattern and angulation. Designed and manufactured to
the pre-planned patient anatomy, the plate is 3-D milled from a
solid block of titanium to its final shape and never bent, thus elimi-
nating the need for plate bending in the operating room, which
can induce mechanical stress and increase its risk of breaking.
The CMF patient specific plate for mandible is ideal for use
with Proplan CMF surgical guides. These guides have integrated
drill markers for creating the bone holes, designed to align with
the plate holes to facilitate transfer of the surgical plan to the op-
erating room. Anatomic bone models can be created from origi-
nal patient computed tomography scans or to the planned out-
come to provide tactile and visual representation of the surgery.
DePuy Synthes manufactures its CMF PSPM in 2 millimeter-
and 2.5 millimeter-thick profiles, both of which can better withstand
fatigue over the firm’s 2.5 millimeter MatrixMandible flat plates; the
2 millimeter-thick plates offer greater strength with a lower profile
compared with the 2.5 millimeter MatrixMandible flat devices.
The company beefed up its Spinal portfolio with the release
of the Conform Sheet, the ViviGen Cellular Bone Matrix and the
Anspach EG1 high-speed electric drill, the latter of which can
be used in neurosurgical and otology procedures as well. DePuy
Synthes claims its Anspach drill has 30 percent more power than
the XMAX and EMAX 2 Plus models. The device is used to cut
and shape bone, including the spine and cranium, and has vari-
ous quick-coupling attachments, dissection tools and accessories
for greater flexibility across procedures. The Anspach EG1 drill
36 • ODT odtmag.com July/August 2015
also features integrated air cooling, an operating speed of up to
80,000 rpms, minimal start-up kick, and is compatible with auto-
mated washing and sterilization.
The Conform Sheet is a hydrated, pliable and totally demin-
eralized cancellous bone matrix that fils voids during posterolat-
eral spinal fusion surgery and provides a natural scaffold for new
bone formation. Processed by the Musculoskeletal Transplant
Foundation, the allograft implant has both osteoinductive and
osteoconductive properties. A demineralization process forces
bone morphogenic proteins to be exposed, giving Conform Sheet
its osteoinductive properties (the scaffold’s cancellous structure
gives the Sheet its osteoconductive characteristics). The implant
is wickable, readily absorbing various hydrating fluids includ-
ing bone marrow aspirate, blood or saline; when combined with
bone marrow aspirate, Conform Sheet becomes osteogenic.
Conform Sheet comes in four sizes, but it can be cut to fit
irregular-shaped anatomies. The implant is compatible with
DePuy Synthes’ Spine Matrix Minimally Invasive Pedicle Screw
system and Expedium Spine system, among others.
ViviGen is a human cell, tissue and cellular/tissue-based prod-
uct comprised of crypreserved live, viable cells within a cortical
cancellous bone matrix and demineralized bone, delivering all of
the properties required for bone formation. “The science behind
VivGen, combined with the intraoperative flexibility it provides,
drove me to try it initially,” said Kennedy Yalamanchili, M.D., of
Christiana Care Hospital in Newark, Del., one of several insti-
tutions that has used the product. “My experience early on has
shown that ViviGen has desirable handling characteristics and is
an appropriate alternative to taking the patient’s own bone for
many of my spinal procedures.”
In December, the company received U.S. Food and Drug Ad-
ministration 510(k) clearance to market its Vertical Expandable Pros-
thetic Titanium Rib devices (VEPTR) for the treatment of Thoracic
Insufficiency Syndrome, a rare congenital condition characterized by
severe chest, spine or rib deformities that impair breathing and lung
growth in children. The VEPTR products only were previously avail-
able under Humanitarian Device Exemption regulations.
The VEPTR/VEPTR II devices include a system of curved tita-
nium rods that surgically are attached to the ribs, spine or pelvis
to stabilize and straighten the spine, and to create a separation
between ribs to potentially improve breathing and enable normal
lung growth and development. After an initial procedure, VEPTR/
VEPTR II are lengthened as the child grows. The rods are ideal
for treating children with progressive congenital, neuromuscular,
idiopathic or syndromic scoliosis.
In July, DePuy Synthes’ Mitek Sports Medicine unit unveiled
the Monovisc High Molecular Weight Hyaluronan, a single-in-
jection treatment for knee pain related to osteoarthritis, and the
Peak Platelet Rich Plasma (PRP) System, a new device that pro-
duces high quality PRP in two-and-a-half minutes.
Monovisc is a single-injection hyaluronan treatment that can
provide up to six months of pain relief and helps restore joint
mobility in patients suffering from knee osteoarthritis pain. It is
injected directly into the knee to help replace the naturally oc-
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curing hyaluronan found in healthy joint fluid, and to cushion,
protect and lubricate the knee joint.
Monovisc is specifically for patients who have failed to re-
spond adequately to conservative non-pharmacologic therapy
and simple analgesics such as acetaminophen.
The Peak Platelet-Rich Plasma (PRP) system works by separat-
ing PRP from a sample of a patient’s own blood. The device con-
sistently produces 3 mL of high-quality PRP from 27 mL of whole
blood in two-and-a-half minutes, yielding up to seven times the
normal concentration of platelets, according to DePuy Synthes.
The company’s Codman Neuro unit experienced a busy sec-
ond half of 2014, releasing two catheters and a disposable for-
ceps, and securing approval in China, South Korea and Taiwan
for its Revive SE Thrombectomy device, a next-generation self-
expanding clot removal product intended to restore blood flow
in patients with acute ischemic stroke secondary to intracranial
occlusive vessel disease.
The Revive SE device is designed to ease navigation through
small and tortuous blood vessels and arteries in the cerebral vas-
culature. The product enables rapid restoration of blood flow to
the brain during an acute ischemic stroke.
DePuy Synthes debuted its catheters during the Society of
NeuroInterventional Surgery 11th Annual Meeting last summer
in Colorado. The Envoy DA XB Guiding Catheter enables access
to more distal anatomy and is designed to provide additional
proximal support of the catheter when more stability is required.
It features end-to-end braided construction, a distal 10 centi-
meter hydrophilic coating, soft distal tip with a recessed metal
marker, and Brite Tip Technology for enhanced visibility.
The 7F Envoy Guiding Catheter is the largest-diameter guiding
catheter the company has ever offered, expanding upon its 6F Envoy
line. With stainless steel end-to-end hybrid braid technology and
soft distal Brite Tip Technology, the new catheters are offered in mul-
tiple shape configurations to navigate and treat different anatomy.
Courtroom Drama
JNJ is no stranger to the judicial system. As the world’s largest and
most diversified healthcare firm, it spends a considerable amount
of time in the courtroom fending off legal challenges from rivals,
defending its integrity and protecting its proprietary technology.
A summary of the more notable cases in 2014 follows:
• Baxter International lodged a patent infringement com-
plaint against JNJ in January 2014, accusing its rival of vio-
lating six patents protecting Baxter’s biosurgery products,
including Floseal, used to control bleeding during surgery.
The suit contends JNJ’s hemostasis delivery devices, includ-
ing its SurgiFlo product line, directly compete with Baxter’s
biosurgery products. Floseal and SurgiFlo are indicated
for use in surgical procedures as an adjunct to hemostasis
when control of bleeding by ligature or other conventional
methods is ineffective or impractical, according to the suit.
• The rivalry between Stryker Corp. and DePuy Synthes reached
a boiling point last summer, when the former accused the
38 • ODT odtmag.com July/August 2015
latter (and five former sales team employees) of breach of
contract. A complaint filed in a New Jersey federal court al-
leged the five Stryker sales reps resigned en masse in April
(2014) and immediately began soliciting customers in North
Carolina, and promoting DePuy products among area doctors,
moves that reportedly cost the firm roughly $3.4 million. The
five accused were key members of the Stryker Howmedica
team assigned to promote and sell orthopedic reconstruc-
tive and trauma products to physicians and surgeons in the
Fresno and Bakersfield, CA areas, according to the complaint.
Stryker claims their illegal actions will cost the company up
to 90 percent of its reconstructive devices sales and between
60 and 70 percent of its trauma parts sales in the region. The
suit alleges that the five company defectors submitted almost
identical resignation letters simultaneously in April and did
not respond to phone calls, emails, or text messages.
• In August, Stryker extended an olive branch (of sorts) to
DePuy Synthes, dismissing the company from a patent
infringement lawsuit over its hip implant acetabular cup,
which features a“dual-locking mechanism and is capable
of accommodating a plurality of bearings with different
characteristics.”
• Bonutti Skeletal Innovations LLC rang in a merry holiday
season with its federal lawsuit (in December) claiming
DePuy Synthes’ product line of spinal devices infringes
six patents owned by Bonutti, generally covering wedge
implants and their methods of implantation.
1. Stryker
$9.67 Billion
KEY EXECUTIVES:
Kevin A. Lobo, President & CEO
Lonny J. Carpenter, Group President, Global Quality and Operations
Ramesh Subrahmanian, Group President, International
David K. Floyd, Group President, Orthopaedics
Timothy J. Scannell, Group President, MedSurg & Neurotechnology
J. Andrew Pierce, President, Endoscopy
James N. Heath, President, Instruments
William J. Huffnagle, President, Reconstructive
Vivian Masson, President, Trauma & Extremities
Mark H. Paul, President, Neurovascular
Bradford L. Saar, President, Medical
Spencer S. Stiles, President, Spine
Wayne D. Dahlberg, President, Performance Solutions
NO. of EMPLOYEES: 26,000
HEADQUARTERS: Kalamazoo, Mich.
 Top Companies

N
ever let it be said that medical technology is uninspiring. for it—not only for inspiring me to pursue medicine, but also for
Meet Tadashi Kikuchi, M.D., and Galina Gheihman, making it physically possible for me to do so.”
two rather ordinary individuals driven to magnificence Perhaps even more inspiring than Stryker’s Xia 3 system is
by Stryker Corp. innovations. Kikuchi, a surgeon at Bange Ko- the Customized Mandible Reconstruction Plate, used last year to
sei General Hospital in Fukushima, Japan, is the company’s rebuild the lower jaw of a Kazakhstanian woman grievously dis-
6,000-knee-man, having reached that procedural milestone in figured by a misdiagnosis of terminal cancer. Based on anatomi-
January with the help of sales representative Toshikazu Shimazu cal data and a clinical analysis, the customized plate is designed
(and Stryker’s lineup of artificial joints, of course). specifically for the patient (indeed, the number and position of
Gheihman is a Harvard Medical School
student inspired to pursue her dream career
after suffering from a debilitating childhood
spinal condition. The Toronto, Canada, na-
tive was an active youngster, participating in
basketball, springboard diving and ballroom
dancing, but developed lower back pain at
14—an age of tremendous physical change.
The pain eventually affected her ability to
play youth sports.
“What had been a dull, aching pain
stretching across my lower back was soon
joined by shooting, sharp nerve pain running
down the backs of my legs and a tingling
numbness in my calves,” Gheihman recalled
in Stryker’s 2014 annual report.
In 2008, Gheihman was diagnosed with
spondylolisthesis, a condition in which a verte-
bra in the spine moves forward out of its prop-
er position onto the bone below. In children,
spondylolisthesis usually occurs between the
fifth bone in the lower back (lumbar vertebra)
and the first bone in the pelvis area; the condi-
tion often can be traced to a birth defect in that
area of the spine or a sudden injury.
Two years after her diagnosis, Gheihman
underwent surgery at Toronto Hospital for
Sick Children, receiving Stryker’s Xia 3 im-
plant to correct the vertebral misplacement
and stabilize her lower back. The spinal sys-
tem, used in more than 500,000 cases globally,
features a buttress thread blocker that helps
eliminate cross-threading, prevents screw
head splaying and ensures secure closure.
Gheihman resumed her active lifestyle
several months after the surgery with hikes
and camping trips, and she put Stryker’s
hardware to the test in 2011 by completing a
50-mile sea kayaking trip in Vancouver, Brit-
ish Columbia. Her back problems are now a
distant memory.
“It’s been a dream come true,” Gheihman
said, “and I have my surgeon, Dr. [Stephen]
Lewis; the Toronto Hospital for Sick Chil-
dren; and Stryker’s products, technology and
physician technical support team to thank

July/August 2015 odtmag.com ODT • 39

its screw holes vary by case). It’s also manufactured according to
planned patient outcome, which eliminates the need for intraop-
ertive adaptation.
The plate was implanted in Lessya Kotelevskaya, a 31-year-
old former business owner with a hole in her cheek and no jaw-
bone. Kotelevskaya lost her ability to eat and talk a decade ago
after undergoing grueling radiation treatments for a bone malig-
nancy she never had. The experience left her jobless, abandoned,
homeless and dangerously thin—a fate she passively accepted
until an older cousin brought her to the United States for medical
treatment. Last year, she underwent reconstructive surgery at the
University of Louisville Hospital in Kentucky, and was so moved
by the generosity of her doctors and the success of the surgery
that she currently is considering becoming a nurse.
Spiritual rebirths like Kotelevskaya’s abounded last year as
Stryker diversified its product portfolio and enhanced its global
regulatory training and patient education efforts. The company
expanded its offerings mostly through acquisition, spending $916
million to augment its lineup of foot/ankle solutions, hips, spinal
implants, surgical sponges, endoscopy instruments, operating
room equipment (including lights), and surgical tables.
Stryker got the most bang for its buck with the $285 million ac-
quisition of Small Bone Innovations Inc., the Morrisville, Pa.-based
developer of the Scandinavian Total Ankle Replacement (S.T.A.R.)
system. First designed as an anatomic non-constrained resurfacing
prosthesis in 1978, the S.T.A.R. system—now available in more than
40 countries—is touted as“the only U.S. Food and Drug Administra-
tion-approved total ankle replacement for uncemented use.”
Besides the S.T.A.R. ankle system, Stryker inherited a bounty
of other extremity products from Small Bone Innovations, includ-
ing its silicone PIP finger joint implants, carpal fusion plate, distal
radial volar plate (wrist), distal ulnar head replacement, proximal
radial head (elbow) and extended stem. The additional merchan-
dise will likely help Stryker better compete in the fast-growing
U.S. extremities market, a segment estimated to be worth $4.2
billion next year.
Stryker found another good bargain with the $120 million
purchase of Patient Safety Technologies Inc., a seller of bar-coded
sponges and electronic counters through its wholly owned sub-
sidiary, SurgiCount Medical.
Based in Irvine, Calif., SurgiCount began operating in 2006
and currently serves more hospitals (376) than its competitors,
mainly, RF Surgical Systems Inc. and ClearCount Medical Solu-
tions. SurgiCount’s bar-coded surgical sponges and towels, bar-
code scanner and compliance tracking software—all of which fall
under the Safety Sponge System brand umbrella—are used in
operating rooms to improve patient safety and quality, and re-
duce medical costs by preventing retained foreign objects after
surgery. Roughly 2,300 such incidents (mostly abandoned spong-
es) are reported annually, burdening the U.S. healthcare system
with $920 million in additional expenses.
Stryker also took steps to improve overall operating room
safety and efficiency by snagging Bechtold Holding AG for $172
million last winter. The German company’s product suite in-
40 • ODT odtmag.com July/August 2015
cludes surgical tables, equipment booms and surgical lighting
systems—complimentary solutions that likely will strengthen
Stryker’s presence in the global operating-room equipment mar-
ket, which is expected to top $4 billion by 2019.
Expanding its gamut of sports medicine technology proved
considerably more difficult for Stryker after longtime rival Smith
& Nephew plc purchased ArthroCare in early February for $1.7
billion. Stryker quickly responded with an all-cash offer for pri-
vately held Pivot Medical Inc., maker of instruments and im-
plants that treat femoroacetabular impingement syndrome. Piv-
ot’s product platform provides efficient access to and restores hip
mobility with minimal incisions.
Stryker executives said they expect Pivot’s offerings to en-
hance the company’s existing sports medicine lineup in knees
and shoulders, and improve overall portfolio performance.
“We’ve done five acquisitions in the last year,”Chairman/CEO
Kevin A. Lobo told CNBC“Mad Money”host Jim Cramer last fall.
“Every one of those acquisitions strengthened our presence in
orthopedics, strengthened our presence in specialty surgery and
strengthened our presence in neuro[technology].”
All that fortification pumped up revenue considerably last
year: Net sales swelled 7.2 percent to $9.6 billion and gross profit
climbed 5.6 percent to $6.4 billion due to higher shipments of
orthopedic instruments, trauma and extremity devices, endos-
copy products, neurotechnology equipment, and other medical
paraphernalia. Nearly 8 percent of sales growth was attributable
to increased unit volume and product mix changes, while 2.5 per-
cent was derived from acquisitions.
Operating income remained relatively flat at $1.2 billion but
the company’s 2014 net earnings took a nosedive, plummeting
48.8 percent to $515 million, according to annual report data.
Basic and diluted earnings per share suffered the same fate, suc-
cumbing to volatile foreign currency rates with respective 48.9
percent and 49 percent year-over-year losses.
Global macroeconomic volatility affected profits as well—par-
ticularly in Russia, Turkey, Brazil and Mexico—though Stryker’s
weak performance in those countries partially was offset by
double-digit gains in emerging markets. Japanese orthopedic
sales also tumbled, as the company implemented an enterprise
resource planning system there in the first quarter.
Overall growth was best in the United States, where net sales
jumped 9.6 percent to $6.5 billion (representing 68 percent of
2014 total revenue). Europe, Middle East and Africa proceeds
rose 4.2 percent to $1.37 billion, and Asia-Pacific sales climbed
3.7 percent to $1.36 billion. Canada and South America, however,
spoiled Stryker’s otherwise spotless global growth spurt with its
5.9 percent revenue dropoff.
The company reconciled that sole earnings blemish with a
flawless internal record, achieving solid gains in its three business
segments and almost all product divisions. The MedSurg unit led
in growth, expanding sales 10.7 percent to $3.7 billion due to the
comeback of its Neptune Waste Management system, a device
recalled in 2012 over improper use and lack of U.S. Food and
Drug Administration (FDA) approval. The system, designed to
eliminate exposure to fluids and/or smoke in the operating room,
reappeared on the market with several improvements, including
suction power codes, updated software to make the unit’s opera-
tion more interactive and responsive, and safety warning labels
on the top, front and back of the device. A warning flag also was
added to the IV (intravenous) pole for visibility.
The Neptune system homecoming mostly benefitted the
MedSurg unit’s Instruments division, which posted a 12.2 per-
cent spike in net sales in the year ended Dec. 31, 2014, to $1.4
billion. Endoscopy was close behind, surging 13 percent to $1.3
billion, while Medical grew 7.8 percent to $766 million. Sustain-
ability products (reprocessed and remanufactured devices) fell
out of favor as sales slid 1.8 percent to $209 million.
Stryker’s Orthopaedics segment (formerly its Reconstructive
unit) ended the year with a perfect growth record, boosting to-
tal revenue 5.1 percent to $4.1 billion. All four product divisions
contributed to the upswing, with orthobiologics, biosurgery and
performance solution products leading the charge by way of a
24.2 percent revenue hike (to $236 million). Trauma and Extremi-
ties pitched in with a 10.2 percent sales increase ($1.23 billion),
followed by Knees with a 1.8 percent gain ($1.4 billion) and Hips
with a 1.5 percent spike ($1.29 billion).
Hip sales likely were stunted to some extent by Stryker’s deci-
sion last fall to settle thousands of patient lawsuits over its recalled
metal-on-metal Rejuvenate Modular-Neck and ABG II Modular
Neck hip implants for $1.42 billion. Cleared by the FDA in 2008 and
2009 respectively, the devices were pulled from the market in July
2012 after dozens of patients reported problems with the artificial
implants (among them: pain, inflammation, infection, loosening,
compromised mobility, and in extreme cases, failure). Stryker ex-
ecutives expected the settlement to have a minimal impact on 2014
earnings since most of the payments would be dispersed in 2015.
Likewise, fiscal fallout from the company’s OtisKnee settlement
had a minimal impact on Knee revenue. In early December, Stryk-
er agreed to pay the U.S. government $79.5 million to settle crimi-
nal and civil charges that its OtisMed Corp. subsidiary sold devices
used in knee replacement surgery without approval from the FDA.
Such legal drama was lacking in Stryker’s Neurotechnol-
ogy and Spine segment, which posted an overall 5 percent sales
increase to $1.7 billion. Neurotechnology product proceeds
climbed 9.4 percent to $1 billion, bolstered undoubtedly by the
February launch of the Trevo XP ProVue Retriever, an expansion
of the firm’s ProVue Retriever line for acute ischemic stroke treat-
ment. The addition provides additional size and shape options for
doctors. Spine sales slipped 0.4 percent to $740 million despite
(or perhaps on account of) the March acquisition of CoAlign In-
novations Inc., a manufacturer of implants for lower lumbar pro-
cedures, and the November debuts of the LITe TLIF Procedural
Solution and Aero-AL anchor-based ALIF technology.
The LITe (less-invasive technology) TLIF system combines
several innovations, including the LITe Pedical Based Refractor,
the ES2 Percutaneous Spinal System, and the AccuLIF Expand-
able Lumbar Interbody Fusion technology. The LITe Pedical Based
Refractor allows for direct visualization and a less invasive work-
42 • ODT odtmag.com July/August 2015
ing corridor, the ES2 system features an integrated blade screw
with built-in reduction, and the AccuLIF technology is designed
to help restore segmental lordosis and sagittal balance.
The Aero-AL system compresses across the interbody space.
It features patented compression technology designed to draw
the vertebral bodies toward the implant to create compressive
forces at the implant-to-endplate interface, offering clinicians a
more streamlined, less disruptive approach compared with tradi-
tional screw-based ALIF technologies.
3. Zimmer
$4.67 Billion
KEY EXECUTIVES:
David C. Dvorak, President & CEO
James T. Crines, Exec. VP of Finance & Chief Financial Officer
Joseph A. Cucolo, President, Americas
Kataryna Mazur-Hofsaess, M.D., Ph.D., President, Europe,
Middle East and Africa
Stephen H.L. Ooi, President of Asia Pacific
Matt E. Monaghan, Sr. VP, Global Hips &
Reconstructive Research
Stephen E. White, Sr. VP & General Manager, Knees
David J. Kunz, VP, Global Quality, Regulatory and Clinical Affairs
Richard C. Stair, Sr. VP, Global Operations and Logistics
NO. of EMPLOYEES: 10,000
HEADQUARTERS: Warsaw, Ind.
K
en Watson’s pain typically followed the same daily pattern.
It would start in his shoulder blade and then intensify,
the dull ache suddenly turning into a white-hot lightning
bolt that radiated to his neck. Once there, it sat like a pool of mol-
ten lava, aggravating the muscles and nerves already strained by
hours of sedentary computer use. Every so often, the pain would
cut a fresh swath down his left arm. Relief was next to impossible.
“I would just come home and feel like going straight to bed
because that’s the only way I could get comfortable,” he recalled.
Thinking his rotator cuff was torn or—worse—detached, Wat-
son sought help (and relief) from an orthopedic shoulder special-
ist. But after reviewing Watson’s X-rays and magnetic resonance
imaging films, the specialist determined his shoulder was beyond
repair and recommended replacement surgery.
Watson was stunned at the prognosis but jumped at the
chance to lead a pain-free existence.“He [the orthopedist] said, ‘I
know we can take care of your pain,’”Watson fondly reminisced.
“The decision to have [the surgery] was an easy one to make once
I got home and talked with my wife ... even there in the office, I
said, ‘Let’s go ahead with this.’”
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 Watson’s orthopedist fitted him with a Trabecular Metal Re-
verse Shoulder System from Zimmer Holdings Inc., an artificial
joint designed to address a wide range of patient needs, including
both primary and revision procedures as well as reverse, conven-
tional and hemi-arthroplasty applications.
Launched in 2006 and implanted in more than 32,000 patients
globally since then, the Reverse Shoulder System features a low-
profile humeral stem that helps conserve the proximal humerus,
preserve natural bone and allows surgeons to reconstruct the gle-
no-humeral joint. Its six proximal suture holes and proximal pe-
rimeter rim are positioned for enhanced tuberosity and soft tissue
reattachment. The glenoid component has a bone-sparing design
set off by a small-diameter base plate that spares the glenoid of
holes. Two polyaxial bone screws with a 30-degree arc allow for
maximum bone purchase, and the system’s monobloc stem en-
sures it will not separate in the humeral canal. Earlier this year,
Zimmer began manufacturing its standard ultra-high molecular
weight polyethylene liners with Vitamin E highly crosslinked
polyethylene (Vivacit-E), a high-tech bearing surface designed to
give the implant more oxidative stability and low wear.
“It’s amazing that they were able to look at the anatomy, see
where it could no longer work and devise a way to change it to
let other parts of the anatomy basically give you the same motion,
mobility and opportunity for strength without it feeling any differ-
ent,”Watson said.“How I’m doing today is like night and day from
where I was. To not even be able to lift a plate and put it up in the
cabinet like I was before surgery and now to be able to take three or
four in one hand and lift up is fantastic. The journey that I’ve had is
proof there is a good quality of life [to be had] and relief from a lot
of struggles. The best part about my life now is I see the opportunity
to get back to the things I like. If a friend came to me with shoulder
pain and was at the point where I was, I would say go for it.”
Such advice apparently resounded with joint replacement pa-
tients last year: Robust sales of Zimmer’s Reverse Shoulder System
helped boost the firm’s extremities product revenue 5 percent to
$204.3 million. Other contributors to the company-best growth
rate included the Sidus Stem-Free Shoulder, Trabecular Metal Total
Ankle and various items from the June 2013 purchase of German
device maker Normed Medizin-Technik GmbH (the DocPrice,
Vario Subtalar System, Malleolar Plate System, MiniCAN System
2.7, Charcot chisels, Maxican System 4.5 and Weil bone lever). The
bulk of extremities devices were sold in North and South America
($149.6 million total), but Zimmer made the most profit in Europe
and Asia-Pacific, where sales swelled 19 percent and 20 percent to
$40.6 million and $14.1 million, respectively.
Extremities’ stellar performance also helped bolster net recon-
structive revenue 2 percent to $3.49 billion, though Knees pitched
in as well with a fiscal year growth rate of 3 percent. Sales driv-
ers included the top-selling NexGen Complete Knee Solution, the
Unicompartmental High Flex Knee and the Persona Personalized
Knee, the latter of which has been targeted for premium pricing.
“This is a big system that includes cemented, non-cemented and
we’re working towards other elements in this multi-phase launch
of the Persona system but we’re continuing to be optimistic and
44 • ODT odtmag.com July/August 2015
quite confident about our ability to execute and get premium pric-
es for the element of the technology we think warrant it,”President
and CEO David C. Dvorak told investors earlier this year.
Unveiled in March 2013, the Persona knee combines person-
alized implants with intelligent instruments to provide orthope-
dic surgeons with better intraoperative precision to customize the
best fit for patients. Zimmer incorporated various technologies
into the system, including a Bone Resection Atlas, which help
designers and engineers precisely define anatomically accurate
implant shapes and sizes; the company’s proprietary trabecular
metal; and vitamin E for increased strength, low wear and im-
proved long-term performance.
The Persona and other knee systems generated $1.96 billion
for Zimmer last year, though sales were somewhat tempered by
global pricing pressures and fluctuating foreign exchange rates in
both Europe and Asia. Nevertheless, all geographic regions sus-
tained growth, with Europe leading the pack at 6 percent ($498.6
million in sales), followed by the Americas at 2 percent ($1.15
billion) and Asia at 1 percent ($309.8 million).
Knee sales are likely to get a boost in 2015 from the five new
patents awarded to Zimmer last year for its subchondroplasty
joint preservation procedure technology, a percutaneous outpa-
tient intervention that addresses the defects from subchondral
bone marrow lesions (BMLs). The additional patents broaden
coverage of the company’s subchondroplasty offerings to include
new procedure methods, instrument kits, navigation systems,
implants and other anatomical sites.
Hip sales remained flat, slipping $4.1 million to $1.32 billion
due to pricing pressures and foreign exchange rate volatility that
undermined profits 1 percent in Europe and 6 percent in Asia-
Pacific. Past best-sellers prevailed again in 2014 (year ended Dec.
31), with the M/L Taper hip prosthesis, M/L Taper hip prosthe-
sis Kinective technology, CLS Spotorno stem (from the CLS Hip
System), Alloclassic Zweymüller hip stem, and Fitmore hip stem
winning over customers. Other clinician favorites included the
Avenir Müller stem, Wagner SL Revision hip stem, Continuum
acetabular system, Trilogy IT acetabular system, Allofit IT Allo-
classic acetabular system, Vivacit-E highly crosslinked polyethyl-
ene liners and Biolox delta heads.
Zimmer’s dental portfolio continued its slow crawl back to the
black, growing sales 1 percent, or $3.5 million to $242.8 million
on higher demand for the Tapered Screw-Vent implant system, a
device with an internal hex platform design to reduce the stress on
the crestal bone and resist abutment screw loosening. Net proceeds
partially were offset by a drop-off in restorative product revenue.
Neither new product launches in Europe and Asia-Pacific nor
strong sales of Zimmer’s Natural nail system and Periarticular
Locking plates could lift trauma proceeds from its year-long funk.
Revenue was flat at $316.7 million despite 8 percent growth in
Europe and 4 percent growth in Asia-Pacific. In an attempt to
avoid another dismal performance in 2015, the company pur-
chased Cambridge, Mass.-based ETEX Holdings Inc., provider
of calcium phosphate-based biomaterials; the deal added ETEX’s
Beta-bsm (injectable), CarriGen, EquivaBone and Gamma-bsm
 Top Companies

(putty) bone void filler products to its biologics portfolio, enhanc- Extreme-Angle screw technology allowing for 112 degrees of
ing Zimmer’s ability to treat early-stage joint disease. conical range of motion and simple rod alignment. The Virage
Surgical product proceeds fell back to earth in 2014 after skyrock- system also includes a proprietary friction-fit screw head that
eting 18 percent the previous year. Revenue slid 5 percent to $410 holds the desired rod in position.
million as Zimmer’s temporary edge in the fluid waste management
market ended with the commercial return of a competitor’s capital “These new products reflect our vision to introduce solutions
equipment part (used with a single-use disposable manifold com- that make a meaningful difference for our surgeon customers and
ponent in its own fluid waste management system). their patients,” Dvorak wrote in his letter to shareholders at the
Spine sales bounced back from a five-year downward spiral start of the firm’s 2014 annual report.“Technologies such as these
with a 2 percent growth rate owing to solid demand for the Path- also advance our objective to become the single-solution pro-
Finder NXT minimally invasive pedicle screw system and trabec- vider at every stage of the continuum of care, offering the most
ular metal technology products. Revenue totaled $207.2 million; personalized and appropriate therapies for every condition and
gains were highest in Asia and Europe. The company helped en- patient. Our results in 2014 are evidence of Zimmer’s sustained
sure future growth in this notoriously difficult segment with 12 focus on our strategic growth platform.”
new product launches, including: That platform delivered constant currency net sales growth of
• Puros Demineralized Bone Matrix (DBM) block and strip, 2.4 percent (1 percent reported, to $4.67 billion) and a 5.4 per-
bone graft substitutes used to stimulate natural bone cent increase in adjusted earnings per share (to $6.06). Operat-
formation processes in spinal surgeries. Used alone or ing profit climbed 5 percent (adjusted) to $1.43 billion, and gross
as a bone graft extender, Puros DBM allografts provide profit rose 2.5 percent to $3.42 billion. Net earnings, however,
osteoconductive and osteoinductive properties, improved declined 5.3 percent due to increased spending on the company’s
handling and excellent graft containment. operational excellence initiatives, a $70 million legal fee and in-
• Puros DBM Reverse Phase medium putty, putty with tegration planning/debt issuance costs associated with its block-
chips, gel and paste—products designed to stimulate buster $13.35 billion bid for Biomet Inc.
natural bone formation processes in
which mesenchymal cells differentiate
into bone-forming cells. Puros DBM
with reverse phase medium items
allow the allograft to be malleable at
operating room temperatures while
causing the product to stiffen when
placed into the body.
• The Optio-C Anterior Cervical System,
a modular, stand-alone cervical device
that offers allograft/autograft and PEEK
(polyether ether ketone) options and
delivers the strength, stability and fu-
sion potential of a traditional anterior
cervical discectomy and fusion. Offering
secure fixation with no profile, the
system comprises an anterior cervical
plate, three bone screws and either a
PEEK intervertebral body fusion device
or structural allograft/autograft. The
system is designed to maximize fusion
with a load-sharing interface and mul-
tiple implant footprints.
• The Virage OCT Spinal Fixation System,
an occipital-cervico-thoracic spinal
fixation solution that uses Zimmer’s
360 decrees Omnidirectional Extreme-
Angle screw to bring a new experience
to posterior fixation surgery. All Virage
System polyaxial dual-lead screws incor-
porate the 360 degrees Omnidirectional

July/August 2015 odtmag.com ODT • 45


The cash-and-stock deal was the largest in orthopedics since
the 2012 marriage of DePuy and Synthes Inc., and the most game-
changing move for Zimmer since its 2001 spinoff from Bristol-
Myers Squibb Co. Conceived during last year’s period of medtech
merger mania (when Medtronic Inc. solicited Covidien plc for
$49.9 billion), the union reflects the increased benefits of scale
and dangers of being small within the orthopedic industry. It also
represents a clever strategy for stabilizing product prices: By elimi-
nating the fourth-largest orthopedic products provider (Biomet),
Zimmer—a runner-up to Johnson & Johnson—is limiting implant
choices at hospitals, thus potentially slowing price cuts.
“Importantly, it should help alleviate pricing pressure in hips
and knees, given that the market is going from five major players
to four,” Larry Biegelsen, a Wells Fargo analyst, wrote in a note
last year.“This should benefit all ortho[pedic] players.”
It mainly will benefit Zimmer, though. The merger is expected
to save the company $135 million in the first year and $270 mil-
lion by the third year, a cache that is likely to result in $1.15 to
$1.25 per share in earnings during the first year. Net sales for the
combined firm are estimated at $8.4 billion.
Zimmer spent more than a year seeking approval of the deal,
first satisfying European regulators with the April 2015 sale of
three product lines to Italian orthopedic device maker Lima Cor-
porate (For details on the deal’s timing, see the sidebar on page 52).
The agreement included rights to Zimmer’s Unicompartmental
High Flex Knee and Biomet’s Discovery Elbow System in the Eu-
ropean Economic Area and Switzerland, as well as Biomet’s Van-
guard Complete Knee System in Denmark and Sweden.
A foreign bribery investigation into Biomet’s business rela-
tions in Brazil and Mexico threatened to quash the deal, but the
two companies made it official in late June after Zimmer agreed
to divest its Unicompartmental High Flex Knee to Smith and
Nephew plc in the American market to secure U.S. Federal Trade
Commission approval.
4. Smith & Nephew
$4.62 Billion
KEY EXECUTIVES:
Olivier Bohuon, CEO
Mike Frazzette, President, Advanced Surgical Devices
Glenn Warner, President, Advanced Wound Management
Gordon Howe, President, Global Operations
Cyrille Petit, Chief Corporate Development Officer
Arjun Rajaratnam, Chief Compliance Officer
Brad Cannon, President, Global Orthopedic Franchises
NO. of EMPLOYEES: 14,000
HEADQUARTERS: London, United Kingdom
46 • ODT odtmag.com July/August 2015
I
t seems like 2014 was all about the art of the acquisition. Lon-
don-based Smith & Nephew plc was one of the first medtech
companies to announce a blockbuster deal.
In February, company officials unveiled plans to buy Austin,
Texas-based sports medicine company ArthroCare Corp. for $1.7
billion. ArthroCare made products used in arthroscopic surgery
on shoulders and knees, focusing on soft-tissue surgery, making
devices, instruments and implants that improve surgical proce-
dures, including a radiofrequency technology that dissolves soft
tissue with less damage than traditional heat-driven processes.
Calling the deal “compelling” at the time, Olivier Bohuon,
CEO of Smith & Nephew, said the buy would “rebalance” Smith
& Nephew in areas of higher growth. He noted that his com-
pany’s sports medicine business currently was growing by a high
single-digit percentage, compared with a low single-digit growth
range for replacement hips and knees.
“We wanted to acquire in high-growth businesses, and sports
medicine is definitely one of them,” he said.
Smith & Nephew officials highlighted when the deal was an-
nounced that cost reductions and additional sales would boost
their firm’s annual profit picture by about $85 million in the third
full year after the purchase is complete. Integration costs would
be around $100 million over a three-year period.
The companies were no strangers to doing business together.
Smith & Nephew’s sports medicine arthroscopic business had
sold ArthroCare’s Colblation RF technology through a licensing
agreement. The acquisition eliminates payments to ArthroCare,
which amounted to approximately $24 million in 2012.
“ArthroCare and Smith & Nephew know each other well
from our licensing and supply arrangements, and this is a natural
transaction for both companies,” said David Fitzgerald, president
and CEO of ArthroCare prior to the completed acquisition. “The
board [of directors] believes that this transaction is in the best
interest of our shareholders.”
Once the deal was closed, Fitzgerald—along with other top
executives—left ArthroCare.
Among the strategic reasons for the purchase that Bohuon
noted, were:
• Creation of a comprehensive resection and repair portfo-
lio with “exciting growth” prospects;
• Combination of ArthroCare’s latest generation of radio
frequency technology and Smith & Nephew’s mechanical
blade portfolio to give customers greater choice; and
• ArthroCare’s shoulder anchor innovation “strongly”
complements Smith & Nephew’s strength in knee repair,
forming an “extensive, integrated portfolio.”
ArthroCare also offered an ear, nose and throat business,
which Bohuon said has development opportunities outside the
United States. ArthroCare also had a small presence in spine,
wound care, urology and gynecology, which aligned with some
of Smith & Nephew’s non-orthopedic businesses.
In January, ArthroCare resolved a long-standing investigation
by the U.S. Department of Justice, paying a $30 million fine to
settle allegations of securities fraud by former management. The
settlement made the buyout more likely, Raj Denhoy, an analyst
at Jefferies LLC, told The Wall Street Journal at the time.
But the road to a finalized deal wasn’t without potholes. As
soon as the deal was announced, a group of ArthroCare share-
holders sued, claiming the deal was undervalued.
Smith & Nephew agreed to pay $12 million to settle the legal
wrangling. ArthroCare investors alleged in lawsuits filed in Wilm-
ington, Del., that the offer didn’t meet what they felt the com-
pany’s value ought to be. The agreed upon price was 6.3 percent
more than ArthroCare’s closing price Jan. 31 in Nasdaq trading.
ArthroCare rose above the takeover price, indicating some inves-
tors might be speculating on a higher offer. Smith & Nephew
settled to avoid the “inconvenience, expense, risk, and distraction
of further litigation,” according to court papers filed on April 10.
Company officials denied all allegations of wrongdoing or liabil-
ity. Shareholders approved the deal in May last year and the pur-
chase was wrapped up on the 29th of that month.
New Product Highlights
With more than 5 percent ($235 million in FY14) of the com-
pany’s revenue going toward research and development, you’d
expect a strong, steady product pipeline—and FY14 certainly saw
its fair share of new technology rollouts and strategic partner-
ships. There were quite a few notable new product milestones for
the 159-year-old company in fiscal 2014.
October saw the launch of the Evos Mini plating system for
complex long-bone fractures of the arm and leg. The system is de-
signed specifically for trauma surgeons, and includes a variety of
mini, flat plates and screw sizes necessary to address both fracture
reduction and short-term fixation while the final, load-bearing re-
pair is being completed. According to Smith & Nephew, a growing
trend among trauma specialists involves reducing long-bone frac-
tures using a mini fragment system designed for either the hand
or foot. However, because the plates in traditional systems are
designed for the more rounded shape of the body’s small bones,
surgeons often have to modify the plates. Because they are meant
to be used on the smaller, thinner bones of the hand and foot, the
screws designed for these systems often are too short to use in
larger, dense long bones such as the thigh or forearm. Organized
into a single tray, each Evos Mini plating system includes three dif-
ferent, color-coded, size modules that offer a variety of up to eight
low-profile plate geometries. Along with the plates, each module
also offers the instrumentation for implementing the correspond-
ing low-profile screw options for cortical, cancellous and osteope-
nic bone. With sizes up to 80 millimeters, the system’s screws also
offer variable-angle locking technology, which allows placement of
a locking screw up to 15 degrees off-axis.
In July 2014, Smith & Nephew entered the forefoot market with
the launch of its Hat-Trick toe repair system. Comprising three
separate repair options, the Hat-Trick system includes products for
metatarsophalangeal ligament repair and reconstruction, a meta-
tarsal osteotomy guide, and a revisable, all-PEEK (polyether ether
ketone) implant for proximal inter-phalanges fusion, also known as
48 • ODT odtmag.com July/August 2015
hammer toe correction. “Although treating lesser toe deformities is
extremely common, getting consistently predictable outcomes has
eluded surgeons worldwide,”explained orthopedic surgeon Charles
Saltzman, M.D., chairman of the system’s scientific advisory board.
“Current standards of treatment are known to have unacceptably
high complication rates. The Hat-Trick system is a new three-part
approach designed to not only treat the deformity, but also the un-
derlying problem that led to the deformity in the first place.”
Also in July, Smith & Nephew signed an agreement with Blue
Belt Technologies, makers of the Navio orthopedic surgical system.
Under this agreement, surgeons using the Navio system will be able
to implant Smith & Nephew’s Journey Uni partial knee. The Navio
System provides surgeons with precise surgical planning and hand-
held robotic-controlled bone preparation for use with partial knee
replacements. Through its advanced, intraoperative navigation, the
system guides the surgeon in optimally placing the implant and bal-
ancing the knee in order to deliver consistent results.
In March, during the annual meeting of the American Acad-
emy of Orthopaedic Surgeons, Smith & Nephew rolled out its
much-anticipated Journey II cruciate retaining (CR) knee re-
placement. The new implant extended the Journey II total knee
system to procedures that preserve the posterior cruciate liga-
ment, which accounts for approximately half of all knee replace-
ment procedures. The Journey II CR knee is designed to restore
more normal motion via the reproduction of both the shapes of
the joint’s hard surfaces and the normal force behavior of the
soft tissues, such as ligament and muscle firing patterns. As a re-
sult, the soft tissue’s readjustment to new shapes and forces af-
ter surgery is minimized, helping to return the patient’s stride to
its natural motion, according to the company. The Journey II CR
knee is made from Smith & Nephew’s Verilast technology, which
is the combination of two wear-reducing materials, proprietary
Oxinium alloy and a highly crosslinked plastic liner.
Also in March, Smith & Nephew announced a partnership with
Dania Beach, Fla.-based OrthoSensor, which develops “intelligent”
orthopedic devices and data services designed to provide quantita-
tive feedback to surgeons and hospitals. OrthoSensor’s Verasense
sensor-assisted surgery technology for soft tissue balancing will be
used when implanting Smith & Nephew’s Journey II and Legion to-
tal knee systems. Smith & Nephew joined other orthopedic implant
manufacturers—Zimmer, Biomet and Stryker, to name a few—in
using OrthoSensor’s technology. Verasense uses sensor technolo-
gies to enable evidence-based surgical decisions regarding compo-
nent position, limb alignment and soft-tissue balance to improve
outcomes in total knee replacement. Historically, soft-tissue balanc-
ing has been accomplished by subjective surgeon feel. According to
OrthoSensor, research shows that patients whose knees have been
balanced with its system report less pain and experience greater im-
provements in function, activity levels and satisfaction postopera-
tively. At year-one, 97 percent of patients whose knees were quan-
tifiably balanced using Verasense sense said they were “satisfied” to
“very satisfied” with the outcome of their total knee arthroplasty,
which the company points to as a“marked improvement”compared
to the average 81 percent satisfaction reported following traditional

surgery without the Verasense technology.
In February, the company launched its Polarstem cementless stem
for total hip replacement in the United States. Available outside the
United States since 2002, the implant is one of the company’s most
popular stems globally and features a unique geometry and surface
texture. Polarstem earned 510(k) clearance from the U.S. Food and
Drug Administration (FDA) in October of 2013. Polarstem implant of-
fers several design features that assist with muscle sparing approaches
for U.S. surgeons who use the direct anterior approach for total hip
replacement. For example, the proximal portion of the stem is wider
to help reduce the possibility of movement downward into the bone.
The distal portion of the stem is shorter and features a narrower tip,
making it easier to implant through the smaller incision used in the
direct anterior approach. Lastly, the stem features an advanced surface
texture of titanium plasma and a hydroxyapatite layer.
Verilast technology is a low-friction bearing couple combining
Oxinium oxidized zirconium, a patented ceramicized metal alloy
for the femoral head, and a cross-linked polyethylene (XLPE) cup
liner for the acetabulum. During lab testing, Verilast technology
demonstrated 67 percent less wear than the combination of cobalt
chrome and XLPE. With the direct anterior approach, an incision
is made on the front of the hip rather than the side or back. As a
result, the surgeon can follow the natural spaces between the hip
joint’s muscles and tendons, thereby minimizing the damage to the
July/August 2015 odtmag.com ODT • 49
Top Companies
surrounding soft tissues. Because there is less soft tissue that needs
to heal, patients undergoing direct anterior hip surgery reported
less postoperative pain. Additionally, because the gluteal muscles
and other natural stabilizers are left undisturbed during the direct
anterior approach, it is possible for patients to regain mobility more
quickly and ultimately go home from the hospital sooner.
Financial Details
For fiscal 2014 (ended Dec. 31), revenue was $4.62 billion, an in-
crease of 2 percent on an underlying basis and 6 percent on a
reported basis (2013: $4.35 million). Acquisitions added 5 percent
to the reported growth rate, while currency was responsible for a
1 percent negative impact on growth.
“Our 2014 performance reflects the choices we have made to
invest in transforming the growth profile of Smith & Nephew,”
noted CEO Bohuon in a prepared statement. “We improved our
existing businesses, driving a sustained improvement in U.S. hip
and knee implants and building rapidly in the emerging markets.
We strengthened our higher growth platforms, acquiring Arthro-
Care to give us a broader sports medicine portfolio. We created
new growth platforms with the mid-tier portfolio and Syncera
disruptive models that fulfill unmet customer needs, and ad-
vanced wound bioactives again delivered double-digit growth.”
The Advanced Surgical Devices (ASD) division delivered 2014
revenue of $3.29 billion, up 3 percent (2013: $3.02 billion). Rev-
enue was up 2 percent in the United States to $1.56 billion, flat in
“other established markets” at $1.23 billion, and up 17 percent in
the emerging and international markets to $511 million. All fran-
chises contributed to improved performance with revenue growth
in knee implants up 2 percent to $654 million; hip implants up 1
percent to $873 million; trauma and extremities up 4 percent to $506
million; sports medicine joint repair up 8 percent to $576 million;
arthroscopic enabling technologies up 1 percent to $542 million; and
other ASD (including ear, nose and throat and gynecology) up 10
percent to $147 million.
The Advanced Wound Management segment is grouped into
disposable wound care products (Advanced Wound Care), elec-
trical equipment for wound therapy (Advanced Wound Devices),
and bioactives (Advanced Wound Bioactives). Sales for Advanced
Wound Management delivered 2014 revenue of $1.32 billion,
down 1 percent on an underlying basis (2013: $1.35 billion). For
Advanced Wound Management, revenue was down 4 percent in
the United States ($454 million) and 2 percent in other estab-
lished markets ($699 million), and up 14 percent in the emerging
and international markets ($166 million). Advanced Wound Care
revenue was down 4 percent ($805 million). Sales of Advanced
Wound Devices were down 9 percent ($192 million), impacted
by the U.S. Renasys hold. Sales of Advanced Wound Bioactives,
however, delivered strong growth, up 15 percent ($322 million).
Smith & Nephew temporarily ceased commercial distribution
Zimmer-Biomet Merger Timeline
A
pril 24, 2014: Zimmer announces plan to purchase
Biomet for $13.35 billion, including the assumption of
net debt. Upon its closing, the deal would create the
industry’s second-largest manufacturer/provider of orthopedic
implants.
May 2014: Zimmer and Biomet boards approve the pend-
ing purchase.
June 12, 2014: The European Commission halts review of
the Zimmer-Biomet union, claiming the company’s submis-
sion lacked some details.
July 2, 2014: The U.S. Securities and Exchange Commission
issues a subpoena requiring Biomet produce documents relating
to “certain alleged improprieties” in the company’s Brazilian and
Mexican operations. Biomet apparently had become aware of those
“improprieties”in October 2013 and had retained lawyers and“oth-
er experts”to investigate.“Based on the results of the investigation,
Biomet terminated, suspended or otherwise disciplined certain
employees and executives involved in the matters, and took certain
other remedial measures,”according to a regulatory filing.
February 2015: Zimmer submits a revised plan to Europe-
an regulators on the Biomet deal. The company contends the
revised proposal is “generally consistent” with one it submitted
in December (2014), which included plans to divest itself of
50 • ODT odtmag.com July/August 2015
of its Renasys negative pressure wound therapy product line in
the United States. This action followed instruction from the FDA
to obtain new regulatory clearances through the premarket no-
tification process with respect to certain design enhancements
made to the systems.
Operating profit for 2014 was $749 million (2013: $810 mil-
lion), reflecting acquisition costs largely relating to ArthroCare,
amortization of acquisition intangibles, and legal and other items
incurred. Profit before tax was $714 million (2013: $802 million).
5. Biomet
$3.22 Billion
A
nd then there were four.
It’s become survival of the fittest in the orthopedic
world, or quite literally, survival of the richest, as multi-
national implant manufacturers exploit their fiscal clout to gain
market supremacy. Responding to a shifting healthcare land-
scape defined by cost pressures, shrinking reimbursement rates
and customer demands for fewer product choices, orthopedic
device firms are transforming themselves into “one-stop shops”
to boost their appeal to hospital clients.
some European assets.
March 25, 2015: Japan Fair Trade Commission clears the
Zimmer-Biomet deal.
March 30, 2015: The European Commission gives its bless-
ing to the acquisition provided that Zimmer divests a knee
implant business in the European Economic Area and Biomet
sells an elbow implant unit in the region as well as a knee im-
plant business in Denmark and Sweden.
April 17, 2015: Zimmer sells its Unicompartmental High
Flex Knee and Biomet unloads its Discovery Elbow System and
Vanguard Complete Knee System to Lima Corporate to sat-
isfy European regulators’ conditions for merger approval. The
agreement with Lima becomes effective upon the Zimmer-
Biomet deal’s closing.
June 24, 2015: Zimmer receives U.S. Federal Trade Com-
mission clearance for its merger with Biomet after agreeing to
sell its Unicompartmental High Flex Knee system in the U.S.
market to rival Smith & Nephew plc. The acquisition officially
closes, and Zimmer Biomet Holdings Inc. is born.
June 29, 2015: Zimmer Biomet Holdings Inc. begins trading
on the New York Stock Exchange under the ticker symbol ZBH.
The company’s new tagline is “Your progress. Our promise.”
— ODT

Such metamorphoses have become quite common in the last de-
cade, with major players like Smith & Nephew plc buying Plus Ortho-
paedics and ArthroCare Corp., Stryker Corp. merging with Orthovita
Inc., Tornier N.V. purchasing Wright Medical Group, and Johnson &
Johnson (through its DePuy subsidiary) snagging Synthes Inc.
Zimmer Holdings Inc. finally jumped on the mega-merger band-
wagon last spring, offering $13.35 billion for Biomet Inc.“We believe
that current demographic and macroeconomic trends affecting the
healthcare industry will reward companies that successfully partner
with other key stakeholders to improve patient care in a cost-effec-
tive manner. Together with Biomet we will expand the scope of our
innovation programs and will enhance our efforts to provide inte-
grated services and comprehensive solutions that address the needs
of our customers. At the same time, we believe that this merger will
further support our long-term growth and stockholder value cre-
ation strategies,” Zimmer President and CEO David C. Dvorak said
when the merger was announced in April 2014.
It took Zimmer more than a year to officially close the deal,
having been forced to satisfy American and European regulators
with several product line divestitures. In late June 2015, however,
the two separate companies became one, and the newly named
Zimmer Biomet began trading on the New York Stock Exchange
on June 29. (For more details on the merger’s logic, turn to the Zim-
mer listing on page 42).
July/August 2015 odtmag.com ODT • 51
Top Companies
Zimmer’s Chief Financial Officer (CFO) James Crines and
Asia Pacific President Stephen Ooi both retired following the
deal’s closing, but Crines continues to serve in an advisory role.
Dvorak now is president/CEO of the combined company,
which is organized around three business units led by 12 ex-
ecutives who report directly to him. These include the heads of
business units, geographic regions and functional areas. Two of
the three business heads reporting to Dvorak come from Biom-
et: Adam Johnson, group president for the Spine, Microfixation,
Bone Healing and Dental businesses; David Nolan, group presi-
dent for the Sports Medicine, Extremities, Trauma, Biologics and
Surgical businesses; and Daniel Williamson, group president for
the Knee, Hip and Bone Cement businesses.
Among the three geographical leaders named, two hail from
Zimmer and one from Biomet. Of the six functional area heads,
four are from Zimmer and two are from Biomet. These include
David Florin as senior vice president and CFO; he was previously
Biomet’s CFO.
Biomet’s final earnings report was a crowd-pleaser, as con-
solidated net sales rose 5 percent to $3.2 billion in the fiscal year
ended May 31, 2014.
U.S. net revenue increased 5.8 percent to $1.97 billion, while Eu-
ropean proceeds jumped 8.7 percent (4.8 percent in constant cur-
rency) to $772.0 million. International sales (comprising primarily

Canada, Latin America and the Asia Pacific region) barely budged,
inching up just 0.1 percent (9.3 percent in constant currency) to $481
million. Preliminary special items, after tax, totaled $383.3 million
during FY14, compared to $964.1 million during FY13.
Operating income was $313.2 million compared to an operating
loss of $164.5 million during the previous fiscal year. Excluding spe-
cial items, adjusted operating income totaled $863.8 million during
FY14, compared to $837.6 million during the prior year period.
Net income was $36.8 million, compared to a net loss of
$623.4 million during the prior year. Excluding special items, ad-
justed net income totaled $420.1 million.
Excluding special items, adjusted EBITDA (earnings before
interest, taxes, depreciation and amortization) during fiscal 2014
totaled $1.078 billion compared to $1.03 billion in 2013.
Preliminary reported cash flow from operations came to $529.0
million. Free cash flow (operating cash flow minus capital expen-
ditures) was $300.3 million, which included $347.4 million of cash
interest paid during the year, compared to a free cash flow of $264.5
million during FY13, including $388.6 million of cash interest paid.
Biomet briefly experienced a role reversal, having acquired
Lanx Inc., a full-service spine company roughly six months be-
fore it was purchased itself. At the time, the merger expanded
Biomet’s spine technology portfolio through the addition of such
products as the Timberline Lateral Approach Fusion System and
the Aspen Minimally Invasive Fusion System. Both items com-
plemented Biomet’s spine offerings, including the Lineum OCT
Spine System, Maxan Anterior Cervical Plate system, Cellentra
VCBM and the Polaris Translation Screw System.
“This is an exciting opportunity for Biomet to improve its
competitiveness in the spine market by leveraging the best as-
pects of each company and adding strategically important tech-
nologies to our product portfolio,” former Biomet president/CEO
Jeff Binder said.
Some of Biomet’s final product releases included the ePAK Sin-
gle-Use Delivery system and the Juggerknotless Soft Anchor Device.
Biomet released the ePAK single-use delivery system, an in-
novation for internal fracture fixation, in July 2013. The system is a
pre-sterilized, single-use procedure pack that aims to add value by
addressing the productivity needs of the operating room by helping
to save time, reduce cost, improve efficiency, and ultimately increase
productivity. The ePAK system addresses distal radius fractures and
features the DVR Crosslock implant and instrumentation.
In July 2014, Biomet’s sports medicine subsidiary launched the
Juggerknotless soft anchor device, an innovation the company
claimed was the first all-suture, knotless product on the market.
Used for labral repair surgery in the shoulder, the Juggerknotless
Soft Anchor Features:
• The benefits of all-suture anchor technology, which
eliminates the use of a hard implant that can fracture and
cause loose bodies in the joint.
• A small, 2,1 millimeter drill hole that preserves bone and
allows more freedom in anchor placement.
• Technology that allows the surgeon to control the tension
of the construct without tying a surgical knot.
52 • ODT odtmag.com July/August 2015
6. Medtronic
Spine
$3.04 Billion ($17B total)
KEY EXECUTIVES:
Omar Ishrak, Chairman & CEO
Gary Ellis, Exec. VP & Chief Financial Officer, Medtronic
Mike Genau, Sr. VP & President, Americas Region, Medtronic
Richard E. Kuntz, M.D., Sr. VP & Chief Scientific, Clinical and
Regulatory Officer, Medtronic
Chris Lee, Sr. VP & President, Greater China Region, Medtronic
Stephen N. Oesterle, M.D., Sr.VP, Medicine & Technology, Medtronic
Luann Pendy, Sr. VP, Global Quality, Medtronic
Rob Ten Hoedt, Exec. VP & President, Europe, Middle East and
Africa Region, Medtronic
Bob White, Sr. VP & President, Asia Pacific Region, Medtronic
Geoff Martha, Exec. VP & President, Medtronic Restorative
Therapies Group
Doug King, President, Medtronic Spine
NO. of EMPLOYEES: 5,000
HEADQUARTERS: Memphis, Tenn.
W
ithout a doubt, Medtronic is a company of firsts.
Most of its milestones, of course, are breakthroughs in
healthcare technology—the first battery-operated exter-
nal pacemaker (1957); the first commercially produced implantable
pacemaker (1960); the first implantable, programmable neurostimu-
lation device for chronic pain (1983); the first implantable cardioverter
defibrillator (1993); the first insulin pump with real-time glucose
monitoring (2006); and there are many other examples, in innovation
as well as in the company’s far-reaching philanthropic work.
But 2014 saw another—and perhaps less auspicious, depend-
ing upon your point of view—first for the world’s largest stand-
alone medical device company. With its nearly $50 billion pur-
chase of Dublin, Ireland-based Covidien plc, Medtronic pulled
off the largest-ever “inversion” deal (at the time) in U.S. history.
Medtronic Inc., once headquartered just outside Minneapolis in
Fridley, Minn., became Medtronic plc, now rooted in its acqui-
sition’s base in Dublin. Inversion deals are structured to reduce
U.S. income taxes and typically involve a U.S.-based company
acquiring a foreign firm and relocating there for tax purposes.
The deal for Covidien was announced in June 2014, just after
the start of Medtronic’s 2015 fiscal year. The deal was completed
in January this year. The cash-and-stock transaction was valued
at approximately $49.9 billion, based on Medtronic’s closing
stock price of $75.59 per share on Jan. 26. Under the terms of the
transaction, each ordinary share of Covidien outstanding as of
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the closing was converted into the right to receive $35.19 in cash
and 0.956 percent of an ordinary share of Medtronic plc. Each
share of Medtronic Inc. common stock outstanding as of the clos-
ing was converted into the right to receive one ordinary share of
Medtronic plc. (Editor’s note: Though ODT’s Top Company ranking
is compiled using fiscal 2014 figures, our coverage of Medtronic in this
issue in large part will examine the company’s history-making pur-
chase, which happened in the company’s 2015 fiscal year. And though
not specific to the company’s spine business, the purchase of Covidien
is significantly transformative for the company as a whole and worth
chronicling here.)
According to Joanne Wuensch, an analyst with BMO Capital
Markets in New York, N.Y., the deal for Covidien puts Medtronic
in a better position to negotiate with hospital administrators, a
group that has gained purchasing power as doctors increasingly
become employees and hospitals limit what brands they carry.
The expanded Medtronic will have offerings in six of the top 10
purchasing arms of the hospital, she said.
“They can go in not just with a bucket of products as they have
previously, but with a full buffet table,” she told Bloomberg Busi-
ness after the deal was completed.“It does facilitate the partnership
between the device manufacturers and the hospital providers, be-
ing able to make more purchases from a fewer number of sellers.”
Despite moving overseas to seek a lower tax rate, Medtronic
officials said they would spend an additional $10 billion over the
next decade in investments, acquisitions and research and devel-
opment in the United States (in part, from the tax savings, ac-
cording to the company). The company’s headquarters will move
to Ireland, but officials said it would retain its facilities in Minne-
sota—and largely be run from there, as most of its executives will
continue to be based in the Gopher State.
When the deal was announced, Richard Cohen, a retired Twin
Cities stockbroker and decades-long Medtronic investor, noted
that Medtronic’s effective departure from Minnesota felt like a
slap in the face to a state that nurtured it in its initial stages with
funding and investment.
“The thing that bothers me the most is that this is a Minneap-
olis-based company that depended on the Minnesota investment
community for its initial financing, that attracted investment
from Minnesota investors first,”Cohen told the Minneapolis Star-
Tribune newspaper. “The ones that were there in the beginning
are the ones that are going to get screwed.”
Omar Ishrak, Medtronic’s CEO, took a much broader view of
the deal.
“The medical technology industry is critical to the U.S. econo-
my, and we will continue to invest and innovate and create well-
paying jobs,” Ishrak said in a statement. “These investments ulti-
mately produce new therapy and treatment options that improve
or save lives for millions of people around the world. We are excited
to reach this agreement with Covidien, which further advances our
mission to alleviate pain, restore health and extend life for patients
around the world. This acquisition will allow Medtronic to reach
more patients, in more ways and in more places.”
Many U.S. lawmakers were not convinced. Medtronic’s pur-
54 • ODT odtmag.com July/August 2015
chase of Covidien along with other similar deals where domestic
companies use mergers to reincorporate overseas for tax reasons
created consternation on Capitol Hill. U.S. lawmakers moved
swiftly to block such efforts.
“These transactions are about tax avoidance, plain and sim-
ple,”Sen. Carl Levin (D-Mich.) said in a prepared statement.“Our
legislation would clamp down on this loophole to prevent corpo-
rations from shifting their tax burden onto their competitors and
average Americans.”
In September, the U.S. Treasury Department announced tax
restrictions that would make it harder and more expensive for
U.S. companies to reincorporate abroad.
The measures included the prohibition of financial maneuvers
called “cash boxes” and inversions, and they would prevent “hop-
scotch” loans that allow American firms to access foreign cash
without paying U.S. taxes.
“This action will significantly diminish the ability of inverted com-
panies to escape U.S. taxation,” U.S. Treasury Secretary Jacob J. Lew
said after the department’s announcement. “For some companies
considering deals, today’s action will mean that inversions no longer
make economic sense.”
Venture capitalists also expressed concern over the blockbust-
er deal. Large mergers such as this only consolidate the medtech
market more, leaving less space for small companies, and less
opportunity for small startups to find buyers.
“The impact of this [deal] will be felt for many years,”Mir Im-
ran, chairman of medical technology accelerator InCube Labs,
told The Wall Street Journal. Imran has launched 19 companies
since the 1980s, and has done business with both Medtronic
and Covidien.
Last year, Nfocus Neuromedical Inc., a hemorrhagic-stroke
treatment company launched by InCube, was acquired by Covi-
dien, he said.
“Prior to this merger, Covidien was very acquisitive of startup
companies, and Medtronic was also quite active,” he said. “But
post-merger, the new Medtronic will be focused on integrating
the two businesses … so, for the next two or three years, [it] will
be less focused on investing in and acquiring young companies.
For the world of medtech startups, this is not good news.”
Casper de Clerq, a partner at Norwest Venture Partners who
has been investing in medical technologies for more than two
decades—and whose firm last year invested alongside Medtronic
in a $20 million Series D round for sinus-implant company In-
tersect ENT Inc.—said that certain areas of emerging medical
technology could be hit especially hard by a merger that, at least
temporarily, takes two major buyers off the grid.
In October, the company reiterated, despite government ac-
tion, that the deal was still a strategic one, including the belief
that the combination would “support and accelerate” Medtronic’s
three strategies of:
• Therapy innovation: With its expanded portfolio of
products and services and ability to accelerate strategic
investments and investments in technology, the “new”
Medtronic would be a preeminent leader in develop-

ing, investing in and delivering therapy and procedural
innovations to address the major disease states impacting
patients and healthcare costs in the United States and
around the world;
• Globalization: With a presence in more than 150 coun-
tries, the combined entity would be better able to serve
global market needs. Medtronic and Covidien have
combined pro forma revenues of approximately $27 bil-
lion including approximately $13 billion from outside the
U.S., of which $3.7 billion comes from emerging markets.
Covidien’s capabilities in emerging market research and
development (R&D) and manufacturing, joined with
Medtronic’s clinical expertise across a much broader
product offering, significantly increases the number of at-
tractive solutions the new company would be able to offer
globally; and
• Economic value: Medtronic has adopted an intense focus on
aligning with its customers to create more value in health-
care systems around the world by combining products, ser-
vices and insights into solutions aimed at expanding access
and reducing healthcare costs. With Covidien, Medtronic
would be able to provide a broader array of complementary
therapies and solutions that can be packaged to drive more
value and efficiency in healthcare systems.
July/August 2015 odtmag.com ODT • 55
Top Companies
Officials noted the combination would also result in the diver-
sification of Medtronic’s revenue base due to a stronger founda-
tion in emerging-market R&D and manufacturing and the addi-
tion of industry-leading capabilities and expertise in general and
advanced surgery and patient monitoring.
Medtronic also revealed the proposed management structure
of the new company. The new Medtronic is composed of four
major business segments, headed by Medtronic’s three existing
group presidents plus Covidien group president Bryan Hanson.
The four segments are Medtronic’s Cardiac and Vascular Group,
valued at $8.8 billion; its Restorative Therapies Group (which
includes the company’s spine business) worth $6.5 billion; its
Diabetes Group, worth $1.7 billion; and the fourth, the Covidien
Group (which was quickly renamed the Minimally Invasive Ther-
apies Group not long after the merger closed), currently valued
at $10.4 billion. Covidien’s neurovascular business will function
as an independent business under the umbrella of Medtronic’s
restorative therapies group. The company also announced four
geographic regions around which the combined company will
operate: Asia Pacific, the Americas, EMEA (Europe, the Middle
East and Africa) and Greater China—down from Medtronic’s
present seven regions.
“While we will move to four regions in the future—versus the
seven regions represented in the Medtronic structure today—this is
in no way intended to reflect a diminished importance or focus on
those markets that previously served as regions, nor will I remain
any less focused on seeing that these markets reach their potential
and objectives,” Ishrak said. “Rather, this approach will ensure we
have the appropriate leadership involvement in these markets on a
daily basis as we grow our overall scale and complexity.”
Spinal Adjustment
Medtronic’s spine business may have taken a bit of a sales hit
in 2014, but the company continues to stand firmly behind its
portfolio of back-saving products. In the last few years, CEO
Ishrak repeatedly has denied that the company is exploring ways
to divest its spine business, though the business continues to be
under pressure—particularly with smaller companies nipping at
its heels—and core technology. For example, startup firms such
as Santa Clara, Calif.-based Benvenue Medical, are challenging
their larger competitors. Recent clinical trial results showed that
Benvenue’s Kiva VCF System—which has U.S. Food and Drug
Administration (FDA) clearance—to treat vertebral compression
fractures performs as well as or is better than Medtronic’s KyphX
kyphoplasty system.
Medtronic’s lineup of spine technology includes artificial
cervical discs, balloon kyphoplasty devices, biologic fusion sys-
tems, minimal-access spine technologies, and reconstructive
spinal systems.
An artificial disc is a prosthetic device inserted between the
vertebrae to replace a natural spinal disc. It is designed to pre-
serve mobility throughout the treated vertebral segment.
Balloon kyphoplasty is minimally invasive procedure for re-
pairing vertebral compression fractures in the spine caused by
osteoporosis or cancer. The procedure uses balloons designed to
restore the vertebral body height. Bone cement is inserted into
the vertebral body to stabilize the fracture.
Biologic fusion systems consist of two elements. The first is
a bone graft (such as InFuse), a bone morphogenetic protein
(BMP) that stimulates the body to regrow bone that will fuse, or
join, two vertebrae together to stabilize the lumbar spine. It elimi-
nates the need to harvest bone from another area of the patient’s
body, such as the hip, thus eliminating an additional, often pain-
ful, surgery. The second element is a small, hollow metal cylinder,
called a cage, that holds the biologic material and restores the
degenerated disc space to its original height. It helps to relieve
the pressure on nerves, which is commonly associated with back
and/or leg pain.
Minimally invasive spine surgery is performed through small-
er incisions than traditional open surgery and may lead to de-
creased muscle trauma, less intraoperative blood loss, and shorter
hospital stays. Minimally invasive surgery can be percutaneous
(through the skin) or mini-open (operating through a small inci-
sion), and can be used to treat all areas of the spine.
Reconstructive spinal systems include screws, rods, and con-
nectors that are implanted along the affected area of the spine to
provide support for a spinal fusion. A spinal fusion is simply the
uniting of two bony segments, whether a fracture or a vertebral
56 • ODT odtmag.com July/August 2015
joint. The instrumentation acts as an“internal cast”to stabilize the
vertebra until the fusion, or bony re-growth, can occur.
Spine sales for fiscal year 2014 were $3.04 billion, a decrease
of 3 percent compared to the prior fiscal year. The decrease in
sales for FY14 primarily was driven by declines in bone morpho-
genetic protein (BMP/InFuse) products and balloon kyphoplasty
products (BKP) of 11 percent and 9 percent, respectively, and un-
favorable foreign currency translation. Net sales in BKP for fiscal
year 2014 declined 9 percent compared to the prior fiscal year due
to increased competition, pricing pressures, and reimbursement
challenges with select payers.
InFuse had been a major source of revenue growth for
Medtronic until 2011, when an article in the Spine Journal, pub-
lished by NASS, suggested that Medtronic had covered up risks
of BMP, including higher-than-expected incidence of cancer,
and encouraged off-label use. The Spine Journal publication led
to a 2,300-page report from the U.S. Senate Finance Commit-
tee documenting efforts by Medtronic to influence early studies
of InFuse to downplay cancer risks. Following this, InFuse sales
took a dive. Before the Journal article, InFuse had revenue close
to $1 billion a year. For FY14, Medtronic had only $471 million in
InFuse sales.
There might be a little light at the end of the InFuse tunnel,
however. According to data released during the North American
Spine Society (NASS) annual meeting last November in San
Francisco, Calif., InFuse is safe for most patients though it in-
creases risks of cancer when used in high doses with high-risk
patients. Doctors can mitigate those risks, based on the analy-
sis, an expert said during a presentation. Data was presented at
NASS by Wellington Hsu, M.D., director of orthopedic surgery
research at Northwestern University in Chicago, Ill. Hsu pre-
sented the results of his examination of several large-scale stud-
ies. Hsu’s research was based on a survey of half a dozen studies
covering many thousands of patients and supports Medtronic’s
assertions that InFuse doesn’t increase cancer risks when spinal
surgeons use it appropriately.
“My conclusion is that InFuse, when used judiciously and re-
sponsibly, does not increase your risk of cancer. But that there are
[cancer] mechanisms that we need to be aware of,” Hsu said. “I
would still not recommend using BMP in somebody who has a
history of cancer. But I believe that it is safe to use in proper doses
in the general population.”
Hsu said the risk of cancer in InFuse patients seems to have
dropped off as physicians became aware that BMP should not be
used in patients with a history of cancer.
“The complications that we used to see regarding BMP were
probably a result of not understanding the potency of the prod-
uct,” he said. “Now that we have a better understanding, we are
not seeing as many of these complications anymore.”
Past studies found that many doctors used the device for pro-
cedures at higher doses than sanctioned by the FDA.
Medtronic has set aside hundreds of millions of dollars to po-
tentially resolve nearly 5,000 patient claims alleging injuries due
to InFuse implants. Medtronic recorded expenses of $37 million
 Top Companies

and $140 million in fiscal years 2015 and 2014, respectively, re-
lated to InFuse. In addition, investors have filed lawsuits claiming
that the company harmed its value with the handling of InFuse.
On top of that, last summer, health insurance company Humana
filed a racketeering lawsuit alleging Medtronic had promoted
InFuse for uses not approved by the FDA. The lawsuit cites the
Racketeer Influenced & Corrupt Organizations statute, com-
monly called RICO, and was filed in Tennessee Western District
Court. “Defendants paid for and sponsored publication of aca-
demic and peer-reviewed literature that falsely represented In-
Fuse and [recombinant bone morphogenetic protein-2] as safe
and effective for uses not approved by the Food & Drug Admin-
istration. Defendants knew or should have known that Humana
would rely on the fraudulent literature to pay for Infuse and/or
BMP,” according to text from the suit.
For the third quarter of 2015 (ended Jan. 23), BMP revenue
was $122 million, up 9 percent. For the final quarter of the com-
pany’s fiscal 2015 (ended April 24), BMP revenue was up mid-
single digits, though overall spine sales for the year continued
their slide (see overall company results for the most recent fiscal
year below).

Recent Noteworthy Product Rollouts

• The Prestige LP Cervical Disc System for the treatment
of single-level cervical disc disease (radiculopathy and/or
myelopathy) is the third clinically proven artificial cervi-
cal disc in the Medtronic portfolio and builds upon the
same design principles as the original Prestige Cervical
Disc introduced in 2007. While incorporating the same
ball-and-trough articulation, which is designed to allow
the two components to move with respect to one another
in a range of motions, including bending, rotation and
translation, the LP Disc represents a departure from the
original stainless steel device in terms of materials and
fixation mechanism. Instead of using bone screws to at-
tach to the vertebral bodies as in the original design, the
LP design incorporates two rails positioned off midline
that press-fit into two pre-drilled holes created during the
surgical procedure. In addition, the LP Disc is composed
of a proprietary titanium-ceramic composite that has been
shown to have a lower wear rate and produce less scatter
on postoperative magnetic resonance imaging than stain-
less steel.
• In September 2014, the company launched the Kyphon
Express II Balloon Kyphoplasty Platform, which includes
the next-generation Kyphon Cement Delivery Sys-
tem. The new platform is the latest advancement from
Medtronic in the BKP technology for the treatment of
vertebral compression fractures. The new system features
a maximum pressure rating of 700 psi, providing the
treating physician a more powerful option for reducing
fractures, according to the company. The new system also
gives physicians the option of using the cement resistant
technique, which allows one balloon to remain inflated

July/August 2015 odtmag.com ODT • 57

 during contralateral cement fill, helping to maintain the
goal of fracture reduction. In addition, this system in-
cludes an expanded tools portfolio that is more versatile,
allowing for the treatment of a variety of different levels
of the spine. The Cement Delivery System (CDS) includes
new features designed to increase the efficiency and
precision of delivering bone cement into a vertebral body.
The re-designed cement cartridges can be filled simulta-
neously with a provided T-adapter, increasing procedure
efficiency. In addition, Kyphon CDS has a longer shelf life
for enhanced usability. The CDS continues to allow the
physician to deliver highly viscous bone cement to the
patient from up to 4 feet away from the radiation source
while maintaining tactile feel. It also still includes a Quick
Release Button that provides the ability to halt the flow
of bone cement on demand, giving the physician precise
control over the amount of cement flow.
• In October, Medtronic introduced its Pure Titanium
Coating (PTC) platform of interbody fusion devices for
the spine. The PTC platform includes four products: the
Capstone PTC Spinal System, Clydesdale PTC Spinal
System, Anatomic PEEK PTC Cervical Fusion System
and Cornerstone-SR Ti-Coated Anatomical Cervical
Cage. These devices are used to treat patients experienc-
ing pain caused by compression of the spinal cord or
nerve roots by helping to restore normal disc height. Disc
height restoration may reduce the pressure on the nerve
roots and the spinal cord and help alleviate much of the
patient’s pain. Medtronic’s PTC devices are constructed of
a combination of the two materials most commonly used
in interbody fusion procedures: titanium and polyether
ether ketone (PEEK). Both materials have a long clinical
history of being used in orthopedic and other medical
implants. Surgeons historically have preferred interbody
spacers made of titanium because of their strength and
long clinical history. However, over the last 10 years PEEK
has largely replaced titanium as the material of choice
because it has a modulus of elasticity that is similar to hu-
man cortical bone and it does not show up on X-rays. This
radiolucency enables the surgeon to more easily assess
the surgical site over time after surgery. With the applica-
tion of a thin layer of textured pure titanium about 1/10th
of a millimeter thick to the top and bottom of each PEEK
implant, the PTC devices possess attributes of both PEEK
and titanium. Specifically, as demonstrated in mechanical
testing compared to PEEK alone, the pure titanium coat-
ing has a greater coefficient of friction. Additionally, this
textured coating increases the surface area of the implant,
which means there is more area for bone to come into
contact with the surface of the implant. Yet, the titanium
layer is thin enough that it does not change the radiolu-
cency or mechanical properties of the underlying PEEK
implant. Capstone PTC and the Clydesdale PTC received
FDA 510(k) clearance in March 2014 and launched in the
58 • ODT odtmag.com July/August 2015
United States in August last year. CE mark was received
for both systems in July last year. Capstone is expected to
launch in Japan in November and Clydsdale is expected
to launch in Japan in January 2016. Anatomic PEEK PTC
received FDA 510(k) clearance and launched in the United
States in September. Cornerstone-SR Ti-Coated Anatomi-
cal Cervical Cage received a CE mark and launched in
Western Europe in July last year.
• Medtronic received FDA 510(k) clearance and launched
the Shilla Growth Guidance System. The system is
designed for treatment of skeletally immature pediatric
patients less than 10 years of age diagnosed with severe,
progressive, life-threatening, early-onset spinal deformi-
ties. The system is a new growth-sparing technology that
allows correction of the deformity while maintaining the
corrections over time, minimizing the need for periodic
lengthening procedures. This is different than current
operative treatments, which are distraction-based systems
that require lengthening every six to nine months.“Early
onset scoliosis is extremely difficult to treat. The current
gold standard technique to manage scoliosis long-term
is to fuse the spine, but in children who are still growing
this can have serious complications,” said Richard Mc-
Carthy, M.D., an orthopedic surgeon and faculty mem-
ber at the University of Arkansas for Medical Sciences/
Arkansas Children’s Hospital, and inventor of the device.
“Until now we were only able to offer operations which
use implants to stabilize the curve in the spine, but these
frequently mean twice-yearly surgeries as a child grows.
The clearance of the Shilla Growth Guidance System
marks the first time we can offer effective management
of the curvature of the spine while still harnessing the
child’s natural growth.”The system uses a unique non-
locking set screw at the proximal and distal portions of
the construct’s rods. This specific feature allows the rod to
slide through the screw heads as the child’s spine grows,
while still providing correction of the spinal deformity.
The device received CE mark in 2012.
New Division Chief
In June this year, Medtronic named Geoff Martha as executive
vice president and president, Medtronic Restorative Therapies
Group. Martha replaced Christopher J. O’Connell, who was
selected to become CEO of a public company. Martha joined
Medtronic in 2011, most recently serving as senior vice presi-
dent of corporate strategy and business development, global
communications and Medtronic philanthropy. Prior to joining
Medtronic, Martha served as managing director of business
development at GE Healthcare, where he was responsible for
global business development efforts, including acquisitions, di-
vestitures, joint ventures and equity investments. In his 19-year
career with GE, Martha held several leadership roles in busi-
ness leadership, corporate development, strategic marketing,
and sales management.
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Round Rock, TX 78681
Phone: 512-255-1477
Fax: 512-388-3606
E-mail: D.Donovan@CentexMachining.com
Web: www.centexmachining.com

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July/August 2015 odtmag.com ODT • 59

Overall Numbers
For Medtronic across the board, the company reported fiscal year
2014 revenue of $17 billion, an increase of 4 percent on a constant
currency basis after adjusting for a $175 million negative foreign
currency impact, or 3 percent as reported. As reported, fiscal year
2014 net earnings were approximately $3.1 billion or $3.02 per
diluted share, a decrease of 12 percent and 10 percent, respec-
tively. The Cardiac and Vascular Group (cardiac rhythm disease
management, coronary, structural heart and endovascular) post-
ed sales of $8.9 billion (up 2 percent). The Restorative Therapies
Group (spine, neuromodulation and surgical technologies) re-
corded $6.5 billion in revenue (also up 2 percent). The Diabetes
Group had $1.7 billion in sales (flat compared to FY13). Overall
company sales for FY15 were $20.3 billion. Spine sales dipped 2
percent to $2.97 billion.
7. DJO Global
$1.23 Billion
KEY EXECUTIVES:
Michael P. Mogul, President, CEO & Director
Toby Bost, President, DJO Global Consumer Business
Susan Crawford, Exec. VP & Chief Financial Officer
Steven Ingel, President, Global Bracing and Supports
Joe McClung, Sr. VP & General Manager, DJO Global Vascular
Gerry McDonnell, Exec. VP, Global Operations
Stephen J. Murphy, President, Sales and Marketing, Interna-
tional Commercial Business
Mike Peters, Exec. VP, Chief Information Officer
Brady R. Shirley, President, DJO Surgical
Sharon Wolfington, President, Global Recovery Sciences
NO. of EMPLOYEES: 5,200
HEADQUARTERS: Vista, Calif.
T
here are so many examples of how the medical device
industry represents the best of American ingenuity. Who
doesn’t love the proverbial story of the big idea that started
in a garage and ended up a billion-dollar business? DJO Global
is the result of just such a humble beginning. The company got
its start in a garage in Carlsbad, Calif., in 1978—founded by the
Philadelphia Eagles’ offensive line captain and a local attorney.
Mark Nordquist and Ken Reed named their new company af-
ter their wives, Donna and Joy; DonJoy was born. The firm’s first
products were simple sleeves made of neoprene that were sewn
together and designed to be pulled over the knee, ankle and/or
elbow for support. Thirty-seven years may have passed, the name
may have changed a little, and a few different owners have come
and gone, but the company’s innovative roots are still intact, sell-
60 • ODT odtmag.com July/August 2015
ing products under more than 10 different brand names. Today,
DJO’s medical devices include rigid and soft orthopedic bracing,
hot and cold therapy, bone-growth stimulators, vascular therapy
systems and compression garments, therapeutic shoes and in-
serts, electrical stimulators used for pain management, physical
therapy products, and reconstructive joint implants for the hip,
knee and shoulder.
A Primed Product Pipeline
In August last year, the company announced the first surgical use
of its e-plus blended vitamin E polyethylene bearing in reverse
shoulder arthroplasty. In 2013, DJO claimed it was the first-to-
market with blended vitamin E polyethylene in a total anatomic
shoulder offering. At the time of the announcement, with the
combination of blended vitamin E polyethylene in both total
anatomic and reverse shoulder product lines, DJO said it was the
only company to offer blended vitamin E polyethylene through-
out an entire shoulder product portfolio.
“We are very pleased to now offer our e-plus vitamin E tech-
nology within the Reverse Shoulder product line. Through our
e-plus offering, we seek to enhance the clinical success across our
shoulder portfolio, including the Turon Anatomic Total Shoulder
and Reverse Shoulder implant families. We now proudly offer e-
plus technology throughout our entire surgical product portfolio,
including knee, hip and shoulder,”said Bryan Monroe, senior vice
president for DJO Surgical.
Unique formulations of e-plus have been optimized to reduce
wear, eliminate oxidation and maintain mechanical properties
in DJO Surgical’s knee, hip and shoulder products as compared
with conventional polyethylene. The e-plus formulation, opti-
mized for DJO Surgical’s reverse shoulder prosthesis, reduces
wear rates by 92 percent while maintaining the yield strength of
conventional polyethylene, according to the company. Officials
say that together, the advancements potentially can lead to un-
paralleled implant longevity.
In 2015, DJO got off to a strong start with new product intro-
ductions and strategic technology acquisitions.
During the American Academy of Orthopaedic Surgeons
(AAOS) annual meeting in March, DJO launched its Exprt Preci-
sion System for knee revision procedures. According to company
officials, the Exprt system “redefines” total-knee revision arthro-
plasty. DJO claims the system’s compact design reduces turn
times, minimizes waste, and has proven implant design technol-
ogy for 40 to 70 percent of the cost of comparable knee revision
systems. A simple, comprehensive two-tray system replaces the
traditional eight-tray setup used during complex, total-knee revi-
sions, which is intended to reduce prep time and eliminate un-
necessary surgical steps.
“The Exprt system offers experienced revision surgeons a
toolkit that matches their skill set,”said Mike Mogul, CEO of DJO
Global.“The makeup of this revision knee allows for streamlined
simplicity at a dramatically lower cost.”
DJO Surgical worked closely with a group of experienced re-
vision surgeons to develop the technology. “The Exprt approach
 Top Companies

leads to efficient operations that save both time and money, while
providing excellent early results,” said C. Lowry Barnes, M.D.,
chairman of orthopedics at the University of Arkansas for Medi-
cal Sciences. “My operating team especially appreciates the fact
that only two pans of instruments are opened. I believe that I can
speak for the entire Exprt design team when I say that we have
met our goals in offering a high-value, high-quality revision knee
system for the accomplished surgeon.”
In addition to Barnes, other early adopter surgeons have tout-
ed Exprt’s cost.
“In today’s value driven health care environment, cost effec-
tiveness is crucial in order to provide stakeholders with a high-
quality result at a reasonable cost,” said Richard Iorio, M.D., a
New York, N.Y.-based joint replacement specialist. “Putting the
patient ahead of profits, the Exprt System allows skilled surgeons
to provide TKA (total knee arthroplasty) patients with a function-
al knee at a fraction of traditional costs.”
DJO Surgical also played a role in the Zimmer-Biomet merger.
The agreement for Zimmer Biomet Holdings Inc. to divest
certain assets was part of U.S. Federal Trade Commission require-
ments prior to Zimmer Holdings Inc. completing its purchase of
Biomet Inc.
DJO Surgical purchased the Biomet Cobalt bone cement, Op-
tivac cement mixing accessories and Discovery elbow system for
the U.S. marketplace.
“These product acquisitions are a part of a broader strategy
to invest in our fast growing implant business,” said Mogul. “We
believe our surgical division is poised to continue its position as
the fastest growing orthopedic implant company. I have always
admired Cobalt bone cement’s color features, which offer bet-
ter visualization and much simpler packaging and the Discovery
elbow is extremely well-regarded.”
The Cobalt bone cement is used with hip, knee, shoulder, el-
bow and other orthopedic implant technologies. Cobalt offers a
complete range of viscosities as well as antibiotic solutions for
enhanced performance and patient safety, according to DJO. The
unique Softpac packaging technology creates a “safer, glassless
environment and the user-friendly Optivac system provide the
best in modern cementing techniques for Cobalt as well as other
cement technologies,” company officials said in a release.
The Discovery elbow will be DJO’s first elbow technology and
adds to the company’s upper extremity portfolio and shoulder ar-
throplasty products. The Discovery elbow has more than 12 years
of successful clinical outcomes.
“This acquisition is very timely for us based on our disruptive
entrance into the revision market with our Exprt revision knee
launched at AAOS this year and the Discovery elbow provides great
breadth to our strong upper extremity portfolio,” said Brady Shir-

What You Should Know Before Selling Your Business

P&M Corporate Finance, LLC

CHICAGO DETROIT
To find out What You Should Know:
Bryan Hughes
312.602.3636
bryan.hughes@pmcf.com
www.pmcf.com
July/August 2015 odtmag.com ODT • 61
p m half page.indd 1 9/4/14 10:54 AM
ley, president of DJO Surgical.“With three major launches planned
across the knee, hip and shoulder segments in each of the next three
years, we are excited about our continued opportunities for growth.”
New Management
DJO Global named Shirley as the new president of DJO Surgi-
cal, a division that makes implants for hips, knees and shoulders.
Shirley has more than 20 years of experience in the orthopedic
industry in a variety of roles, including most recently CEO of In-
novative Medical Device Solutions (IMDS), an organization that
provides product development, manufacturing and supply chain
management solutions for medical devices companies. Prior to
IMDS, he held several key leadership roles, spanning 17 years at
Stryker, which include the president of Stryker Communications
and senior vice president of Stryker Endoscopy. At Stryker Com-
munications and Stryker Endoscopy, Shirley was responsible for
all domestic operations and profit and loss for the Communica-
tions division, as well as global product development and sales
and marketing for Endoscopy, representing approximately $1
billion worldwide. “With DJO Surgical’s current market position
and growth potential; brand momentum, innovation and market
leadership are our most urgent priorities,” said Mike Mogul, DJO
Global’s president and CEO. “Brady’s strong Orthopedic back-
ground and proven track record and ability to develop and lead
top performing teams, drive shareholder value and innovation
will support the outstanding team we already have in place to
transition DJO Surgical to the next level.”
The company also appointed Susan Crawford as the com-
pany’s new chief financial officer. Crawford joined DJO from
Life Technologies Corp., where she most recently served as vice
president of business transformation, responsible for integrating
newly acquired companies and engineering business processes
throughout the broader organization. Crawford also assisted the
Life Technologies board of directors with evaluating strategic
options for the company. Prior to her stint as business transfor-
mation vice president, Crawford was vice president of corporate
finance planning and analysis at Life Technologies, providing fi-
nance leadership on the company’s growth strategy, forecasting
and analysis, supply chain productivity and financial modeling
for mergers and acquisitions. Before being hired by Life Technol-
ogies in 2005, Crawford was chief financial officer for RealNames
and PowerTV, as well as head of investor relations and financial
planning at Covad Communications. Crawford received a bach-
elor’s degree in accounting from Rollins College in Winter Park,
Fla., and an MBA from the University of Central Florida.
Dollars and Cents
DJO recorded sales of $1.23 billion for FY14 (ended Dec. 31), up
4.6 percent year over year. Despite the gain, the company report-
ed a net loss $90.5 million, an improvement compared to a net
loss of $203.5 million in FY13.
“We are pleased to end 2014 with full year constant currency
growth in net sales of 4.8 percent and leveraged adjusted EBITDA
(earnings before interest, taxes, depreciation and amortization)
62 • ODT odtmag.com July/August 2015
growth of 6.6 percent,” said Mogul. “I want to especially con-
gratulate our Bracing and Vascular, Surgical Implant and Interna-
tional teams, for delivering strong organic growth of 6 percent, 15
percent and 9.8 percent, respectively, in 2014.”
Net sales for DJO’s Bracing and Vascular segment for 2014 were
$504.6 million, up 6 percent. Sales for DJO’s Recovery Sciences di-
vision were $299.1 million, down 4.5 percent from 2013. For 2014,
net sales for the International segment were $325.3 million and
increased 9.8 percent. Net sales for the Surgical Implant segment,
driven by strong sales of each of the company’s shoulder, knee and
hip product lines, were $100.1 million, an increase of 15 percent.
8. Integra
LifeSciences
$928 Million
KEY EMPLOYEES:
Peter J. Arduini, President, CEO & Director
Glenn G. Coleman, Corp. VP & Chief Financial Officer
Mark Augusti, Corp. VP & President, Orthopedics and
Tissue Technologies
Kenneth Burhop, Corp. VP & Chief Scientific Officer
Robert T. Davis Jr., Corp. VP & President,
Specialty Surgical Solutions
John Mooradian, Corp. VP, Global Operations and Supply Chain
Dan Reuvers, Corp. VP & President, International
Joseph Vinhais, Corp. VP, Global Quality Assurance
Judith E. O’Grady, Corp. VP, Global Regulatory Affairs
NO. of EMPLOYEES: 3,400
HEADQUARTERS: Plainsboro, N.J.
I
ntegra LifeSciences Holdings Corp. certainly is no newcomer
to the orthopedic business. It may not have as much “history”
as some of the more venerable firms with which it competes
(DePuy Synthes, Stryker Corp., Zimmer-Biomet Holdings Inc.,
Medtronic plc), but that hasn’t stopped the 26-year-old company
from charting a successful growth course through this industry’s
all-too-often complicated and competitive waters.
As was the case for so many firms in the medical device sec-
tor, 2014 was a year of transition for Integra. The company may
have reported solid top- and bottom-line gains for its fiscal year
(ended Dec. 31), but officials with the Plainsboro, N.J.-based firm
chose a path for their company that they claimed would be more
streamlined and profitable.
“During 2014, we made significant progress … and I believe

we are at an exciting and pivotal point in our transformation,”
said Peter Arduini, president and CEO.
What transformation you ask?
In November, the company announced plans to spin off its
spine business and realign its portfolio. Specifically, in 2014, the
company chose to consolidate its five business divisions into
three. Following the spinoff, the company would have a sim-
plified, two-division global structure. Neurosurgery and Instru-
ments were combined worldwide to create a new division called
Specialty Surgical Solutions. Orthopedics and Tissue Technolo-
gies were consolidated globally and include the extremities busi-
ness, comprising small bone orthopedics and wound care. The
portfolio realignment, according to company brass, is part of a
larger transformation strategy that began in 2012 and centers on
“optimizing the business and accelerating growth.”
The spinoff created a new publicly traded company (which
went public on July 1 this year). SeaSpine—the name of a former
Integra acquisition—focuses on spine hardware and orthobiolog-
ics. Integra acquired Vista, Calif.-based SeaSpine in 2011 for $89
million in cash. The company is still based in Vista.
“These strategic changes create a much stronger platform for
organic growth and execution, and we believe both companies
will grow faster separately than together,” said Arduini. “Moving
forward, Integra will have a simpler, more focused structure from
July/August 2015 odtmag.com ODT • 63
Top Companies
which to operate, which should improve our ability to achieve
our longer-term growth and margin improvement objectives.
Further, we believe these moves create exciting opportunities for
our shareholders and both organizations.”
Integra officials said the separation would provide both com-
panies with a faster top-line growth profile; allow the new Sea-
Spine to invest more in top-line growth initiatives such as sales,
marketing and research and development (R&D), and to access
the capital markets; accelerate Integra’s operating margin expan-
sion plans; and unlock equity value for Integra’s shareholders.
SeaSpine’s portfolio consists of spinal hardware solutions,
including unique interbody devices, minimally invasive surgery
solutions, and deformity correction products, as well as IsoTis, a
leading brand in orthobiologics, including a range of osteocon-
ductive and osteoinductive solutions using demineralized bone
and synthetic matrices.
Integra’s board of directors named Kirt Stephenson, former
CEO and co-founder of SeaSpine, as board chairman of the
new SeaSpine.
“I’m excited about the opportunity to create another company
focused on growth through new product development, strategic
acquisitions and partnerships,” said Stuart Essig, Integra’s board
chairman.“As a public company, SeaSpine will have a host of op-
tions to accelerate its growth and effectively invest in new busi-
ness opportunities. The board believes this will be achieved more
fully as a standalone public company rather than through a stra-
tegic merger or divestiture of the business. Further, Rich Caruso,
Integra’s founder, and I personally look forward to remaining
shareholders of both companies.”
Follow the Leader
Early in the year, Integra LifeSciences hired Kenneth Burhop,
Ph.D., as corporate vice president and chief scientific officer
(CSO). Burhop is responsible for setting Integra’s strategic scien-
tific vision and road map, leading the company’s portfolio prioriti-
zation and management, and evaluating corporate development
and new product opportunities. Burhop holds several patents. He
is a scientific expert in various research areas, including wound
healing and wound dressing development. Burhop has extensive
experience in biotechnology and medical device research and
development, including the development of biocompatible ma-
terials, pharmaceuticals and biopharmaceuticals, and electrome-
chanical devices. Prior to Integra, Burhop was chief scientific offi-
cer at Sangart Inc. Prior to joining Sangart, he spent more than 20
years with Baxter Healthcare Corp. in a series of leadership roles,
including most recently vice president of R&D for Baxter Phar-
maceutical Technologies. Before that, Burhop was vice president/
global scientific lead for Baxter’s Medication Delivery Division.
Burhop received his Ph.D. and M.S. in veterinary science as well
as his B.A. in zoology from the University of Wisconsin-Madison.
In April, Integra hired Mark Augusti as a corporate vice presi-
dent and president of the company’s Orthopedics and Tissue
Technologies businesses. Prior to joining Integra, Augusti served
as CEO of Durham, N.C.-based Bioventus—a biotechnology spi-
noff from Smith & Nephew.
“I am pleased that Mark has become a member of our team,”
said Arduini.“With more than 25 years of experience in orthope-
dics, in particular, extremities and biologics, Mark brings a depth
of general management experience and leadership that will be
instrumental to our growth strategy.”
Prior to his time with Bioventus, Augusti spent nine years with
Smith & Nephew in a series of leadership roles, most recently
as president of Smith & Nephew’s Biologic Division, where he
was appointed to lead Smith & Nephew’s new biologics initia-
tive (which became Bioventus). He also served as president of
Smith & Nephew’s Orthopedic Trauma and Clinical Therapies
business and senior vice president and general manager of the
Trauma business. Prior to that, he spent 13 years at GE Medi-
cal Systems, where he held various sales, marketing and strategic
management roles. Augusti received his MBA from UCLA An-
derson School of Management, and his B.S. in computer science
and economics from Duke University.
Signed, Sealed, Delivered
Late in the fiscal year, the company closed on the acquisition of
the product portfolio from Metasurg. The addition of the Meta-
surg product portfolio enhances Integra’s lower extremity product
line. It also offers the opportunity to distribute a biologic allograft
64 • ODT odtmag.com July/August 2015
derived from human placental tissue as a possible complement
to Integra’s wound care product offering, according to Integra’s
leadership. Metasurg was founded in 2005 in Houston, Texas, and
focused on the foot and ankle market. The acquired portfolio in-
cludes the DigiFuse Cannulated Intramedullary Fusion System,
MemoFix Super Elastic Nitinol Staple System, Ti6 screw portfolio,
BioMotion First MPJ Hemi System and TruArch Subtalar Implant
System. In addition to the implants, the acquisition also gave In-
tegra the opportunity to distribute an amniotic product line called
BioFix Regenerative Biologics.
In September, Integra agreed to acquire Medtronic’s Micro-
France and Xomed Manual ENT and laparoscopy instrumenta-
tion lines for approximately $60 million in cash. The MicroFrance
business, which includes Xomed’s Manual ENT instruments, de-
signs, manufactures and sells reusable handheld instruments to
ear, nose and throat (ENT) and laparoscopy surgeons. Under the
terms of the agreement, Integra acquired a portfolio of approxi-
mately 4,000 MicroFrance and Xomed Manual ENT and laparo-
scopic surgical instruments, as well as a manufacturing facility in
St. Aubin le Monial, France. The deal was wrapped up by October.
At the beginning of the fiscal year, the company completed the
acquisition of the DuraSeal product lines from Covidien plc (now
part of Medtronic). The deal, announced in October of 2013, called
for Integra to purchase the Confluent Surgical product lines from
Covidien plc. The brand includes surgical sealants, adhesion bar-
riers, and—most notably—the DuraSeal, which is used in spinal
surgery and applied over stitches to prevent cerebrospinal fluid
from leaking out of the incision site. The technology was approved
by the U.S. Food and Drug Administration (FDA) in 2009. Under
the terms of the agreement, Covidien received an initial cash pay-
ment of $235 million from Integra at the close of the transaction.
Prolific Year for New Technology
Part of the company’s ongoing strategy for expansion has been a
steady release of new technology across all its product categories.
In this area, 2014 was no exception.
In November, the company rolled out a new orthobiologic
implant. The Demineralized Bone Matrix (DBM) Strip implant is
used primarily for posterior lumbar fusion, a surgical procedure
intended to promote bone fusion along the posterior elements of
the spine. Available in two forms, the Integra Shaped Strip and
Integra Pocket Strip are 100 percent human allograft, providing
a natural biologic scaffold with verified osteoinductive potential,
the company claimed. The implant features a deep recess de-
signed to accommodate placement of additional graft material.
When hydrated, the graft is pliable, maintains integrity upon ir-
rigation, and can be contoured to varying patient anatomy.
Also in November, Integra released its Expandable Interbody
System in the United States. The system, which received 510(k)
clearance from the FDA earlier in 2014, is intended for spinal fusion
procedures at one or two contiguous levels (L2-S1) in skeletally
mature patients with degenerative disc disease. The device is in-
tended for use with autogenous bone graft and supplemental fixa-
tion and can be used in either posterior or transforaminal lumbar
PR
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IZAT
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NTERTM
certified cleanroom manufacturing
finished device assembly
complete supply chain management
sterilization management
final packaging and labeling

cadencedevice.com sales@cadencedevice.com 800.252.3371

interbody fusion procedures, which are performed to help allevi-
ate pain and nerve compression by fusing and stabilizing adjacent
vertebrae in the lower back. The Expandable Interbody System is
designed to minimize the amount of implant insertion forces while
achieving the patient-specific anatomical fit needed for proper
treatment, according to the company. The system offers different
implant footprints, a range of implant height expansions and in-
strumentation, as well as in-situ height expansion and, if necessary,
the ability to reposition intraoperatively.
In September, the company introduced the Integra Freedom
Wrist Arthroplasty System in the United States. The Freedom
Wrist is an advanced implant design and includes enhanced in-
strumentation to aid in “efficient and potentially more reproduc-
ible surgical results,” officials said. The implant adds to the com-
pany’s upper extremity portfolio.
In July last year, the company completed its multicenter clinical
trial evaluating the safety and effectiveness of the Integra Dermal
Regeneration Template for the Treatment of Diabetic Foot Ulcers
(DFU). The data collected formed the foundation for the premarket
approval supplement application the company filed with the FDA in
February this year. An FDA approval with published data will form
the key to securing reimbursement. Assuming FDA approval and
timely publication of a peer-reviewed journal article, the company
plans to launch the resulting DFU product in the middle of 2016.
March saw the expansion of the company’s skin and wound
product line with the introduction of the Integra Wound Matrix
(Thin). Integra Wound Matrix (Thin) is a collagen-glycosamino-
glycan wound matrix that maintains and supports a healing envi-
ronment for wound management. Available in a variety of sizes, it
may be used for second-degree burns, partial and full-thickness
wounds, pressure ulcers, venous ulcers, diabetic ulcers, chronic
vascular ulcers, tunneled/undermined wounds, surgical wounds
(donor sites/grafts, post-Moh’s surgery, post-laser surgery, podi-
atric, wound dehiscence), trauma wounds (abrasions, lacerations,
skin tears) and draining wounds. Terminally sterilized, Integra
Wound Matrix (Thin) can be stored at room temperature, has a
24-month shelf life, and is intended for one-time use.
Also in March, Integra rolled out its Laminoplasty System in
the United States. The system, which is used to treat patients with
ossification of the posterior longitudinal ligament, cervical myelop-
athy and degenerative spinal canal stenosis, is designed for use af-
ter open-door laminoplasty procedures in the cervical and thoracic
spine (C3-T3). The system encompasses a variety of arched plate
designs, self-drilling bone screws and multiple insertion options,
offering surgeons choices when treating patients with central canal
stenosis and myelopathy. The global laminoplasty market is esti-
mated to reach approximately $70 million by 2015. With the addi-
tion of the Laminoplasty System, Integra is well positioned to gain
a key foothold in this rapidly growing market.
Integra LifeSciences introduced its line of titanium bone
wedges, designed for internal fixation for bone fractures or os-
teotomies in the foot and ankle, in February. The wedges may be
used in corrective procedures, such as Cotton (opening wedge)
osteotomies of the medial cuneiform and Evans lengthening
66 • ODT odtmag.com July/August 2015
osteotomies. They are composed of commercially pure titanium
formed into a cancellous-like structure that mimics the strength
and porosity of human bone. The system is available in 15 differ-
ent pre-shaped anatomical sizes, to accommodate various skel-
etal deformities in the foot. Osteotomies are procedures in which
surgeons realign or remove a segment of bone located near a
damaged joint to help correct deformities, typically in the foot.
Bone wedges are designed to provide bone-grafting material for
osteotomy corrections. They provide a scaffold for bone growth,
as well as biologic stability and structural support for deformity
corrections. Ancillary plates are used to hold bone graft material
in place and prevent it from expulsion.
More of a manufacturing milestone than a product develop-
ment one, Integra wrapped up an ongoing FDA issue at its facility in
Añasco, Puerto Rico. Following FDA inspections in the fall of 2012,
the agency issued a warning letter for the facility in February 2013.
On Nov. 26, 2013, the FDA completed its second inspection of the
Añasco facility and issued a new Form 483 with six additional obser-
vations. On Sept. 30, 2014, the FDA completed its third inspection
of the facility, and concluded that the company had addressed the
issues raised in the warning letter and previous inspectional obser-
vations, and it issued no other inspectional observations. The Añasco
warning letter was closed out effective Jan. 14 this year.
Magic No. 11
The company grew revenue 11 percent to $928 million. Domes-
tic revenues increased 11 percent to $714.0 million and were 77
percent of total revenues for the year. International revenues also
increased 11 percent to $214.3 million. Foreign exchange fluctua-
tions had a negative impact of $2.3 million on annual sales. Net
income was $34 million, up from a loss of $21 million for FY13.
U.S. Neurosurgery revenue was $244.6 million, an increase of 42
percent, largely the result of DuraSeal product sales arising out of
the Confluent Surgical acquisition, which added $54.1 million in
the period. Revenue for the U.S. Instruments division was $157.8
million, a decrease of 4 percent from the prior year. According
to the company, lower sales were the result of sluggish sales in
the acute-care and alternate-site businesses and product discon-
tinuations. A partial-year contribution from Integra’s purchase of
Medtronic’s MicroFrance in October partially offset the decline.
Sales for U.S. Extremities were $143.4 million, an increase of 12
percent—mostly due to strong sales of dermal and wound-care
products, including the company’s “thin” version of its Integra
Wound Matrix, and from its shoulder product line, which in-
creased as a result of the launch of a new reverse shoulder and in-
creases in the number of distributors selling the technology. The
remainder of the company’s lower and upper extremity franchise
increased slightly during the period partially as a consequence of
sales force turnover in the second quarter of 2014 as well as the
transition to a new total foot system, officials reported. U.S. Spine
division revenue, which includes spine hardware, orthobiologics
and private-label products, were $171.4 million, a decrease of 6
percent. Sales of spine hardware softened due to ongoing pricing
pressure, delays in expected product launches, and slower than
 Top Companies

anticipated addition of new distributors, according to the com-

pany’s leadership. The sales slump partially was offset by growth
in orthobiologics, especially demineralized bone matrix and can-
cellous bone products, due to ongoing market demand. Sales of
private-label products decreased from the prior-year period be-
cause some business was lost as a result of recall issues in 2013.

9. NuVasive $762 Million

KEY EXECUTIVES:
Gregory T. Lucier, Chairman & CEO
Patrick Miles, President & Chief Operating Officer
Matt Link, President, U.S. Commercial
Quentin Blackford, Exec. VP & Chief Financial Officer
Carol Cox, Exec. VP, Strategy, Corporate Development &
External Affairs
Russell Powers, Exec. VP (with focus on China expansion)

NO. of EMPLOYEES: 1,500

HEADQUARTERS: San Diego, Calif.

T
alk about a shakeup. The current executive team at NuVa-
sive looks distinctly different than the leadership team that
finished up fiscal 2014. The changes came in 2015 when
an independent investigation uncovered still-unclear below-
the-board practices in relation to expense reimbursement and
personnel practices by ex-CEO Alex Lukianov. He resigned on
April 1 (not, unfortunately, a joke) without comment, leaving it
to Independent Board Director Jack R. Blair to make a diplomatic
statement in his wake.
“The results of an independent investigation overseen by
the board of directors revealed that Alex had not complied with
certain of the company’s expense reimbursement and personnel
policies,” Blair said.“Although the amounts involved appear to be
immaterial to the company’s financial results, his actions in this
regard were not representative of the high standards by which
NuVasive operates.”
At the time, Greg Lucier, a member of the company’s board
of directors since 2013, was appointed interim CEO; he has since
been instated permanently in the office.
But the executive changes didn’t begin and end with Luki-
anov. His departure came three months after Chief Operating
Officer (COO) Keith C. Valentine unexpectedly left the company
after a 14 year career with NuVasive. He left, according to Luki-
anov, to “explore different career options” and “fulfill long-held
professional aspirations.” At this time, then-president of Global
Products and Services Pat Miles took over the role of COO.
In July, the company announced a major restructuring of the

July/August 2015 odtmag.com ODT • 67

executive team. Six positions were filled and a new one—chief in-
formation officer—was created (as of publication, the position has
not been filled). Notably, Quentin Blackford took over the chief
financial officer role from Michael J. Lambert, who retired in 2014.
But enough about 2015. Full-year revenue for FY14 (ended
Dec. 31), at $762.4 million, bested 2013 by 11.3 percent. On a
non-GAAP basis, the company reported net income of $57.5
million, or $1.16 per share, for the full year 2014 compared to
net income of $57.4 million, or $1.23 per share, for the full year
2013. Cash, cash equivalents and short and long-term market-
able securities were approximately $405.8 million on Dec. 31. The
company generated $19.1 million in cash flows from operations
and invested $12.7 million in capital expenditures, yielding $6.3
million for the fourth quarter 2014 in free cash flow, defined as
operating cash flow less capital expenditures. The company gen-
erated $115.5 million in cash flows from operations and invested
$58.2 million in capital expenditures, yielding $57.4 million for
the full year 2014 in free cash flow. Total revenues increased $77.2
million in 2014 compared to 2013 and $64.9 million in 2013 com-
pared to 2012, representing total revenue growth of 11 percent
and 10 percent, respectively.
Spine Surgery products remain NuVasive’s bread and butter
(it claims to be the third largest spine company in the world),
bringing in $590.4 million in revenue for 2014, an 11 percent in-
crease over 2013. The company’s Biologics portfolio brought in
$129.6 million in revenue, a 10.8 percent increase; and Monitor-
ing Service products increased revenues by 8 percent over 2013,
bringing in $42.4 million.
Growth in Monitoring Services was a big improvement over
the 1 percent growth between 2012 and 2013; the increase in
revenue in 2014 was primarily from increased medical billing
collections and volume. The increase between 2012 to 2013 was
offset by unfavorable changes in reimbursement rates, the com-
pany reported. The growth spurt was undoubtedly also boosted
by the June release of the NVM5 V2.0, a next generation moni-
toring platform with computer-assisted surgery applications. The
platform hosts a comprehensive set of intraoperative technolo-
gies specifically designed for spine surgery, including the sensory
monitoring modality for multimodality monitoring of the spinal
cord and peripheral nerves, as well as refinements to the spinal
rod-bending technology called Bendini (released in 2013).
The NVM5 system, intended for intraoperative neurophysi-
ologic monitoring during spinal surgery, provides information
directly to the surgeon to help assess a patient’s neurophysiologic
status. It does so by electrically stimulating nerves via electrodes
located on surgical accessories and monitoring electromyog-
raphy, transcranial motor evoked potential, or somatosensory
evoked potential responses of nerves. The system also integrates
Bendini software used to locate spinal implant instrumentation
for the placement of spinal rods.
NuVasive’s Spine Surgery product line offerings, which in-
clude thoracolumbar products, cervical product offerings and dis-
posables, are primarily used to enable access to the spine and to
perform restorative and fusion procedures in a minimally disrup-
68 • ODT odtmag.com July/August 2015
tive fashion. The Biologic product line offerings include allograft
(donated human tissue), Formagraft (a collagen synthetic prod-
uct), Osteocel Plus and Osteocel Pro (each an allograft cellular
matrix containing viable mesenchymal stem cells, or MSCs), and
Attrax (a synthetic bone graft material), all of which are used to
aid the spinal fusion or bone healing process. The Monitoring
Service line offering includes hospital-based revenues and net
patient service revenues related to intraoperative neurophysi-
ological monitoring services performed.
According to NuVasive, the continued adoption of minimally
invasive procedures for spine has led to the expansion of its pro-
cedure volume. Increased market acceptance in the company’s
international markets reportedly contributed to the increase in
revenues for FY14 (although the company did not report rev-
enues broken down by geographical region). At the end of last
year, the company reported that it expected continued adoption
of its minimally invasive procedures and deeper penetration into
existing accounts and international markets. However, the con-
tinued consolidation and increased purchasing power of NuVa-
sive’s hospital customers and group purchasing organizations;
physician-owned distributorships; recent changes in the public
and private insurance markets regarding reimbursement; and
ongoing U.S. policy and legislative changes made the lumbar
portion of the spine market less predictable and have limited the
domestic spine market’s procedural growth rate. Based on these
factors, NuVasive’s outlook for 2015 was that its growth in would
come primarily from share gains in the shift toward less invasive
spinal surgery and international growth.
Notable Milestones
April 2014 marked the one-year anniversary of NuVasive’s Ja-
pan office in Tokyo. The location was opened when the company
earned Japanese regulatory Shonin approval for several products
supportive of the Extreme lateral interbody fusion (XLIF) surgical
procedure in 2013. Since then the center has trained surgeons on
the minimally invasive procedure and treated thousands of pa-
tients as well.
Also in 2014, NuVasive’s charitable foundation, the NuVasive
Spine Foundation, reached a cumulative milestone of more than
$13 million contributed since the Foundation’s inception in 2009. As
of September last year, NuVasive had donated approximately $10.5
million in surgical products through its non-profit arm. The Founda-
tion’s philanthropy started by providing surgical services to a village
in Nairobi and grew over five years to support 65 surgical mission
trips to patients in 23 countries including Ethiopia, Syria, Turkey, Ro-
mania, Belize, India, Zimbabwe and Kenya. In addition to organiz-
ing the surgeons who volunteer their time and expertise to fur-
ther the NSF mission, the Foundation also emphasizes “expertise
transfer” to ensure that surgeons in disadvantaged communities
are able to create self-sustaining spinal surgery programs once a
mission trip concludes. Last year’s annual golf tournament fun-
draiser raised more than $370,000, exceeding the target amount
of $300,000 and the foundation’s previous record of $230,000 for
the same event in 2013. The number of yearly missions has more
 Top Companies

10. Globus
than doubled since 2011 and the Foundation is on track to ex-
pand its program development, NuVasive reported.
Finally, NuVasive also received a favorable settlement in one
of its ongoing lawsuits in 2014. The company filed a lawsuit

Medical
against Kennewick, Wash.-based Cadwell Laboratories Inc. in
2012 regarding one of NuVasive’s neuromonitoring technology
patents. It asserted that Cadwell infringed on certain parts of the
patent, including the integration of nerve monitoring technology
during lateral approach spine surgery. As part of the settlement $474.3 Million
reached between the parties, Cadwell agreed to exit the lateral
spine surgery market, and to no longer provide products, services, KEY EXECUTIVES:
or support for lateral approach spine fusion surgeries. In addition, David C. Paul, Chairman & CEO
certain of Cadwell’s future products that rely on NuVasive pat- David M. Demski, President & Chief Operating Officer
ented technology may be required to openly attribute intellectual Daniel T. Scavilla, Sr. VP & Chief Financial Officer
property ownership to NuVasive and may require a 5 percent fee A. Brett Murphy, Exec. VP, U.S. Sales
paid to NuVasive. David D. Davidar, Sr. VP, Operations
The neuromonitoring technology in question was previously Anthony L. Williams, Sr. VP, Business Development
validated in litigation between NuVasive and Medtronic plc. In and General Counsel
2011 a jury awarded monetary damages and back royalty pay-
ments to NuVasive in favor of the company’s claim that Medtron- NO. of EMPLOYEES: 900
ic’s NIM-Eclipse System infringed upon NuVasive’s neuromoni-
toring technology patent. HEADQUARTERS: Audubon, Pa.

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T
he pain seemed to come out of nowhere, shooting thun-
derbolts of white-hot heat down Frank Hummel’s left arm
from shoulder to fingertips. Relief was practically impos-
sible as neither medication nor physical therapy could dull the
burning within his limb.
Hummel’s life quickly morphed into a series of terrible, hor-
rible, no good, very bad days: Once-simple tasks like going to
work or picking up his children at school became agonizingly dif-
ficult. Even sleeping was a challenge.
“My neck, my back, my arm was numb, my hand was numb.
And nothing would help,”he recalled.“It hurt. It hurt a lot. Sleep-
ing was hard, interacting with my family was hard—anything, re-
ally—life became very hard.”
And so it remained until doctors diagnosed Hummel with a
herniated disc in his lower neck (between the C-5 and C-6 verte-
brae). Surgery was his only real treatment option.
“Before surgery I was nervous. It was hard to sleep sometimes,
there was a lot weighing on my mind,” he said. “I was thinking
about my family ... what am I going to do after surgery? Can I do
the things I [like to] do? I like kayaking, hiking, I like fishing, and
I was afraid that I might not be able to do all these things again.”
Valid fears, certainly, and, most likely the rationale behind
Hummel’s choice of disc replacement over spinal fusion surgery.
After consulting with his orthopedist, Jeffrey R. McConnell, M.D.,
of Allentown, Pa., Hummel settled on the Secure-C Cervical ar-
tificial disc, a motion-sparing device designed specifically as an
alternative to fusion. Made by Audubon, Pa.-based Globus Medi-
cal Inc., the artificial disc provides articulation and sagittal plane
translation, allowing up to 15 degrees of motion in flexion/ex-
tension (bending the neck forward and backward), and up to 10
degrees of motion in lateral bending (side to side). The disc itself
consists of two metal (chromium molybdenum) endplates coated
with a titanium plasma spray, and a polyethylene inner core de-
signed to minimize wear debris.
“Waking up from surgery was amazing. The arm pain was
gone, the hand numbness was gone, the thumb pain was gone,
everything was back. I had surgical pain but it was nothing com-
pared to what I was going through before,” Hummel said.“It was
absolutely amazing. After my three-month checkup, they cleared
me for work and that was fantastic. I was also able to go kayaking
again, and go camping and hiking. It was a great time and it still
is. It’s a good feeling to have your life back. I got my life back and
I feel great.”
Hummel’s recovery capped a “great time” in Globus Medical’s
12-year history as well: The company grew sales 9.2 percent last
year to $474.3 million and increased its gross profit 8.8 percent to
$363.5 million, according to the 2014 annual report. Net income
skyrocketed 34.8 percent to $92.5 million, with net income per
diluted share rising by nearly the same amount (32.8 percent) to
97 cents per share.
“2014 was a great year for Globus Medical,” Chairman/CEO
David C. Paul told analysts during an earnings conference call
earlier this year.“Full-year EBITDA (earnings before interest, tax-
es, depreciation, and amortization) increased by 140 basis points
70 • ODT odtmag.com July/August 2015
to 26.1 percent of sales. We launched 16 new products, signifi-
cantly expanded our research capabilities and successfully com-
pleted the acquisition of Transplant Technologies of Texas. This
performance was a result of continued execution of our strategy
of robust product innovation, sales force expansion and disci-
plined expense control.”
And well-accepted technology. Paul and his fellow executives
attributed Globus’ stellar fiscal performance last year to strong
demand for both new and existing products, particularly devices
released during the last three years. Old favorites that contribut-
ed to 2014 sales growth included the Secure-C Cervical disc, the
Latis Spacer, the Fortify corpectomy spacer, Kinex Bioactive and
the SI-LOK Sacroiliac Fixation System, a device that alleviates
pain by fusing the joint in a minimally invasive procedure. The
product features hydroxy-apatite-coated screws with an optional
slot for bone graft materials.
The Revere Threaded Reduction Screw System and CREO
platform were among the products that boosted Innovative Fu-
sion sales 6.6 percent in 2014 (year ended Dec. 31) to $270.8
million. The Revere device includes both polyaxial and unipla-
nar screws designed specifically to address spondylolisthesis and
other spinal deformities. Its ±30-degree screw angulation (60
degrees total) provides intraoperative versatility, and reduction
tabs allow maximum rod reduction into the screw head while the
blunt tip permits bicortical purchase. The threaded locking cap
mechanism is optimal for cases in which patient anatomy limits
the space for reduction maneuvers.
Globus continued to roll out its CREO portfolio last year in
its drive to turn the product into the world’s “most advanced
and comprehensive pedicle screw system for various complex,
deformity, degenerative and trauma pathologies through either
an open or minimally invasive approach.” According to bigwigs,
the CREO platform—encompassing the non-threaded, AMP,
threaded, threaded AMP, deformity, MCS and SILC models—has
been used in roughly 6,000 surgeries worldwide. Executives plan
to introduce another nine versions of the product by mid-2016.
Similarly, robust demand for Globus’ minimally invasive, bio-
logic, artificial disc and interventional pain management prod-
ucts helped lift Disruptive Technology revenue 12.8 percent to
$203.5 million. Sales drivers in this category included Kinex Bio-
active and the Plymouth Lateral Plate System, the latter of which
is designed to provide spine stabilization through a single lateral
approach. Unique anchoring and keying instruments align the
plate with the interbody device and vertebral body endplates, al-
lowing controlled placement with minimal retraction.
Kinex is a bioactive product with the osteostimulative proper-
ties of bioglass that amplifies the cellular activity responsible for
bone formation. In addition to bioglass, Kinex contains collagen
for scalp holding and hyaluronic acid to help with angiogenesis.
Newcomers that contributed to 2014 earnings growth includ-
ed the Monument Anterior Spondylolisthesis Reduction system,
SILC Fixation System and Altera Minimally Invasive Articulating
Expandable spacer. Globus executives describe the Monument as
an anterior lumbar interbody fusion device with a built-in me-

chanical feature to help with spondylolisthesis reduction. The
self-locking and threaded translational attribute can be engaged
to reduce the implant up to 8 millimeters in-situ, and the screws
are designed for optimal cortical purchase. Monument is manu-
factured in different sizes, heights and sagittal angles to accom-
modate the lumbar and sacral spine, including L5-S1. The device
is intended for use with supplemental fixation.
The SILC system is a low profile sublaminar fixation de-
vice that provides the stability to perform standard reduction
maneuvers for spinal curvature correction without the need
for pedical purchase in all vertebrae. The system consists of a
polyethylene band that uses the strength of the laminal cortical
bone as well as a top-loading clamp with integrated set screw
allowing implant insertion at any time during the procedure.
SILC is compatible with rod diameters ranging from 4.5 mil-
limeters to 6.5 millimeters.
Released at the North American Spine Society 2014 Annual
Meeting in November, the Altera spacer helps restore lordosis and
maintain sagittal balance while reducing the challenges of inser-
tion. The spacer is inserted at a minimized height, articulated into
an anterior position and then expanded vertically to optimize fit
(surgeons have the choice of 8-degree or 15-degree profile angles).
The device also allows for in-situ delivery of autogenous bone graft
into, as well as around, the implant after it has been expanded.
Securing Future Growth
Besides its new product launches, Globus also shored up its fu-
ture earnings potential by acquiring allograft tissue processor
Transplant Technologies of Texas Ltd. in October and refining its
robotics program throughout the year.
Paul said the company made “tremendous progress” in com-
mercializing its robotics technology, building a multidisciplinary
team in Boston, Mass., dedicated to working on robotics, naviga-
tion and imaging. The firm’s first product is a robotic surgical aid
for navigating and facilitating surgical access, implant sizing, po-
sitioning and placement; the system is being designed to enable
surgeons to perform procedures more quickly and with greater
accuracy, safety and reproducibility. Paul is eyeing a 2016 target
for commercialization.
The Transplant Technologies purchase arrived too late in the
year to significantly impact sales, but Globus bigwigs expect the
addition to contribute $12 million in revenue this year and neu-
trally impact fully diluted earnings per share for 2015.
Transplant Technologies processes sterile human tissue and
distributes a wide range of allograft implants (tissue graft from
donors), including machined spine implants, demineralized
bone matrix, sponge allografts and traditional bone allografts.
The company also processes and distributes sports medicine ten-
dons, birth tissue allografts and skin allografts. Founded in 1993,
Transplant Technologies products have been used in more than
600,000 implant procedures worldwide.
Globus said it plans to grow Transplant Technologies’ opera-
tions in Texas and maintain its existing relationships with distribu-
tion partners while pumping its products to its own sales channels.
July/August 2015 odtmag.com ODT • 71
Top Companies
Back in Court
The company’s legal problems intensified last year with the fil-
ing of two new patent infringement lawsuits and a trade secret
misappropriation guilty verdict.
A judicial double-whammy occurred in January, as DePuy
Synthes accused Globus of infringing upon its spinal stabiliza-
tion device with the Transition Stabilization System, a semi-rigid
posterior fixation solution that provides “unique” biomechanical
profiles. The product’s SoftStop technology allows optimized load
sharing with the anterior column and transitional stabilization be-
tween rigidly fused levels and un-instrumented spinal segments.
DePuy does not specify the way(s) in which the Transition device
infringes upon its patent, nor does it identify the specific product
it mimics, but the Jan. 8 complaint does ask the court for relief.
Nine days later, a federal jury found Globus guilty of trade
secret misappropriation and awarded a neurosurgeon $4.3 mil-
lion in damages. The physician, identified as Sabatino Bianco,
M.D., sued the company in 2012, alleging that it misappropriated
his trade secrets by using drawings related to three implantable
medical devices he had provided to Globus years earlier pursuant
to a confidentiality agreement (the Caliber, Caliber-L, and Rise
products). Bianco claimed that Globus told him it was not inter-
ested in commercializing the idea he proposed in the drawings
but then internally developed and sold a device incorporating
that idea without compensating him.
Following trial, the jury awarded Bianco a 5 percent royalty
based on net sales of three specified Globus products. In post-
trial motions, the parties disputed the appropriateness of an
ongoing royalty. Noting that ongoing royalties were appropriate
in patent-infringement cases, the court reasoned that misappro-
priation was sufficiently analogous to patent infringement and
upheld the jury’s royalty award. The court also concluded the roy-
alty should be paid for 15 years from the date that an agreement
between Bianco and Globus should have been reached in 2007
and that the royalty was owed on all products “not colorably dif-
ferent” from those at issue in the litigation.
Globus, naturally, is appealing the jury’s verdict.
In November, Bonutti Skeletal Innovations, LLC filed a patent
infringement suit against Globus, claiming several of the com-
pany’s spinal spacer products and related instruments infringe
Bonutti Skeletal patents, which include one titled “Changing Re-
lationships Between Bones,” issued Aug. 8, 2000. The patent dis-
cusses the use of a wedge member in a joint to alter the relative
positioning of a patient’s bones.
Specifically, Bonutti Skeletal alleges that Globus’ Caliber,
Caliber-L, Coalition, Colonial, Continental, Forge, Fortify, For-
tify I PEEK, Fortify I-R, Independence, Intercontinental, Monu-
ment, Nikeo, Rise, Signature Sustain Arch, Sustain Large, Sustain
Medium, Sustain-O, Sustain Small, and Transcontinental spinal
spacer products each infringe various Bonutti Skeletal patents.
According to the complaint, Bonutti Skeletal has been built on
the work of Peter M. Bonutti, M.D., a surgeon that has performed
more than 20,000 orthopedic procedures and been the inventor
or co-inventor on more than 150 U.S. patents. v
Driving a Successful
Medical Device Product
Development Cycle
When you set out to bring a new medical device
to market, avoid spinning your wheels—
follow a tried-and-true road map.
Dawn Lissy • Contributing Writer
H
istorically, the automobile industry has been the
American industry of record. But given the explo-
sion of technology and focus on patient care, the med-
ical device industry is positioned to emerge as American Auto
version 2.0. U.S. Food and Drug Administration (FDA) accep-
tance and clearance are the gold standard worldwide when it
comes to marketing medical devices. Even if the device is not
released in the United States, FDA clearance provides “street
cred” and marketing mojo for products from foreign countries
because of the high value manufacturers and patients place on
the blessing of our primary regulatory agency.
So what does it take to earn that internationally sought
clearance or approval? It’s rarely a smooth, straight road to
market, particularly for first timers or innovators who don’t
have the backing of a major international corporation. When
I worked with the FDA as part of its Entrepreneurs in Resi-
72 • ODT odtmag.com July/August 2015
dence program, one of my primary jobs was to develop
a road map so anyone—individual surgeon, inventor or
international medical device conglomerate—would have a
guide to help them get their devices to market.
Here’s some of what I learned about what it takes to make it
through the long haul.
Parts is Parts
Because every medical device is somehow unique, there really
is no standard assembly line or single starting point to get
a device on the road toward market approval. But there are
common features and parameters that apply to just about any
device to help you minimize road hazards and other obstacles
to give you reproducible, successful results.
You have an extraordinary idea that will revolutionize pa-
tient care. That’s why we are in this industry; we work to make

people’s lives better. To make your journey easier, faster
and better, you need to figure out how to make that idea
a reality. You ask yourself a seemingly endless stream of
questions. How long will it take to get to market? How
big is the market? How long will it take to make a return
on my investment? Do I have the resources to make it all
the way to market? The answers to those questions will
depend on your specific device as well as circumstances.
Be honest. If you don’t know, find someone who can
help you. A reliable, knowledgeable navigator will make
all the difference in how well and quickly you travel the
road to market.
Know Your Make and Model
In the United States, there are three classes of medical de-
vices: Class I, Class II and Class III.1 There are significant
differences in requirements and time to clearance or ap-
proval.
Class I medical devices have the least amount
of regulatory control because they present mini-
mal harm to the user. Such devices include wheel-
chairs, crutches and other external products. It is re-
quired that the manufacturing facility for a Class I
device is registered and the device be listed in the
FDA database.
For Class II devices, general controls aren’t a high
enough standard; they require more scrutiny, typically a
premarket clearance through the 510(k) process before
they make it to market. They’re typically an improvement
to an existing device, usually one that goes into the body
such as a new pedicle screw or hip joint.
Class III devices require the most stringent standards
because these are considered a completely new technology
for the body. As far as the FDA is concerned, they pres-
ent significant risk to the patient and/or require significant
scientific review of the safety and effectiveness of the medi-
cal device prior to commercial introduction. Most Class III
medical devices require a premarket approval application
(PMA).
Once you know which class your product falls into,
you’ll have a much clearer idea of how to proceed.
Know the Lay of the Land
Before you hit the road, check out the forecast and the
terrain you’re traveling through. Does the market cur-
rently exist for this product? Is it a $300,000 market or a
$300 million market? If this is a disruptive technology (for
example, intervertebral body fusion devices), what is the
potential market value of this device? Based on the regu-
latory path, what is the timeline to get to market? A Class
II device may be a year or less, but a Class III device could
be two to five years or longer for PMA alone. What are the
July/August 2015 odtmag.com
Product Development
costs of development? Factor in engineering, prototypes,
testing, building inventory, etc.
And the most critical concern from a long-term stand-
point, is if the device can receive reimbursement. You may
design and garner clearance for the most revolutionary
technology since Capt. Steve Austin from “The Six Million
Dollar Man,” but if no sponsor can get paid for rebuild-
ing him within our current health insurance and medical
reimbursement system, Capt. Austin is terminal.
If your brainchild is a disruptive technology, make sure
you have a plan for reimbursement at the time you receive
your approval. Shareholders can be fickle folks; they don’t
want to have a game-changing device with no way to
get paid.
Know the Rules of the Road
Because the FDA is an evolving organization much like
the evolving technologies it evaluates, the landscape will
change with each submission. New clinical data, medi-
cal device reporting and new ASTM standards lay the
path for future submissions.2 Just because you included
something in a previous submission, that doesn’t mean
the same rules still apply. Per the 2015 Strategic Priorities
Document, the FDA Innovation Pathway 2.0 is a stream-
lined route to regulatory approval.3
The goals of this new approach are to strengthen the
clinical trials enterprise, strike the right balance between
premarket and postmarket data collection and provide
excellent customer service. The FDA also is actively up-
dating tools to facilitate collaboration with clients. You
can now even request a presubmission meeting to help
mitigate any regulatory pathway risks and make sure you
and reviewers are headed in the right direction.4
What Drives Your Plot?
I tell clients that the road to regulatory approval is really
the chance to write your own story for your medical de-
vice. Although there is no standard form for submissions,
there is a right and wrong way to submit your informa-
tion. So be sure you lay out the plot with precise detail.
If your submission is well-written and easy to follow, it’s
the foundation for productive, positive dialog with your
reviewer.
As the author, you’ve been working on your project for
months, maybe even years. You know all aspects of the
design history and every painstaking decision of the pro-
cess. But your reviewer is a new reader who can only go
off what you provide. The FDA reviewers are responsible
for making sure our parents, friends and family all have
safe and effective products for better health. The more in-
depth, clear and vetted information you can provide, the
quicker you can travel the road to market.
ODT • 73
 Picking the right lead for the regulatory submission is criti-
cal. Will you be better off with internal or external regulatory
support? The answer depends on the project. If the regulatory
department has many submissions hitting at the same time,
prioritize the projects and outsource to meet your deadlines.
If this is wholly new technology, bringing in external consul-
tants with fresh perspectives and experience on a wide range
of devices may be more beneficial than the internal team
who’s focused solely on the company’s products. Of course,
startups are usually relying on consultants, and well-estab-
lished companies have internal support. Be open to making
the most of your resources.
Beware Tunnel Vision
We all have personal biases about what is important and how
to improve on existing processes. Bear in mind, however, that
FDA standards and requirements are set to ensure we’re all
working together to safeguard public health.
To receive clearance for a Class II device, there’s an existing
measure of safety and efficacy and the requirement that your de-
vice is substantially equivalent (SE) to another cleared device. The
mechanical testing and characterization of the device answers
one aspect of SE—others include material, size, shape, indica-
tions, etc.You also need a solid mechanical test plan (what testing
is required vs. what testing is outlined in a particular standard),
the correct size of implant to test (worse-case size for the fam-
ily of implants), the types and modes of testing (static/dynamic
and axial, shear, torsion, etc.), and number of test samples (plus
extras) all are critical components. The protocol should follow
a recognized ASTM (the international technical standards or-
ganization) or ISO standard with acceptance criteria. There is a
significant investment in the mechanical testing portion of the
product development cycle—the cost of the implants, the cost of
the testing activities with feasibility or multiple rounds of testing,
and the time for the actual testing (typically at the end of the
product development cycle and the last activity prior to compiling
the submission).
Who’s Driving This Thing Anyway?
You know what kind of device you have, what kind of market
you’re tackling, what you need to do to get it approved, how it’s
getting reimbursed, and when your shareholders (or you) can
expect to make money. Now you need to know who’s behind
the wheel. You need and deserve the very best partners to make
this road trip as easy and successful as possible. Critical team
members include: product manager, engineering (design, failure
mode and effects analysis, controls, design history file, quality
systems), product champions (user group or surgeon team for
an orthopedic device), regulatory, mechanical testing and man-
ufacturing. Class III devices also will include extra team mem-
bers such as animal testing, biocompatibility testing, clinical
trials, etc.
Once you have your team in place, you can map out the
product development timeline, milestones, possible obstacles
74 • ODT odtmag.com July/August 2015
and expectations. A small sampling of things to keep in mind:
design controls, usability studies, design validation, creation
and maintenance of the design history file, and postmarket
surveillance are critical components for the engineering and
quality team to manage and execute. Understanding the qual-
ity activities to maintain excellence after you receive clear-
ance is important for patient safety and market success; this
is a very real and often overlooked aspect of having a cleared
medical device. Then there are considerations about manufac-
turability and process validation. Depending on your device
as well as market and long-term plans, there are still more
factors and issues that can and do pop up.
Buckle Up and Enjoy the Ride
Perhaps the most important thing to keep in mind is there’s
more than one way to get where you’re going. If you can keep
an open mind and approach your product development cy-
cle with a positive expectation, flexibility and the right team,
you’ll steer your project to success and the marketplace with
minimal bumps in the road. v
References
1. www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/
Overview/default.htm
2. www.fda.gov/medicaldevices/safety/reportaproblem/default.htm
3. www.fda.gov/downloads/AboutFDA/CentersOffices/Offi-
ceofMedicalProductsandTobacco/CDRH/CDRHVisionandMission/
UCM384576.pdf
4. www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/cfrsearch.
cfm?fr=514.5
Dawn A. Lissy is president of the Empirical family of companies (Em-
pirical Testing, Empirical Machine and Empirical Consulting). Lissy
is a biomedical engineer, an entrepreneur and an innovator. For more
than 20 years, she’s worked with clients to bring groundbreaking med-
ical devices to market. She was recently selected for the U.S. Food and
Drug Administration’s (FDA) Entrepreneurs in Residence program,
which invited top professionals from the medical device industry to
work with the FDA to streamline and improve the approval process for
devices. Her close contact with regulatory officials enables her to keep
Empirical clients and peers abreast of all ASTM, FDA and CE regula-
tions that may affect product testing and development. She’s frequently
invited to share her expertise at biomedical events and conferences
around the world. She also volunteers for the Perry Initiative, a non-
profit dedicated to bringing more women into engineering and ortho-
pedic surgery. Since 1998, the Empirical family of companies has oper-
ated under Lissy’s direction. She has been responsible for all Empirical
operations, including designing test fixtures and protocols, running test
protocols, and writing complete reports. She holds an inventor patent
for the Stackable Cage System for corpectomy and vertebrectomy. She
is a member of the Biomedical Engineering Society, Society of Women
Engineers, the American Society of Biomechanics and the American
Society for Testing and Materials. She holds an M.S. in biomedical
engineering from The University of Akron, Ohio.
Orthopedic
Manufacturing:
A Look at the Current State
of Product Development
For many orthopedic OEMs, R&D means
enhancing existing products, getting them
to market quickly, keeping costs down
and exceeding regulatory requirements.
Ronald Litke and Christopher Scifert•
Contributing Writers

W
ith multiple cost stressors on the orthopedic
market—including the medical device tax—or-
thopedic OEMs are intent on saving time and
money. This means adding value whenever they can to ex-
isting products to improve performance and make them
stand out from the competition—usually by using meth-
ods and materials that already have regulatory approval
and validated by a large body of testing and performance
data. For many orthopedic manufacturers, the research-
and-development mission has become enhancing exist-
ing products and getting them to market quickly, while
still meeting or exceeding regulatory requirements and
keeping costs down.
Achieving these goals can be a challenge for the contract
manufacturer and depends on a number of factors, includ-
ing the type and size of the project and whether the contract
manufacturer must be fully integrated into the customer’s
quality and design system. Understanding user needs early
in the design process also is essential for speeding up prod-
uct development—especially through the efficient use of
rapid prototyping. By manufacturing proto-
types quickly and inexpensively via additive man-
ufacturing methods, engineers can hold, examine, and test
these products very early in the design process. This makes it
much easier to identify flaws and inconsistencies, which can
then be “designed out” and retested with a minimum number
of iterations.
Top R&D Trends
Orthopedic engineers continue to improve advanced-bearing
surfaces in implants with the goal of reducing wear debris
and implant loosening, as well as extending implant longev-
ity. This includes testing engineered plastics for articulating
devices like hips and knees, including biological reaction to
wear debris. Research continues in cross-linked polyethylene
and vitamin E cross-linked polyethylene. Although vitamin
E-cross-linked polyethylene laboratory in-vitro testing has
shown positive results for controlling oxidation, longer term
follow-up testing is required to prove the clinical benefits of
vitamin E materials.

76 • ODT odtmag.com July/August 2015


Polyether ether ketone (PEEK), which has
proven itself in the spinal market for many
years, is strong, biocompatible, radio-
lucent, and easily adaptable for ma-
chining and molding. As a bearing
surface, however, PEEK is sup-
optimal in high load-bearing
applications (such as hip
and knee implants) un-
less additives such as
carbon fiber are used
to increase strength.
Although some com-
panies market car-
bon-fiber-reinforced
PEEK materials as
acceptable wear sur-
faces for acetabular
liners, most device
manufacturers avoid
PEEK for these ap-
plications while they
wait for more clinical
data confirming its re-
liability as a high load-
bearing surface.
The U.S. Food and
Drug Administration (FDA)
is placing increased scru-
tiny on new materials—espe-
cially for bearing couples—and
is asking more questions related to
the wear performance of these materi-
als. Standard cross-linked polyethylene,
vitamin-E cross-linked polyethylene, carbon fi-
ber PEEK, and titanium carbide all are new materials
that require additional tests such as third-body wear testing,
particulate analysis, particle counts, morphology, and leach-
ing studies (traditional polyethylene bearing surfaces do not
require these tests). Also, since many of these types of tests
are relatively new, there are no ASTM or ISO standards that
specify how to run these tests, which can be a challenge when
trying to find a predicate device/test for comparing results—
which can drive up costs. Therefore, considerable R&D is be-
ing directed toward justifying these new testing parameters,
acceptance criteria, worst-case samples, appropriate loading
regimes, etc., to provide data that is acceptable to the FDA.
Design for Manufacturability
More complexity means more cost. OEMs are looking for
ways to reduce costs through simpler design strategies—for
example, assembly simplification. Finding ways to maintain
or improve functionality by using designs that have fewer
pieces and/or less complex modes of operation are signifi-
July/August 2015 odtmag.com ODT • 77
Orthopedic Trends
cant breakthroughs that can reduce overall production costs.
For example, using casting, additive manufacturing, or metal
injection molding to join multiple parts in an assembly into
one part that would otherwise be too complicated to machine
as a single piece reduces the number of parts and eliminates
some assembly steps. Engineers also are always looking for
ways to optimize production—machine programs, operation
order, process type, and other elements can be experimented
within the prototype environment to achieve a process that
easily can be transferred into a production environment.
Rapid Additive Manufacturing
Design for manufacturability studies can greatly benefit from
rapid additive manufacturing (AM) technologies for mak-
ing prototypes. Rapid additive manufacturing eliminates the
time-consuming steps and delays that come with standard
prototyping. What used to take weeks or months can now be
done in a few hours, saving time and materials and driving
down costs. Popular additive manufacturing technologies are
direct metal laser sintering and 3-D printing in plastics. Both
of these processes have revolutionized the way engineers ap-
proach the concept and design stages. Within hours, parts
can be manufactured, held, and closely examined, making it
much easier to identify errors and flaws, and design them out
of the process.
Occasionally, additive manufacturing methods can be
used to create production-ready metal parts from steel and
titanium, which saves considerable time and money. Difficult
geometries easily can be achieved using AM. Porous coatings
also can potentially be printed directly on the part. Making
fully functional parts with AM methods, however, currently is
only practical for low-volume runs because of the post-pro-
cessing that is required. For example, gross geometries easily
are accomplished with AM but tight tolerances often cannot
be reliably held—as a result, some post-process machining of-
ten is required for features like locking mechanisms, articulat-
ing surfaces, and assembly features requiring extremely tight
fits. Some companies use AM technologies to mass-produce
parts that are simple in design and require minimal post-build
machining because the process has been optimized and vali-
dated. Overall, however, high-volume AM production still is
cost-prohibitive. Current research is targeting process im-
provements and cost-reduction strategies.
Sterile Packaging and Product Delivery Systems
More complex products also create more packaging and ster-
ilization challenges. The FDA also is becoming more con-
cerned about sterilization requirements, especially in light of
recent patient deaths associated with serious illnesses trans-
mitted via imperfectly sterilized instruments.
As a result of these concerns (as well as another way to
reduce costs), more companies and healthcare end users are
using disposable instruments with pre-packed “peel and dis-
pose” types of packaging, instead of more expensive instru-
 ments that are sterilized and reused. Packaging design and
materials rapidly are evolving to better withstand transpor-
tation, temperature variations, and other factors to deliver a
longer shelf life. Customized packaging is needed for these
applications, which can be expensive for low-volume types
of parts. Also, many products that were once non-sterile are
now being sold as sterile, requiring new and validated pack-
aging options for sterilization processes such as ethylene ox-
ide radiation, vaporized hydrogen peroxide, and plasma.
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Forming Strong Relationships
The best solution for maximizing product quality, improving
time to market, and reducing overall cost is building long-
term relationships with highly qualified suppliers and invit-
ing them to share their knowledge and expertise during prod-
uct development. Their knowledge of what works and what
doesn’t is gained from working on hundreds of different proj-
ects with different designs, materials, processes and technol-
ogies—this tribal knowledge is vital to developing a smooth-
running and cost-efficient design and
production process.
Working with the customer in the con-
cept and/or design stages enables the
contract manufacturer (CM) to develop
the best possible design and production
process to meet or exceed customer re-
quirements in a timely and cost-efficient
manner. Human factors engineering es-
pecially is important to do early on and
is greatly enhanced by rapid prototyping
and 3-D printing. Getting the designs off
the computer screen and into people’s
hands is critical for initiating thoughtful
dialogue about how the products can be
improved—especially how they are held
and used in the working environment.
These improvements are best identified
and tested through several rounds of
rapid prototyping.
Depending on the size of the project,
getting the contract manufacturer in-
volved in the concept stage can save up
to one-third of total production cost. This
also includes the CM’s help in determin-
ing the best way to invest funds during the
R&D phase of the project. When properly
targeted, R&D dollars can provide a sig-
nificant return on investment during the
design, production, and packaging stages.
When looking for a contract manufac-
turing partner, evaluate how the CM will
assist you through the entire process, from
conception to production and delivery.
Contract manufacturers should be eager
to be fully engaged in the concept and de-
velopment stages and bring considerable
medical device experience to the table. On-
site prototype capabilities are critical for
enabling engineers and fabricators to have
daily interaction regarding things that are
learned during prototype manufacturing,
so changes made to the design and key as-
pects of what makes the prototype work are
properly documented. It also is important
13.11.2013 10:13:47

that the CM uses the same computer-aided design software as
the customer so that all files are compatible, streamlining the
exchange process.
Cost goals typically drive every medical device project and
are best attained when the CM and the customer collaborate.
It’s hard for OEM engineers and design teams to keep up with
the latest in advanced materials, improved prototyping and in-
jection molding technologies, additive manufacturing and 3-D
printing capabilities, and sterilization and product delivery sys-
tems—all of which are evolving very quickly. The experts who
do have this up-to-date knowledge, however, are CMs and oth-
er vendors who work with a variety of clients and project types
across the medical device industry. By teaming up with CMs
during the concept and design stages to allow them to share
their industry-wide knowledge and experience, OEMs improve
their odds of developing a better product that meets or exceeds
their initial expectations, at a lower cost. v
Ron Litke and Chris Scifert, Ph.D., are engineering managers
with Holt, Mich.-based Orchid Orthopedic Solutions Inc.
Scifert has more than 12 years of experience including serv-
ing as senior manager of product development at Medtronic Spi-
nal and Biologics, where he executed engineering projects and
group management responsibilities for intradiscal and extradis-
ISO 9001:2008 & ISO 13485 Certified
July/August 2015 odtmag.com ODT • 79
Orthopedic Trends
cal dynamic stabilization systems and semi-rigid tumor/trauma
technologies. Scifert is a certified Lean Sigma green belt and
supported the continuing improvement efforts during his tenure
at Medtronic. Scifert’s additional experience includes managing
engineering projects as a senior engineer and project manager at
Smith & Nephew, focusing on early intervention knee and shoul-
der systems. Scifert received his bachelor’s degree in engineering
sciences and mechanics at the University of Tennessee and his
Ph.D. in biomedical engineering at the University of Iowa with
his doctoral dissertation titled, “A Finite Element Investigation
into the Biomechanics of Total Artificial Hip Dislocation.” Scifert
is based at Orchid’s facility in Memphis, Tenn.
Litke’s expertise is in the design and development of mechani-
cal systems and mechanisms. He has strong computer-aided
engineering experience coupled with solid manufacturing pro-
cess expertise including welding, forging, extrusion, casting and
machining. He also is certified through the American Society of
Mechanical Engineers as a Senior Level GD&T (geometric di-
mensioning and tolerancing) Professional. He was employed by
Cannondale and NextRnd, a contract engineering firm. Litke has
15 years of engineering experience, and received his bachelor’s
and master’s degrees in mechanical engineering from the Uni-
versity of Connecticut. He holds 11 patents or patent applica-
tions. Litke is based at Orchid’s facility in Shelton, Conn.
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Industry News
Single-Procedure Ratchet Developed by ECA Medical
E
CA Medical Instruments, a designer
and manufacturer of single-pro-
cedure torque-limiting and fixed-
driver surgical instruments and sterile-
packed procedural kits, has developed
what the company calls the “industry’s
first single-procedure surgical ratchet for
use by surgeons to secure orthopedic and
spine implants.”
The proprietary Model 300 Secure-Fast
ratcheting system is designed to reduce
surgical costs by more than $1,000 per pro-
cedure and to provide a pristine ratcheting
capability for securing screws, fasteners
and connectors used in demanding proce-
dures including spine, trauma and extrem-
ity implants. The ratchet is bi-directional
and fully cannulated. This, according to
the company, makes it well suited for
minimally invasive surgeries where speed,
safety and implant fixation are critical.
“The Secure-Fast single-procedure
ratchet is a novel first of its kind instrument
that will become every surgeon’s instru-
ment of choice for hospital and outpatient
ortho and spine implants,” said John Nino,
president and CEO of ECA Medical Instru-
ments.“The ease of use, versatility and abil-
ity to speed surgeries across the full range
of implants will make this ratchet a popular
and value-packed alternative to expensive
re-usable ratchets that require cleaning, re-
processing and re-sterilization.”     point or value.
The ECA Secure-Fast ratchet comes
configured with either an industry-stan-
dard AO or quarter-of-an-inch square
hub connector that can mate with legacy
stainless steel drivers and shafts used
across all types of surgeries.  The instru-
ment is bi-directional, making it ideal for
fixation, implant adjustments and extrac-
tions, company officials noted.
Unlike existing reusable ratchets, the Se-
cure-Fast ratchet is new for every procedure,
eliminating performance concerns, and can
be sterile-packed ready for surgery, thus re-
ducing the risk of surgical-site infection.
80 • ODT odtmag.com July/August 2015
ECA Medical’s new single-procedure surgical
ratchet. Image courtesy of ECA Medical.
“We’re helping implant designers and
surgeons transform healthcare econom-
ics by providing robust disposable instru-
ments and kits as alternatives to tradition-
al and costly reusable tools,” said James
Schultz, ECA’s executive vice president.
“The Secure-Fast ratchet complements
our family of disposable instruments
and procedural kits and underscores the
broader adoption of disposable instru-
ments and kits across hospitals and am-
bulatory surgical centers.”
According to Schultz, surgeons and
healthcare professionals—including pay-
ers—are focused on gaining the best pos-
sible outpatient outcomes at the best price
“Our single-use instruments and
kits and our new Secure-Fast ratchet
are cost-effective productivity tools for
orthopedic and neurosurgeons and im-
prove patient safety as every instrument is
new out of the box, sterile and ready for
surgery,” he said.
The new Model 300 series Secure-Fast
ratchet, which has worldwide patents
pending, will be available for sampling
in the coming weeks, ECA officials said.
OEM implant firms should contact their
ECA strategic account director for details.
According to figures cited by the com-
pany, there are more than 9 million frac-
ture repair and spine procedures globally
each year that require a surgical implant
and more than 80 percent can benefit
from use of a versatile, single-use ratch-
eting instrument.  More than $4 billion
in healthcare industry savings could be
achieved annually with widespread adop-
tion of disposable surgical fixation instru-
ments and kits.
ECA Medical Instruments, an Ameri-
can Capital company, was founded in
1979 and is based in Thousand Oaks, Ca-
lif. ECA’s products are developed for key
industry OEM implant makers and come
both sterile-ready and sterile-packed,
making them easy to inventory and ready
to use. The firm has manufactured and
delivered more than 30 million precision
torque instruments to manufacturers of
cardiac rhythm management, neuromod-
ulation, cardiovascular and orthopedic
and spine implants, resulting in more than
500 million precision surgical actuations.
Anniversary Wishes in
Order for Cadence Inc.
Staunton, Va.-based Cadence Inc., a con-
tract manufacturer of advanced products,
technologies and services to the medical,
life-science, and industrial markets, is

celebrating a milestone anniversary—30
years in business.
The company, originally founded as
Specialty Blades in 1985 by engineer
Martin Lightsey, was developed with the
concept of combining computer numeri-
cal control and razor-blade sharpening
technologies to address the needs of com-
panies that required high-performance,
custom-made blades.
“It’s the people and the culture that
have made this company a success,” said
Lightsey. “This has been the realization of
a dream 30 years in the making.”
Since the company’s inception, its ca-
pabilities and services have expanded
beyond its original scope. Cadence has
experienced substantial growth since
2003, company bigwigs said, with a fo-
cus on serving the medical device and
life-science markets, adding precision
metal process capabilities, injection mold-
ing and clean-room assembly to its list of
current capabilities.
Cadence now employs nearly 500
people worldwide. In addition to its head-
quarters in Staunton, the company has
other facilities in Massachusetts, Pennsyl-
vania, Rhode Island, Wisconsin, and the
Dominican Republic.
“We have a defined culture in a set of
values at Cadence where doing the right
things for our employees, customers and
shareholders matters,” said CEO Alan
Connor. “It’s what has allowed us to have
30 successful years and what will allow us
to have 30 more.”
Arlington Partners Buys
Avalign Technologies
Washington, D.C.-based private equity
firm Arlington Capital Partners is buy-
ing Lake Forest, Ill.-based Avalign Tech-
nologies Holdings Inc. from Roundtable
Healthcare Partners. Avalign is a full-ser-
vice precision manufacturer of implants
and instruments, specialty instrumenta-
tion, cutting tools, and cases and trays to
the orthopedic medical device and spe-
cialty surgical markets.
“Avalign is an established leader in
the large and growing orthopedic preci-
sion manufacturing market,” said Matt
July/August 2015 odtmag.com ODT • 81
Altman, a partner at Arlington Capital.
“Recognized across the industry for its
engineering and manufacturing capabili-
ties, Avalign provides significant value to
its [original equipment manufacturer]
partners through design improvement,
speed to market acceleration and cost
reductions. We look forward to partner-
ing with the Avalign management team
to support the company through its next
phase of growth.”
“We are extremely pleased to be part-
nering with Arlington Capital,” said For-
rest Whittaker, CEO of Avalign. “Avalign
is committed to improving patient out-
comes by providing best-in-class medi-
cal devices through our end to end capa-
bilities. We believe that Arlington Capital,
which has deep expertise and an impres-
sive track record in healthcare and preci-
sion manufacturing, is the ideal partner
to help us achieve our goals. We would
also like to thank RoundTable Healthcare
Partners for all of their support and part-
nership to date.”
RoundTable Healthcare Partners
founded Avalign in October 2005 through
the purchase of Instrumed International, a
German instrument manufacturer.  Since
entering the industry in 2005, RoundTable
built Avalign from a niche, family-owned
business into a platform with a complete
suite of high-precision manufacturing
capabilities and a reputation-building
strategy consisting of organic growth and
strategic acquisitions. RoundTable Health-
care Partners was founded in 2001.
In’Tech Medical Expands U.S. Biz
With Turner Medical Purchase
In’Tech Medical SAS, a developer and
contract manufacturer of orthope-
dic surgical instruments, has acquired
Turner Medical Inc.
According to officials with In’Tech,
the acquisition of Turner Medical im-
proves In’Tech’s manufacturing ex-
pertise, expands its U.S. business
and global capacity, and adds the
manufacturing of orthopedic implants
to its core business.
Financial details of the deal were
not disclosed.
Industry News
Founded in France in 2000, In’Tech
Medical is a privately held company
that manufactures orthopedic surgi-
cal instruments and implants. Prior to
the acquisition, the company employed
300, and had offices and production
facilities in Europe and the United
States. The company’s U.S. site is in
Memphis, Tenn.
“In’Tech Medical’s demonstrated
leadership in contract manufacturing
and proprietary orthopedic instrument
design is greatly enhanced with the ad-
dition of Turner Medical, as we continue
to constantly strive to better serve our
customers,” said Laurent Pruvost, pres-
ident of In’Tech Medical. “If increasing
our market share and product line are
great news, what I most value is the
unique talent that Turner Medical has
developed over the past 35 years. The
management’s know-how, combined
with that of In’Tech Medical’s, turns the
group into a creative engineering and
problem-solving powerhouse; a serious
asset for our clients and a tangible com-
petitive advantage.”
“At Turner Medical, we are all about
customer satisfaction and family val-
ues,” said Bill Turner, president. “The
company was founded by my father
John Turner in 1985. We took it from a
local machine shop to a nationally rec-
ognized organization with the highest
quality standards, latest technologies,
and most efficient processes, always
designed to meet and exceed our cli-
ent’s needs, as well as save them time
and money. Merging with In’Tech Med-
ical allows Turner Medical to further de-
velop and provide the services that are
most beneficial to our clients, both in
the U.S. and internationally.”
In’Tech Medical’s 2015 consolidated
sales forecast now is $65 million, equal-
ly balanced between Europe and the
United States, produced by close to 500
employees globally. As a wholly owned
subsidiary of In’Tech Medical, Turner
Medical will continue to operate out of
its headquarters in Athens, Ala., under
its current name, becoming the U.S.
platform for the newly formed group.
Industry News
TransPerfect Establishes
New Device Division
TransPerfect, one of the world’s largest
providers of language services and content
management technology to the medical
device industry, has created a new busi-
ness division called TransPerfect Medical
Device Solutions. The division combines
the ISO 13485- and ISO 14971-certified
systems and patented risk management
processes of TransPerfect’s Crimson Life
Sciences division with a range of integrat-
ed services and technologies across the
TransPerfect family of companies.
“Over the past 10 years, TransPerfect
has pursued a strategy that creates value
for life-sciences clients by combining
validated automation technology with
compliant processes,” said Marc Miller,
division president for TransPerfect Medical
Device Solutions. “Now, we’ve success-
fully completed the integration and spe-
cialization effort necessary to produce the
first set of core solutions for device mak-
ers—this is the basis of TransPerfect Medi-
cal Device Solutions.”
In addition to traditional à la carte
services, such as labeling and market-
ing translations, TransPerfect Medical
Device Solutions includes a range of
integrated technologies and services for
manufacturers’ emerging content needs,
including: translation process automa-
tion technology; labeling automation
solutions; Validated XML publishing
systems; guided authoring/author auto-
mation; automated website localization;
software translation, verification, and
testing; formatting/layout services and
technology; e-learning development
and localization; vigilance and e-clinical
technology solutions; multilingual digi-
tal media services; and patent, litigation
and contract support.
The division’s flagship solution is the
EnCompass System for labeling automa-
tion. The EnCompass System combines
guided authoring, advanced XML content
management, and GlobalLink process au-
tomation technology for maximum label-
ing automation and effectiveness.
“With the EnCompass System, device
makers can reduce both the cost and risk
82 • ODT odtmag.com July/August 2015
of their multilingual labeling by over 50
percent,” Miller said.
TransPerfect has global headquarters
in New York, N.Y., with regional head-
quarters in London, United Kingdom, and
Hong Kong, China.
Lucideon’s Orthopedic
Implant Services Now Offers
Impingement Testing
United Kingdom-based Lucideon, an in-
ternational materials technology compa-
ny, has added impingement testing to its
range of services for orthopedic implant
manufacturers.
Impingement testing assesses wear
caused by motion beyond the joint’s nat-
ural limit, mimicking in-vivo conditions.
Such testing can help manufacturers to
approximate the longevity of an implant,
but more importantly, predict its ability to
withstand abnormal conditions; as such,
impingement testing often is included at
the design stage of prosthetic development.
The new method for impingement
wear testing of hip implants has been vali-
dated to ASTM F2582-14 and is comple-
mentary to Lucideon’s other wear-testing
services, which include hip testing to ISO
14242 and knee testing to ISO 14243, both
of which are ISO 17025 accredited.
“Impingement testing uses differ-
ent setup, load and motion profiles than
standard wear testing, reflecting the fact
that a joint in-vivo would very rarely be
under maximum force whilst impinging
but accounting for the additional stresses
the implant would be under if it did,” said
Gemma Budd, healthcare business man-
ager at Lucideon.“By performing this test-
ing we are able to help manufacturers see
how their product will perform in-vivo,
enabling them to assess its longevity and
foresee potential failure modes.”
Budd said the company is “committed”
to developing centers of excellence for hip
and knee wear testing in the United States
and in the United Kingdom, adding that
Lucideon has invested 1 million British
pounds (approximately $1.57 million) in
state-of-the-art facilities on both sides of
the Atlantic.
“We also plan to develop and validate
methods for other joints, such as ankles
and shoulders,” Budd added.
Lucideon offers a range of tribology
services for orthopedic implant manufac-
turers, including failure, debris and wear
pattern analysis, in addition to other ana-
lytical capabilities, such as surface analysis
and materials characterization.
Lucideon provides materials develop-
ment, testing and assurance to custom-
ers in a wide range of sectors, including
healthcare, construction, ceramics and
power engineering.
Materialise and Consensus
Orthopedics Expand Partnership
Materialise N.V., a Belgium-based pro-
vider of 3-D software and printing solu-
tions, and Consensus Orthopedics Inc. are
expanding their association.
El Dorado Hills, Calif.-based Consen-
sus plans to use the Acetabular Cup Ori-
entation (ACO) Hip Guide System from
Materialise. In June, the companies an-
nounced a partnership using knee-imag-
ing technology from Materialise.
The Materialise ACO Hip Guide System,
a platform consisting of 3-D surgical plan-
ning software and patient-specific surgical
guides for hip surgery, allows surgeons to
predictably plan hip procedures based on
the patient’s unique anatomy and structural
damage. Based on that pre-operative plan,
patient-specific guides are designed and
3-D printed for use during surgery.
Jeroen Dille, director of Materialise’s
Clinical Unit, said: “Through this grow-
ing partnership, more surgeons will have
access to 3-D planning and printing solu-
tions, which ultimately means that more
patients can benefit from this technology.
Since the start of Materialise 25 years ago,
our mission has been to create meaningful
3-D printing applications for a better and
healthier world. This partnership is per-
fectly in line with that mission statement.”
“Surgical outcomes have a higher rate
of predictability once our surgeons have
access to preoperative planning and are
able to use patient-specific guides based
on a patient’s CT (computed tomography
imaging),” said Colleen Gray, president
and CEO of Consensus. v
People News
Smith &Nanotechnology
Senior Nephew PursuesSpecialist
“Lifetime”
Hired
Implant
by Titan Spine
M
equon, Wis.-based Titan Spine,
a medical device surface tech-
nology company focused on
developing spinal interbody fusion im-
plants, has named Jim Sevey as its new
senior nanotechnology specialist. The ap-
pointment follows the company’s receipt
of 510(k) clearance from the U.S. Food
and Drug Administration (FDA) to mar-
ket the Endoskeleton line of interbody
fusion implants featuring its next gen-
eration Nanolock surface technology and
precedes the company’s full commercial-
ization of the new line, planned for the
fourth quarter of this year. The Nanolock
surface represents the only FDA-cleared
nanotechnology for spinal implant appli-
cations, the company reports.
Sevey’s role
will include lead-
ing the educational
initiatives to fur-
ther demonstrate
and communicate
the scientific evi-
dence supporting
the advantages of
Sevey Titan Spine’s unique
Nanolock surface
technology. The surface features an in-
creased amount of nano-scaled textures
that result in the up-regulation of a great-
er amount of osteogenic and angiogenic
growth factors critical for bone growth
and fusion as compared to PEEK (poly-
ether ether ketone) and the company’s
current surface.
“As our body of science continues to
grow, we identified the need to bring on-
board someone of Jim’s caliber to educate
the spinal surgeon community and our
sales force on the science and associat-
ed benefits of our current and Nanolock
proprietary surface technologies,” said
Kevin Gemas, president of Titan Spine.
“With more than 22 years of experience
with medical devices and biomaterials,
July/August 2015 odtmag.com ODT • 83
Jim is the right person to lead these ef-
forts. One of Jim’s initial tasks will be to
clearly differentiate the science of our
nanotechnology platform from those that
claim to have nanotechnology but have
not been cleared by the FDA to do so. We
are proud to add Jim to our ever-growing
scientific team.”
“The spine industry is beginning to
recognize ‘nanotechnology’ as more than
a marketing concept and now as a design
approach that has the potential to im-
prove spinal fusion results for patients,”
commented Barbara Boyan, Ph.D., dean
of the School of Engineering at Virginia
Commonwealth University, and lead au-
thor of several studies supporting Titan
Spine surfaces. “Titan Spine has been at
the forefront of this charge for nearly a
decade, conducting studies to evaluate
and refine the benefits of nanotechnol-
ogy for interbody fusions. I look forward
to working closely with Jim to further
these efforts.”
Before joining Titan Spine, Sevey held
several positions at DePuy Synthes Bio-
materials, including most recently, man-
ager, biomaterials technical specialist. In
this role, he generated multidivisional
sales of osteobiologic product lines by
providing clinical and technical consult-
ing, training, and education for surgeons,
residents, operating room personnel, and
sales consultants. Prior to DePuy Synthes
Biomaterials, Sevey was part of the found-
ing team of Skeletal Kinetics LLC, (Cu-
pertino, Calif.) as director of marketing.
Sevey holds a bachelor of science degree
in health science from St. Mary’s College
of California in Moraga.
The full line of Endoskeleton devices
features Titan Spine’s proprietary implant
surface technology, which consists of a
unique combination of roughened to-
pographies at the macro, micro, and cel-
lular levels. This combination of surface
topographies is designed to create an
optimal host-bone response and actively
participate in the fusion process by pro-
moting the up-regulation of osteogenic
and angiogenic factors necessary for bone
growth, encouraging natural production
of bone morphogenetic proteins, down-
regulating inflammatory factors, and cre-
ating the potential for a faster and more
robust fusion.
NuVasive Revamps Executive Team
San Diego, Calif.-based spine firm NuVa-
sive Inc. continues to make changes in its
executive ranks.
In May, the company named a new
chairman and CEO following the depar-
ture of long-time head Alex Lukianov,
who stepped down earlier in the year after
he failed to comply with company reim-
bursement and personnel policies.
According to the company, the latest
changes will create a “world-class leader-
ship team to drive
NuVasive’s next
phase of growth and
success as the in-
novation pioneer in
spine.” The new ap-
pointments include
current NuVasive ex-
ecutives along with
Lucier recent hires.
“Our abil-
ity to accelerate our
growth, continue to take market share in
the global spine market, meet the needs of
our customers and generate value for our
shareholders has never been stronger,”
said Gregory T. Lucier, chairman and CEO
of NuVasive.“With this incredibly dynamic
leadership team and new roles and re-
sponsibilities defined, we can move even
faster to deliver game-changing innova-
tion, expand globally, drive operational ef-
ficiencies and inspire our ‘A-Player’ share
owners to be the best they can be.”
NuVasive’s executive leadership team,
People News
reporting directly to Lucier, includes:
•  Pat Miles, president and chief oper-
ating officer (COO): Miles has been with
NuVasive for 14 years. In 2015, he was
appointed president and COO, respon-
sible for leadership and management of
NuVasive’s global products and services,
as well as operational duties, includ-
ing customer fulfillment, manufacturing,
supply chain management and quality
engineering. As COO, Miles leads NuVa-
sive’s Global Operations, Product Devel-
opment and Marketing Services teams,
which combine the company’s develop-
ment and operational expertise within
one organization. Most recently, he has
overseen the launch of Integrated Global
Alignment, or iGAT, a proprietary, pro-
cedurally integrated, digital platform of
specialized products designed to help
surgeons achieve more precise spinal
column alignment.
•  Matt Link, president, U.S. Commer-
cial: Link joined NuVasive in 2006. He most
recently served as the company’s president,
U.S. Sales and Service. In this role, he led
the strategic integration of the U.S. sales
and service functions. With that integration
complete, the company is renaming its U.S.
Sales and Service division U.S. Commercial
to better reflect NuVasive’s broad efforts to
integrate sales, service and specialized cus-
tomer marketing programs. Link now will
focus on driving greater sales force efficien-
cies and the further development of NuVa-
sive’s commercial strategies.
•  Quentin Blackford, executive vice
president and chief financial officer: Black-
ford has served as chief financial officer of
NuVasive since 2014. He joined the com-
pany in 2009 as corporate controller and
has more than 15 years of experience in
the healthcare industry. During his tenure,
Blackford has been responsible for all ele-
ments of the company’s finance, accounting
and investor relation functions, including
the development of the company’s financial
strategic planning and analysis.
•  Jason Hannon, executive vice presi-
dent, international and general counsel:
Hannon assumes the role of executive vice
president, international, from Russell Pow-
ers, who continues to serve as an executive
84 • ODT odtmag.com July/August 2015
vice president and a member of the execu-
tive leadership team at NuVasive and will
focus on NuVasive’s expansion into greater
China. Hannon has extensive experience at
NuVasive in the areas of corporate develop-
ment, mergers and acquisitions, and regu-
latory and legal. He joined the company in
2005, most recently serving as executive vice
president, corporate development and gen-
eral counsel. In his new role, Hannon will
be responsible for NuVasive’s business and
commercial operations outside of the Unit-
ed States, including leading the company’s
international expansion opportunities.
•  Carol Cox, executive vice president,
strategy, corporate development and exter-
nal affairs: Cox has more than 20 years of
senior level experience in cross-functional
corporate roles in the healthcare sector.
She joined the company in 2014, most re-
cently serving as executive vice president
of corporate affairs and human resources.
In her new role, Cox will be responsible
for leading NuVasive’s corporate develop-
ment and mergers and acquisitions strat-
egy, leveraging communications, investor
relations and government affairs channels
in support of the company’s strategic priori-
ties, and creating a corporate marketing and
brand team.
• Pete Leddy, Ph.D., executive vice
president, human resources and corporate
integrity: Leddy assumes leadership of the
company’s human resources, compliance,
regulatory and facilities functions after
serving as a member of NuVasive’s board
of directors since 2011, from which he has
resigned. Leddy brings to this newly cre-
ated role more than 25 years of senior level
global human resources experience with
Dell, Taylor Made, PepsiCo, Life Technolo-
gies and Doubletree Hotels. Leddy’s exten-
sive experience includes successfully imple-
menting and leading best-in-class human
resources strategies that drove operational
excellence and several major employee and
cultural transformation initiatives.
In addition, NuVasive has begun a
search for a chief information officer, a new-
ly created role, and a new general counsel to
replace Hannon, both of whom would also
be part of the executive leadership team and
report to Lucier.
NuVasive offers a spine portfolio of more
than 90 products developed to improve
spine surgery and patient outcomes. The
company’s principal procedural solution is
its Maximum Access Surgery, or MAS, plat-
form for lateral spine fusion
For more details on NuVasive’s restruc-
turing, see its write-up in the Top 10 com-
panies listing.
Mazor Robotics Creates VP of
Product Management Position
Mazor Robotics Ltd., a Caesarea, Israel-
based developer of innovative guidance
systems and complementary products, has
added Anat Kaphan to the company’s ex-
ecutive ranks as vice president of marketing
and product management, a newly estab-
lished role with product development and
corporate marketing being the primary re-
sponsibilities. Kaphan will be based at the
company’s global headquarters in Israel and
report directly to Ori Hadomi, Mazor’s CEO,
and will be a member of the company’s ex-
ecutive leadership team.
Kaphan has more than 15 years of ex-
perience in product development and
strategy and previously has held several
product, marketing and business devel-
opment positions in leading medical de-
vice companies, such as Philips Medical
Systems and Lumenis Ltd. She holds a
bachelor’s degree in economics and ac-
counting from Haifa University and an
M.B.A. in international marketing from
Tel Aviv University.
“I am excited to have Anat join Mazor
and I look forward to her being a valued
member of the executive team. She has de-
veloped and successfully executed strategic
business plans for new products throughout
her career and we are looking forward to the
contributions she will make to the corporate
team,”said Hadomi.“Mazor is an innovative
company and our objective is to continually
deliver product enhancements. Anat will
ensure that we are proactively addressing
the market’s evolving needs and maintain-
ing a high level of surgeon satisfaction.”
Mazor Robotics develops robotic-based
technology. The company’s Renaissance
Guidance System currently is used for spine
and brain procedures. v
Events Calendar
September
Sept. 3-4:  Eurospine, Bella Center,
Copenhagen, Denmark. More info: +49
3641 311 63 15; www.eurospine2015.eu
Sept. 9: MedtechVision 2015: Women in
Health, Four Seasons Palo Alto, Palo Alto,
Calif. More info: jacque@medtechwomen.
org; www.medtechwomen.org
Sept. 17-19: 36th SICOT Orthopaedic World
Congress, Baiyun International Convention
Center, Guangzhou, China. More info: +32
2 648 68 23; www.sicot.org/guangzhou
Sept. 21-23: World Congress and Expo on
Medical Devices, Hyatt Regency Orlando
International Airport, Orlando, Fla. More
info: (650) 268-9744; medicaldevices.
omicsgroup.com
Sept. 25: 2015 Medical Technology Executive
Forum, Crowne Plaza Cabana Hotel, Palo
Alto, Calif. More info: (202) 354-7171;
www.medicaldevices.org
Sept. 29-30: MPO Summit, Stein Eriksen
Lodge, Park City, Utah. More info: (201)
880-2243; www.mposummit.com
Sept. 30-Oct. 3: International Society for
Technology in Arthroplasty 28th Annual
Congress, Hilton Hotel, Vienna, Austria.
More info: (916) 432-3550; www.
istaonline.org
October
Oct. 5-7: AdvaMed 2015, San Diego
Convention Center, San Diego, Calif. More
info: (202) 434-7213; www.advamed.org
Oct. 6-8: S.M.A.R.T. Medical Devices
Conference, Berlin, Germany. More
info: +421-2-3220-2200; www.ebcg.com
Oct. 14-17: North American Spine Society
30th Annual Meeting, Chicago, Ill. More
info: (630) 230-3600; www.spine.org
July/August 2015 odtmag.com ODT • 85
MPO Summit Returns to Utah
F
or 10 years, in U.S. and international medtech manufacturing hubs, Orthopedic
Design & Technology’s sister publication, Medical Product Outsourcing’s conference
series has provided the medical device industry with the most comprehensive
programs, addressing critical medical device outsourcing and manufacturing issues.
This year, MPO returns to Utah. The MPO Summit-Utah will tap into the state’s grow-
ing medical device market. Utah’s life-sciences industry boasts more than 26,800 em-
ployees, making it a leader among Western states for life-science businesses per capita
and second for overall industry growth. In addition, state universities bring in more
than $400 million annually in research grants. Building from such statistics, this inter-
active networking and educational event will gather local and out-of-state industry
experts for a forum to discuss timely industry topics and provide tools to compete and
grow in today’s challenging business climate.
The conference will open with a keynote address delivered by Robert Grajew-
ski, M.P.A., M.B.A., president of Edison Nation Medical. More than an incubator,
Edison Nation takes product ideas from any stage of development and helps the
inventor make the idea a reality. Grajewski will address bringing open innovation
to healthcare invention.
The sessions featured at this year’s event include a panel discussion with and
about women in medtech hosted by Maria Shepherd, founder of Data Decision
Group. John Langell, M.D., Ph.D., M.P.H., surgeon, assistant professor, and execu-
tive director of the Center for Medical Innovation at the University of Utah, will
present a discussion on engaging universities and medical device companies in
new product creation. His forum will be followed by an address by Secure BioMed
Evaluations President Linda Braddon, Ph.D., on getting medical devices to market
faster. The day will wrap up with a talk on the MedAccred accreditation process
and a case study presentation on the long-term impact of supplier consolidation. A
reception—including entertainment—will end the day.
The second day of the conference features an in-depth tour of Nelson Labo-
ratories Inc.’s facilities in Salt Lake City. Company President/CEO Jeffery Nelson
will introduce the experience. The tour will include views into several of Nelson
Labs’ capabilities, including biocompatibility, sterility, protective barriers, package
testing and validations, and bioburden and radiation sterilization. Two interactive
workshops on the U.S. Food and Drug Administration’s unique device identification
mandate and offshoring guidance will complete the final day.
The MPO Summit will take place Sept. 29-30 at the Stein Eriksen Lodge in Park
City, Utah. For more information, call (201) 880-2243 or visit www.mposummit.com.
Oct. 21-22: Southern California Design-2- Oct. 25-28: Cleveland Clinic 2015 Medical
Part Show, Pasadena Center, Pasadena, Calif. Innovation Summit, Cleveland, Ohio. More
More info: (800) 225-4535; www.D2P.com info: (216) 444-0141; clevelandclinic.org v
Have a Meeting to Announce?
Send all meeting announcements to:
Orthopedic Design & Technology
70 Hilltop Road, Third Floor • Ramsey, N.J. 07446
Phone: (201) 880-2273 •  Fax: (201) 825-0553
E-mail: rarrowsmith@rodmanmedia.com
Classifieds
ADHESIVES, SEALANTS AND COATINGS CONSULTANTS

Nelson Laboratories Inc..................................................... 800-826-2088

One Component UV10TKMed 6280 South Redwood Rd., Salt Lake City, UT 84123
OKAY Industries, Inc.......................................................... 860-225-8707
200 Ellis St., New Britain, CT 06050
Withstands Repeated Sterilization Cycles Orchid Orthopedic Solutions............................................ 517-694-2300
1489 Cedar St., Holt, MI 48842
• USP Class VI certified Triangle.................................................................................. 201-825-1212
• Meets ISO 10993-5 25 Park Way, Upper Saddle River, NJ 07458

for cytotoxicity
• High glass transition
temperature CONTRACT MANUFACTURING SERVICES
• Optically clear
maxon precision motors, inc............................................. 508-677-0520
101 Waldron Rd., Fall River, MA 02720
Paragon Medical.................................................................. 574-594-2140
8 Matchett Industrial Park Dr., Pierceton, IN 46562
www.masterbond.com | +1 201.343.8983 SMC Ltd................................................................................ 715-247-3500
ANALYSIS/TESTING 330 SMC Dr., Somerset, WI 54025
Swiss-MedTech.................................................................... 401-333-8888
Cadence, Inc......................................................................... 800-252-3371 23-A Ashton Parkway, Cumberland, RI 02684
9 Technology Dr., Staunton, VA 24401
Orchid Orthopedic Solutions............................................ 517-694-2300
1489 Cedar St., Holt, MI 48842
Paragon Medical
8 Matchett Industrial Park Dr., Pierceton, IN 46562 DELIVERY SYSTEMS

Cadence, Inc......................................................................... 800-252-3371

9 Technology Dr., Staunton, VA 24401
Orchid Orthopedic Solutions............................................ 517-694-2300
BIOSKILLS LABORATORY 1489 Cedar St., Holt, MI 48842
Paragon Medical.................................................................. 574-594-2140
Paragon Medical.................................................................. 574-594-2140 8 Matchett Industrial Park Dr., Pierceton, IN 46562
8 Matchett Industrial Park Dr., Pierceton, IN 46562

DESIGN AND MANUFACTURING

CASTING
Estes Design and Manufacturing, Inc............................. 317-899-2203
Orchid Orthopedic Solutions............................................ 517-694-2300 470 S. Mitthoeffer Rd., Indianapolis, IN 46229
1489 Cedar St., Holt, MI 48842 Paragon Medical.................................................................. 574-594-2140
Paragon Medical.................................................................. 574-594-2140 8 Matchett Industrial Park Dr., Pierceton, IN 46562
8 Matchett Industrial Park Dr., Pierceton, IN 46562 SMC Ltd................................................................................ 715-247-3500
330 SMC Dr., Somerset, WI 54025

COMPONENT PARTS
fiNANCIAL ADVISORS
Cadence, Inc......................................................................... 800-252-3371
9 Technology Dr., Staunton, VA 24401 P&M Corporate Finance, LLC.......................................... 312-602-3636
Centex Machining, Inc....................................................... 512-255-1477 225 W. Washington St., Ste. 2700, Chicago, IL 60606
1513 Sam Bass Rd., Roundrock, TX 78681
Marox Corporation............................................................. 413-536-1300
373 Whitney Ave., Holyoke, MA 01040
Orchid Orthopedic Solutions............................................ 517-694-2300 FORGING
1489 Cedar St., Holt, MI 48842
Paragon Medical ................................................................. 574-594-2140 Orchid Orthopedic Solutions............................................ 517-694-2300
8 Matchett Industrial Park Dr., Pierceton, IN 46562 1489 Cedar St., Holt, MI 48842
Tegra Medical....................................................................... 508-541-4200 Paragon Medical.................................................................. 574-594-2140
9 Forge Park, Franklin, MA 02038 8 Matchett Industrial Park Dr., Pierceton, IN 46562
Triangle.................................................................................. 201-825-1212 Tecomet................................................................................. 978-642-2400
25 Park Way, Upper Saddle River, NJ 07458 115 Eames St., Wilmington, MA 01887

86 • ODT odtmag.com July/August 2015

 Classifieds

IMPLANT MANUFACTURING LOW COST COUNTRY MANUFACTURING

Centex Machining, Inc....................................................... 512-255-1477 Paragon Medical.................................................................. 574-594-2140

1513 Sam Bass Rd., Roundrock, TX 78681 8 Matchett Industrial Park Dr., Pierceton, IN 46562
Eagle Stainless Tube & Fabrication Inc........................... 800-528-8650
10 Discovery Way, Franklin, MA 02038
HD Surgical.......................................................................... 877-826-8250
1507 Clyde Waite Dr., Bristol, PA 19007
Marox Corporation............................................................. 413-536-1300 MACHINERY/TOOLING
373 Whitney Ave., Holyoke, MA 01040
Cleaning Technologies Group, LLC................................. 800-248-9274
OKAY Industries, Inc.......................................................... 860-225-8707
4933 Provident Dr., Cincinnati, OH 45246
200 Ellis St., New Britain, CT 06050
Huron Tool & Cutter Grinding Co. Inc............................ 631-420-7000
Orchid Orthopedic Solutions............................................ 517-694-2300
2045 Wellwood Ave., Farmingdale, NY 11735
1489 Cedar St., Holt, MI 48842
NTK Cutting Tools............................................................... 248-668-0100
Paragon Medical ................................................................. 574-594-2140
46929 Magellan Dr., Wixom, MI 48393
8 Matchett Industrial Park Dr., Pierceton, IN 46562
Tecomet................................................................................. 978-642-2400
115 Eames St., Wilmington, MA 01887
Triangle.................................................................................. 201-825-1212
25 Park Way, Upper Saddle River, NJ 07458 PACKAGING/STERILIZATION

Atlas Vac Machine, LLC...................................................... 513-407-3513

PO Box 42633, Cincinnati, OH 45242
Orchid Orthopedic Solutions............................................ 517-694-2300
INSTRUMENT MANUFACTURING 1489 Cedar St., Holt, MI 48842
Paragon Medical.................................................................. 574-594-2140
Cadence, Inc......................................................................... 800-252-3371
8 Matchett Industrial Park Dr., Pierceton, IN 46562
9 Technology Dr., Staunton, VA 24401
Centex Machining, Inc....................................................... 512-255-1477
1513 Sam Bass Rd., Roundrock, TX 78681
ECA Medical Instruments................................................ 805-376-2509
2193 Anchor Court, Thousand Oaks, CA 91320
HD Surgical.......................................................................... 877-826-8250
PLATING & COATING
1507 Clyde Waite Dr., Bristol, PA 19007
The Electrolizing Corp. of OHIO...................................... 800-451-8655
Huron Tool & Cutter Grinding Co. Inc............................ 631-420-7000
1325 E. 152nd St., Cleveland, OH 44112
2045 Wellwood Ave., Farmingdale, NY 11735
Marox Corporation............................................................. 413-536-1300
373 Whitney Ave., Holyoke, MA 01040
OKAY Industries, Inc.......................................................... 860-225-8707
200 Ellis St., New Britain, CT 06050
Orchid Orthopedic Solutions............................................ 517-694-2300 RAW MATERIALS
1489 Cedar St., Holt, MI 48842
Paragon Medical ................................................................ 574-594-2140 Boston Centerless................................................................ 800-343-4111
8 Matchett Industrial Park Dr., Pierceton, IN 46562 11 Presidential Way, Woburn, MA 01801
Precision Medical Technologies, Inc. (pmt)................... 574-267-6385 Edge International........................................................... 800-628-EDGE
2059 N. Pound Dr., Warsaw, IN 46582 330 Leo St., Dayton, OH 45404
Triangle.................................................................................. 201-825-1212
25 Park Way, Upper Saddle River, NJ 07458

STERILIZATION

LASER PROCESSING Sterigenics International LLC........................................... 800-472-4508

2015 Spring Rd., Oak Brook, IL 60523
Cadence, Inc......................................................................... 800-252-3371
9 Technology Dr., Staunton, VA 24401
Centex Machining, Inc....................................................... 512-255-1477
1513 Sam Bass Rd., Roundrock, TX 78681
Eagle Stainless Tube & Fabrication Inc........................... 800-528-8650
10 Discovery Way, Franklin, MA 02038
Orchid Orthopedic Solutions............................................ 517-694-2300
1489 Cedar St., Holt, MI 48842
Paragon Medical.................................................................. 574-594-2140
8 Matchett Industrial Park Dr., Pierceton, IN 46562
Tegra Medical....................................................................... 508-541-4200
9 Forge Park, Franklin, MA 02038

July/August 2015 odtmag.com ODT • 87

Classified

SURFACE PREPARATION SURFACE TREATMENT

Cadence, Inc......................................................................... 800-252-3371 Cadence, Inc......................................................................... 800-252-3371

9 Technology Dr., Staunton, VA 24401 9 Technology Dr., Staunton, VA 24401
Cleaning Technologies Group, LLC................................. 800-248-9274 Cleaning Technologies Group, LLC................................. 800-248-9274
4933 Provident Dr., Cincinnati, OH 45246 4933 Provident Dr., Cincinnati, OH 45246
Eagle Stainless Tube & Fabrication Inc........................... 800-528-8650 Eagle Stainless Tube & Fabrication Inc........................... 800-528-8650
10 Discovery Way, Franklin, MA 02038 10 Discovery Way, Franklin, MA 02038
Miraclean.............................................................................. 716-763-4343 Orchid Orthopedic Solutions............................................ 517-694-2300
4743 Cramer Dr., Ashville, NY 14710 1489 Cedar St., Holt, MI 48842
Orchid Orthopedic Solutions............................................ 517-694-2300 Paragon Medical.................................................................. 574-594-2140
1489 Cedar St., Holt, MI 48842 8 Matchett Industrial Park Dr., Pierceton, IN 46562
Paragon Medical ................................................................. 574-594-2140 Tecomet................................................................................. 978-642-2400
8 Matchett Industrial Park Dr., Pierceton, IN 46562 115 Eames St., Wilmington, MA 01887

Search the Buyer’s Guide online at

odtmag.com/bg

88 • ODT odtmag.com July/August 2015

Ad Index
Advertiser Page No. Telephone Website

Atlas Vac Machine, LLC................................................................ 45....................................... 513-407-3513..................................................www.atlasvac.com

Boston Centerless......................................................................... 79....................................... 800-343-4111...................................www.bostoncenterless.com

Cadence, Inc.................................................................................. 65....................................... 800-252-3371............................................ www.cadenceinc.com

Centex Machining, Inc.............................................................. 49, 59.................................... 512-255-1477.................................. www.centexmachining.com

Cleaning Technologies Group, LLC............................................ 57....................................... 800-248-9274................................................. www.ctgclean.com

Eagle Stainless Tube & Fabrication Inc....................................... 10....................................... 800-528-8650...............................................www.eagletube.com

ECA Medical Instruments............................................................ 35....................................... 805-376-2509........................................... www.ecamedical.com

Edge International........................................................................ 55...................................... 800-628-EDGE............................................... www.edgeintl.com

The Electrolizing Corp. of OHIO................................................. 57....................................... 800-451-8655.............................................. www.electrohio.com

Engineering & Quality Solutions................................................ 51....................................... 719-635-0915................www.engineeringqualitysolutions.com

Estes Design and Manufacturing, Inc......................................... 41....................................... 317-899-2203......................................... www.estesmedical.com

HD Surgical................................................................................... 43....................................... 877-826-8250........................................... www.HDSurgical.com

Huron Tool & Cutter Grinding Co. Inc....................................... 11....................................... 631-420-7000.............................................. www.hurontool.com

In’Tech Medical ............................................................................ 47....................................... 669-247-7686............................www.ThePrototypeGarage.com

Marox Corporation....................................................................... 53....................................... 413-536-1300.................................................... www.marox.com

maxon precision motors, inc........................................................ 78....................................... 508-677-0520................................... www.maxonmotorusa.com

Miraclean....................................................................................... 10....................................... 716-763-4343.............................................. www.miraclean.com

MPO Summit.............................................................................Cov. 3.................................... 201-825-2552.......................................... www.mposummit.com

Nelson Laboratories Inc............................................................... 67....................................... 800-826-2088.............................................www.nelsonlabs.com

NTK Cutting Tools........................................................................ 39....................................... 248-668-0100..................................... www.ntkcuttingtools.com

OKAY Industries, Inc.................................................................Cov. 2.................................... 860-225-8707................................................. www.okayind.com

Orchid Orthopedic Solutions............................................... Cov. Tip, 5................................ 517-694-2300......................................... www.orchid-ortho.com

P&M Corporate Finance, LLC .................................................... 61....................................... 312-602-3636...................................................... www.pmcf.com

Paragon Medical........................................................................Cov. 4.................................... 574-594-2140....................................www.paragonmedical.com

Precision Medical Technologies, Inc. .......................................... 63....................................... 574-267-6385............................................ www.premedtec.com

Siemens.......................................................................................... 9........................................800-SIEMENS.......................................... www.usa.siemens.com

SMC Ltd. ...................................................................................... 27....................................... 715-247-3500....................................................www.smcltd.com

Sterigenics International LLC..................................................... 37....................................... 800-472-4508............................................. www.sterigenics.com

Swiss-MedTech............................................................................. 69....................................... 401-333-8888......................................www.swiss-medtech.com

Tecomet.......................................................................................... 3........................................ 978-642-2400................................................. www.tecomet.com

Tegra Medical................................................................................ 13....................................... 508-541-4200........................................ www.tegramedical.com

Triangle........................................................................................... 7........................................ 201-825-1212........................................... www.trianglemfg.com

July/August 2015 odtmag.com ODT • 89

The Last Word
A Look Outside the Top 10: Orthopedic Startups Making a Mark
Ranica Arrowsmith • Associate Editor
O
rthopedic Design & Technology’s Top
10 issue highlights giants in the
industry, providing insight into the
successes and pitfalls experienced by the
companies in orthopedic technology that
bring in the most money. On the oppo-
site end of the spectrum are the emerg-
ing companies that are revolutionizing
their own fields in numerous small and
not-so-small ways. With an aging popu-
lation and new technology that allows
for more customizable, niche products,
more people that need specialized medi-
cal technology now are able to receive
good care to solve unique problems from
startups catering to specific needs. For in-
stance, San Francisco, Calif.-based startup
Standard Cyborg is making a 3-D printed,
customized waterproof leg for amputees
that’s reportedly 28 times cheaper than a
normal walking prosthetic leg; and Roch-
ester, N.Y.-based Balance Engineering Inc.
is commercializing a technology that has
already helped football players and college
athletes improve their balance after con-
cussive trauma.
Let’s take a look at some of the small
companies making big splashes:
Standard Cyborg was founded by en-
gineer Jeff Huber, who also is an ampu-
tee.  For most of his  life, Huber has used
a prosthetic leg. He was born with a con-
genital birth defect that left him without
a fully formed fibula. As a growing child,
Huber would get a new leg every nine
months or so, a familiar and expensive
problem for children who need prosthet-
ics. Once he became an adult, insurance
only would cover a new leg every three to
five years. His current leg costs $23,000;
for patients who are above-the-leg ampu-
tees, it can cost double. In his own Em-
eryville, Calif., work space, Huber started
tinkering with 3-D printers and various
different plastics including ABS and PLA.
One of the materials was promising, but
wasn’t quite strong enough until he found
90 • ODT odtmag.com July/August 2015
the perfect blend of traditional techniques
to form a plastic covered with carbon fiber.
“The process has this interesting blend
of human and machine labor,” he told
TechCrunch in February. “What’s interest-
ing is how the machines help us print the
legs. But the machines couldn’t design this
on their own.”
All of Standard Cyborg’s prosthetics
are custom-made; the final  lamination
process takes two hours and is done by
hand. Even with the more labor-intensive
portion, Huber’s techniques allow him to
sell these prosthetics at just $799 a piece.
The company is backed by the seed fund
Y Combinator. Huber remains the founder
and currently is the sole employee.
Intellirod Spine (formerly Ortho-
Data Inc.), which received its first round
of funding in 2008, was founded by spine
surgeon Rolando M. Puno, M.D., and pro-
fessors from the University of Louisville in
Kentucky. The company is developing a
wireless implantable microelectronic spi-
nal rod strain sensor meant to allow spine
surgeons to objectively assess the strain on
implanted spinal fusion rods postopera-
tively. After years of work and funding, the
company received $1.9 million last year to
accelerate commercialization of the sen-
sor and related lumbar fusion implants.
The company has now submitted a 510(k)
clearance application to the U.S. Food
and Drug Administration for the Loadpro
intra-operative sensor for use in achiev-
ing rod strain balance during surgery. The
system gives the surgeon new informa-
tion for improving surgical technique and
avoiding post-operative adverse hardware
related events. The company currently is
establishing alpha clinical sites for Load-
pro in Louisville, Ky.; and in Cincinnati,
Columbus and Cleveland, Ohio. Not only
does the technology promise to help sur-
geons do their job better; it also holds the
promise of reducing costs associated with
postoperative complications.
Inventor Jeff Huber’s walking leg prosthesis (left)
and Standard Cyborg’s Water Leg prosthesis
(right). Image courtesy of Standard Cyborg.
Inspired by his daughter who runs
a dance studio, serial Rochester, N.Y.,
entrepreneur Jack Schickler started
Balance Engineering in 2009 to cre-
ate software that can measure human
balance. Six years later, the company is
now starting a funding round to expand
sales of a product that can diagnose
and treat people with concussions and
other balance issues.
The tool, Equilibrate, has been in de-
velopment since the company’s found-
ing, and has been used to treat pro-
fessional football players, orthopedic
surgery patients and college athletes.
The software tool combines real time
objective upper and lower body mea-
sures with the judgment and experience
of a clinical professional to improve
patient outcomes. A patient  stands on
adjustable, static force plates while
wearing a lightweight vest with imag-
ing targets placed at specific anatomi-
cal landmarks. Receiving input from
the force plates and cameras, Equili-
brate senses minute shifts in central
body force, positions, directions and
frequencies of motion from individual
areas of the body and provides quanti-
tative scores of dynamic alignment and
sway, as well as the integration of com-
bined effects across the whole body in
an overall score for total balance. v