Tenon Medical Completes IPO Following FDA Approval of Its Proprietary Sacroiliac Joint Fusion Implant System

On April 27, 2022, medical device company Tenon Medical, Inc. (NASDAQ: "TNON") announced the completion of its $16 million initial public offering.This IPO issued a total of 3,200,000 shares at a public offering price of $5.00 per share. The company plans to use the proceeds primarily for product sales and marketing activities.

Tenon Medical was founded in 2012 and completed two rounds of financing before the IPO, raising a total of 12.5 million US dollars. The information about the investors has not been disclosed.

ByTenon Medical DevelopmentSurgical Implant SystemCan optimize the process and outcomes of sacroiliac joint (SI-Joint) fixation and fusion surgery.. The system has currently obtained approval in the United StatesFDAApproved, and is planning to launch the system nationwide in the United States to address the current lack of medical services in this field.

Richard Ferrari is the founder, director, and executive chairman of the company., graduated from Ashland University with a bachelor's degree, and later obtained an MBA degree from the University of South Florida. He is a recipient of the Marinkrod Award for Medical Excellence, a faculty member of the Stanford Biodesign Emerging Entrepreneurs Forum, and a board member of the Stanford Coulter Translational Medical Foundation. Mr. Ferrari has always been active in the founding and venture capital investment of medical technology enterprises.Served as the Executive Chairman of the Board for six healthcare companies and was a member of the Board of Directors for 15 healthcare companies throughout his career.. He has raised over 1 billion dollars for these companies and, as a key member of the M&A team, facilitated acquisition projects exceeding 2 billion dollars. With his achievements in strategy implementation and organization building, Mr. Ferrari has gained considerable prestige in the industry. His "Excellence by Choice" lecture series has benefited many.

Another founder,Richard Ginn, serving as the company's Chief Technology Officer and Director. At the same time, Ginn is also the CEO and director of two other medical device companies, mainly responsible for intellectual property management and corporate fundraising. Mr. Ginn focuses primarily on intellectual property and product development. He has trained doctors worldwide in related fields and participated multiple times in the first-in-human (FIH) trials of innovative drugs. Throughout his career,A total of more than 300 medical device invention patents have been realized., helping to raise over 100 million US dollars in venture capital and bringing investors an average return of ten times.

The Two Founders of Tenon Medical

In addition to these two founders, the other board members of Tenon Medical are also experienced practitioners in the fields of medical devices, clinical diagnostics, commercial sales, and financial management. The Tenon Medical built by such a team isThe First Company to Develop and Manufacture Post-Sacroiliac Joint Surgery Implant Systems。

Sacral iliac (SI) joint pain is the joint's own pain caused by dysfunction of the joint, mainly due to trauma, childbirth, degeneration, arthritis, or other conditions..For suspected sacroiliac joint pain, doctors usually takeMedication, physical therapy, intra-articular steroid injections, or radiofrequency ablation, Four Non-Surgical Therapies Help Patients Relieve Pain. When All Conservative Treatment Options Have BeenWhen pain relief and quality of life restoration are not sustained, the doctor will consider diagnosing whether the patient is able toPerform Sacroiliac Joint Surgery, which is currently the best treatment method that can effectively reduce pain.

The first sacroiliac joint fixation and fusion surgery took place in 1908. Due to its large surgical wound and high invasiveness, it was only applicable to cases involving major trauma, tumors, etc., at that time. Over the past 15 years, less invasive surgical options and implant designs have begun to emerge. These surgical methods are flexible in implementation, and implant designs are diverse, gaining varying degrees of adoption in clinical practice. However, the diversity of solutions and implants has also led to the current surgeries having:Lack of product standards, varied diagnostic methods, complex surgical plans, high postoperative recurrence rates,层出不穷的并发症, and inability to confirm fusion through imaging, which makes this technologyLower adoption rate。

In the past few years, many companies have gradually realized this market opportunity and started to develop implants for minimally invasive sacroiliac joint surgery. Currently, related products on the market are usually...Screw or triangular wedge based, orAllogeneic Transplant Products, andCATAMARAN developed by Tenon Medical^TMThe SIJ system is different from all of these and demonstrates its uniqueness in multiple aspects.。

CATAMARAN^TM Comparison of SIJ with Other Clinical Programs

CATAMARAN^TM SIJ Fusion SystemProvides a new surgical solution,Place a single titanium implant directly into the sacroiliac joint through posterior sacroiliac joint fusion (PiSIF).^TM) Bridging the sacrum and iliumThe implant is 26mm wide, including two "floating bridges" with a diameter of 10mm each, one located at the sacral end (40mm long) and the other at the iliac end (30mm long).The combination of two "floating bridges" can span the entire joint., preventing joint shear or rotation. A chamfer is designed at the front end of the pontoon for easy insertion after drilling. Meanwhile, the device also features a "windowed" design,Fill the patient's autologous bone into the "floating bridge" to promote fusion of the entire joint.。

CATAMARAN^TM Analysis of the Structure and Function of SIJ

This surgery is usually performed inGeneral Anesthesiain the case of , needSurgical procedure using the implant inserter designed by Tenon Medical. ThroughSimulated Sacroiliac Joint InjectionThe standards, entry points, trajectories, and angles of treatment make the surgical pathwayAvoiding critical nerves and blood vessels. After the surgery is completed, it is possible toConfirm the short-term stability and long-term fusion of the implant through X-rays or MRI technology.。

CATAMARAN^TM SIJ implants are fixed in the SI joint through posterior sacroiliac joint fusion.

An independent biomechanical study(Lisa Ferrara, Ph.D. OrthoKinetic Technologies, LLC) shows that a single CATAMARANTMSIJ fixation device inSuperior to other products currently on the market in terms of fixation strength, shear stiffness, dynamic endurance, and tensile strength.. Current clinical cases (Michael Joseph Chaparro, MD, F.A.A.N.S., F.A.C.S.) Also confirmed CATAMARAN^TM The SIJ system indeed canPromote the fusion of the sacroiliac joint, while other competing products cannot achieve the same effect. The reason is that screws or triangular wedge products cannot effectively resist vertical shear forces and intra-articular torsion.

CATAMARAN^TM SIJ Fusion System Receives FDA 510(K) Clearance in June 2018, which can be used for sacroiliac joint fusion, sacroiliac joint fractures, and degenerative sacroiliac joint arthritis, among other conditions. Currently, the company'sThree U.S. utility model patents have been granted, and five are pending., with 3 additional patents in Australia, Canada, and Israel, and a total of 3 new patent applications submitted in the EU, Brazil, and Japan.

Tenon Medical believes that this product series will make significant contributions to the treatment of sacroiliac joint pain and receive high praise in clinical use by doctors.

In view of the different laws and regulations for medical device products in different regions, Tenon Medical has not considered producing any products or components itself, butManufacture and supply all instruments, implants, and sterilization trays through five contract manufacturers.The company currently does not have a production agreement with any contract manufacturer, and all orders are controlled through purchase orders.

The same idea is maintained in product sales.Tenon Medical Approves SpineSource^®For CATAMARAN^TM Exclusive Distributor of SIJ, and sell the system to clinicians engaged in spinal and pelvic surgeries, providing corresponding technical training for doctors. SpineSource^®With over 30 years of experience in the distribution of spinal and orthopedic medical products, currently employed750 professional sales representatives, with a sharing network spread across every state in the U.S. Tenon Medical has arranged for limited sales only in the fourth quarter of 2021,Began full-scale commercial sales of the product in the first quarter of 2022.。

Through the prospectus, it can be learned that the company has been in a loss since its establishment in 2012. As of December 31, 2021, the company's accumulated deficit was approximately 20.6 million US dollars. Over the past 10 years,Tenon Medical primarily funds its operations through private equity securities, debt-related financing arrangements, and product sales, with the majority of these funds being allocated to research and development, regulatory affairs, and product marketing.In preparation for the IPO and the full commercial sales of its products, the company significantly increased its investment in product development and marketing in 2021, with corresponding expenditures reaching 7.8 times and 73.1 times that of the previous year, respectively. Meanwhile, the gross profit margin increased from 58.33% in 2020 to 65.72% in 2021, mainly due to the revision of the U.S. distribution agreement from May to December 2021, which boosted revenue at each stage.

Partial Operating Data Consolidated Report (Data Source: Tenon Medical Prospectus)

According to Tenon Medical's current market research, more than 30 million American adults suffer from chronic lower back pain, and 15-30% of chronic lower back pain is related to the sacroiliac joint. However, complex surgical options and suboptimal implant designs have resulted in a penetration rate of only 5-7% for surgical solutions. Based on the company’s market research, the potential market for sacroiliac joint surgery in the United States alone is approximately 279,000 cases annually, with a potential market value exceeding $2.2 billion.

Based on FDA approval and clinically validated safety and efficacy, Tenon Medical is highly confident about its next phase of development. The IPO will enhance the company's and its products' visibility in the market, and this opportunity allows the company...Will continue to increase investment in sales and marketing.According to the prospectus, for the estimated net proceeds of $13,572,500, the company will have31.8% was allocated to support marketing initiatives, while 13.7% continued to be directed towards product development., another25.4% is allocated to the company's talent expansion and training.。

Tenon Medical's Plan for the Use of IPO Proceeds

According to the statistics of "China Medical Device Blue Book (2019)", among the top 20 market share holders in China's orthopedic implant market in 2018, six were imports. The top five ranked companies were all import enterprises, collectively occupying 37.93% of the market with an absolute advantage. Among these 20 companies, 11 produce high-value joint implants, with seven being domestically produced.It can be seen that Chinese-produced joint material enterprises have a certain level of product strength and development potential.。

For sacroiliac joint surgery,In China, the sacroiliac screw implantation method is currently widely used.Although surgical robots can guide doctors to more accurately locate the entry and exit points for surgery, the higher costs compared to traditional surgery make this technology difficult to promote among patients. Conventional surgical methods that do not use surgical robots typically involve using a guide pin to "probe" before screw implantation, but doctors relying on 2D surgical images to determine the implant path are prone to visual errors.Causing the screw to not be precisely implanted into the joint, leading to surgical failure.When no higher-quality implants are available, academic research begins to shift towards developing surgical techniques., but similar research requires a large number of clinical surgeries to obtain data and information, with a long cycle and many variables,Cannot reach a feasible conclusion in a short period of time.。

CATAMARAN^TM The emergence of the SIJ system canDirectly circumvent challenges that require surgical skills to address, which willMore Clinicians Master This Surgical ProcedureThe opportunity allows patients to hopefully get rid of sacroiliac joint pain completely. The emergence of new structural implant materials provides a new approach to solving problems like the high difficulty of sacroiliac joint surgery.From Developing Surgical Techniques to Developing Orthopedic ConsumablesIn China, companies with industrial pipelines in joint-related consumables can consider expanding into relevant markets.