Innovation, growth, solid ethics…those words capture the essence of Amendia’s recent purchase of Carlsbad, California-based Spinal Elements, Inc. A purchase, by the way, that makes the new company one of the ten largest in the spinal realm.
Not to mention an outrageous amount of combined experience in the spine arena—300 years!
Amendia, Inc., based in Marietta, Georgia, was founded in 2008 by three visionaries: one from the banking sector, another from manufacturing, and yet another from the sales and marketing world.
Chris Fair, chief executive officer (CEO) of Amendia commented to OTW, “They started out by growing the company regionally, focusing on the Southeastern U.S. They also grew via vertical integration and manufacturing, even producing their own spine system, something that was rare at the time. From that point on the company expanded with acquisitions. Then 12 months ago, Kohlberg and Company, L.L.C. acquired Amendia. At the time I was advising Kohlberg based on my experience in spine; we quickly added talent and invested in infrastructure.”
“Added talent” may be understating things. “We brought Larry Boyd, Ph.D., one of the first engineers at Danek, to work on interbody devices. Larry, is our executive vice president (EVP) of Research and Development, has roughly 75 patents to his name.”
Then there is Steven McAllister of Biomet and Howmedica fame. “Steve is our executive VP and chief financial officer (CFO); he brings a world of experience across accounting, finance, and strategic planning.”
As for Chris Fair, he knows a thing or two about spine. “My career, started at Danek Medical, DePuy Spine, and elsewhere, involves nearly 25 years of spine and orthopedic device experience. When Kohlberg wanted to invest in a small to mid-size company where they could impact the management of the company, I was thrilled to join in the effort.”
Now for the dynamic company they acquired. Originally known as Quantum Orthopedics, Inc., Spinal Elements, Inc. has been on the spine scene since 2003. Jason Blain, the company’s co-founder and first chief technology officer, is now president of the combined companies. Blain, who built his breadth of experience at Smith & Nephew plc, Alphatec, and NuVasive, Inc., told OTW, “Spinal Elements’ first product was an interbody device made of PEEK (polyetheretherketone). We sold it through our own distributors and through private labels—which is why we never had to raise professional money—only ‘Friends and Family’ funding. We added one product line at a time and grew organically…now we have 10 product lines.”
So strong, so why sell? Jason Blain: “In 2004 we did a Series A round of funding. We began looking for ways that these investors could obtain a return and then exit. In October 2016 we began discussions with Amendia, knowing that the company has stellar management. The people running it on a daily basis have an extraordinary depth of experience. We were also very comfortable with Kohlberg, their financial backer.”
“Both companies operate in similar ways, and are lead by a strong ethical compass. Executives at both entities are known for paying close attention to others’ intellectual property, for their level of respect for customers and distributors, and for the desire to put out top notch products and maintain a high level of innovation. It was a natural fit.”
Chris Fair notes, “For 12 months we have been actively exploring ways to grow Amendia, knowing that we had the resources of Kohlberg behind us. In all, we looked at over 20 companies in the spine sector. I have known Jason for many years and I know what he represents. I have always found Spinal Elements to be a very well-run company. They are thoughtful with clinicians, they build superior products, and they treat distributors and surgeons very well. In this industry there are companies who want to blur the lines between industry and the clinical realm. That is one reason why it is important to partner with an organization that shares the same ethical standards. The philosophical nature of their allograft program says it all. Joining forces with Spinal Elements helps to galvanize the culture we have been brewing here at Amendia.”
“Spinal Elements has the longest standing history of any coated technology in spine. And they are the only company with level one, peer reviewed data on Magnum+ Stand-Alone ALIF (anterior lumbar interbody fusion). They have completed over 10,000 implantations and they have a strong warranty program…they are way ahead of the curve. Also attractive was the fact that they have several emerging technologies that we didn’t have in amongst our offerings, namely, an interspinous process device and their Katana lateral system. The Katana system is so strong that it will leapfrog the competition…and their deformity system is next generation.”
Fair continues, “With this acquisition, we now have the widest variety of standalone interbody offerings on the market. When it comes to expandable cages, our company offers a titanium version as well as a PEEK cage with titanium coating. Not many companies can make that claim.”
“Going forward, minimally invasive surgery will be a key component of our growth. But the question is, ‘Do we have the right technology to get there?’ Whether you choose robotics or augmented reality, it must be user friendly and not overly expensive. Right now it is generation one. We will find a way to service that need because patients are demanding it. We will also further explore biologics and coated technologies, giving particular attention to the materials we utilize. Because we now have the strength of the combined entities, we can ensure that there is solid clinical data backing us up.”
Jason Blain envisions a future where Amendia’s experience with biologics will be fruitful. “The roll out of our lateral system will take time, but both companies are on the same page as far as our interest in expandable devices. I also see that Amendia has interesting efforts underway in the biologics arena. They have a nice portfolio of allografts and cellular allografts. Spinal Elements has not been particularly strong there in the past, so we look forward to working with Amendia’s experts.”
Asked to describe the personality of the new company, Chris Fair says, “We are the friendliest company toward independent distributors and surgeons. I carried the bag as a sales rep for years and I see how things have changed. The independent distributor network has been marginalized by larger organizations because they have veered towards a direct model. We believe there is tremendous value in distribution and we will continue to invite those partnerships.”
Jason Blain echoes his friend and colleague. “We are defining our personality as the go-to company for independent distributors. Our goals are to maintain a high level of sales growth and put out innovative products that are not just differentiated but differentiated for a reason. For example, while there are several competitors to our lateral system, we are taking a novel approach that should be especially attractive to surgeons. Again, we are following a logical path. This and other products will be differentiated for surgical efficiency, and for improving procedures for patients and surgeons…not to get around a patent.”
Next steps? Blain, who will have the same responsibilities on a larger scale, says, “Now it is time to integrate our people and products, and work with distributors to ensure that everyone is educated about what we are doing. We will also be creating and refining our strategy as a combined entity.”
Chris Fair adds, “Well, I will remain as CEO…and when is the last time you saw a CEO who had spent a lot of time in the operating room? Most CEOs don’t know the history of spine. I am proud to say that we have as much—if not more—spine experience than any of our competitors.”
And while the new company may be bigger, says Fair, it is agile. “We operate out of a 100,000 square foot facility where we make products onsite. We are nimble, but aggressive with commissions and costing…and we can leverage that with the Spinal Elements products.”
“We look forward to growing with our surgeons, and to ensuring that our sales reps have every inch of education they need. And they will most certainly get it, given that the new company is being led by spine-knowledgeable people in every sector.”
Jason Blain sums up all the activity of the past few months saying, “This opportunity and merger is about growth and innovation—not cost savings. We are excited to have all of the resources necessary to grow and accelerate the development of both companies.”
