Charanpreet Bagga, best known as “CB,” is the CEO of Prosidyan, Inc. a 13 year old company based in New Providence, New Jersey, but, now, an important part of DePuy Synthes, JNJ’s orthopedic business which represents nearly one-third of JNJ’s overall medical device business.
Bagga, engineer, innovator and the visionary behind Prosidyan, did something very unusual in the annals of JNJ’s M&A program. He, apparently, unlocked the code for integrating a small, technology based company into the behemoth Big JNJ—something rare and very interesting.
But, we’re getting ahead of our story. Charanpreet Bagga has been an integral part of orthopedics for more than 30 years—starting with Howmedica, then Spinetech, OrthoVita, Orthofix, and, of course, Prosidyan.
Additionally, he told OTW, “I also helped start a company called Titan Spine. You may have known about Titan Spine, the company got sold to Medtronic a couple of years ago so I’m the co-inventor/co-founder of Titan Spine.”
Bagga continued, “There’s another technology called Knee Creations. You know, like subchondroplasty and I am the co-inventor of Knee Creations with the Rothman Group.”
What Is Prosidyan, Why Was JNJ Interested?
Prosidyan is a company that “develops proprietary fiber-based bioactive glass products.” The idea for the company came in 2008 when Bagga left his previous job. Hyun Bae, M.D., a leading surgeon and the current chief medical officer of Prosidyan, and Bagga had known each other for “many, many years.” When Bagga left his job, Dr. Bae and Bagga decided to develop a bone graft. Initially, when the two did an organic search, they found that they “did not like anything that was available at that time.”
However, that would change when the two came across bioactive glass. According to Bagga, the company’s initial interest in BioGlass was simply that its founders “liked bioactive glass.” Bagga told OTW, “Bioactive glass when you implant in the body, upregulates seven families of genes linked to bone formation, and it recruits bone forming cells to the site. But the process is more physiologic—it does this as the body heals naturally.”
Bagga and his team took this existing technology and came up with a new form. According to Bagga, “What Prosidyan did is we developed nano and micro-sized bioactive glass fibers and with those we created a portfolio of products. Thirteen years later we were able to demonstrate, by selling over 80,000 units, that this product was safe. It was effective. We did a lot of data collection, full spectrum, as well as retrospective data collection and it showed that the product worked amazingly well in a variety of clinical situations.”
A Company With Three Lives
Bagga is both enthusiastic and modest when he discusses the success of Prosidyan. During the interview, Bagga explained how he viewed the lifecycle of Prosidyan, telling OTW, “I would say Prosidyan had three different lives right? So, 13 years divided into three segments. First five years is what it took to get our first FDA clearance.” Prosidyan received its first FDA clearance for FIBERGRAFT® BG MORSELS in 2014.
Bagga continued, “In the next four years we worked with independent distributors to gather initial commercial experience. And honestly, four years ago when we signed our agency agreement with J&J I thought my work was done. But in reality, it was just getting started. Because now we signed with a big spine company but then we had to really learn and win the mindshare of all their sales force.”
Perhaps what set Prosidyan apart, in addition to its technology, was how it ran its operation during all of its lives. Prosidyan, according to Bagga, ran a “cash flow positive operation” and it did so with “a lot of hard work” and by being “very fiscally responsive.”
Bagga elaborated to OTW, “So we had about, you know, like less than 50 employees. We manufactured our own product. We had our own clean room; we did all the stuff. Our gross profit margins were very high. We did not depend upon third party OEM for manufacturing.”
A Recipe for Successful Integration Into Johnson and Johnson
Prosidyan’s creativity with bioactive glass combined with the company’s dedication to hard work and being fiscally responsive has been a recipe for success.
According to Bagga, with less than a $5 million fund raise, Prosidyan built a novel idea, teamed up with a manufacturer to develop it, got initial commercial and clinical experience via an independent sales force, and signed a distribution deal with Johnson & Johnson.
May 2018 is when Prosidyan entered into an exclusive partnership with DePuy Synthes to promote its FIBERGRAFT® family of products. Four short years later after working with Prosidyan, DePuy Synthes acquired the company.
Step One: Earn the Sales Force’s Mind Share
Bagga told OTW, “Once we signed a deal with DePuy Synthes, it became very clear that an average sales consultant has several products in their bag, and we need to earn their mind share. We were a small company with limited resources. However, we had a clarity of vision and a purpose. Every employee in the company believed that we have the best bone graft in the market, and we add value to the patients in the OR.”
Step Two: Culture of Pride, Proactivity and Putting the Customer First
Bagga continued, “Collectively we were able to build a culture of pride in the quality of our work while keeping patient care in the front of our mind. The definition of quality for us included staying proactive, always thinking of our customer first. Our internal team provided strong customer service and made sure there is always product available to ship, never had supply issues. Our sales team became integral with the DePuy Synthes sales force and contracting group and acted as a catalyst in getting our product available in hospitals across the countries. In four years, we became one of the fastest growing products in the DePuy Synthes bag.”
OTW gathered additional insight from Prosidyan Vice President of U.S. Sales Mike Sell and asked him what, in his view, was the biggest lesson learned from growing Prosidyan, then selling to DePuy Synthes. “My biggest learning was the power of inclusion and diversity on a team,” he said, “Prosidyan was a very healthy environment of trust with clear direction and mission. We all knew where we were going and were not threatened by making mistakes along the way.”
“Challenging questions were a common occurrence coupled with a single mindedness to succeed. CB was masterful at leading this culture and assuring the right people were welcomed onto the bus. The four years I spent at Prosidyan was a doctorate education in small business entrepreneurship.”
According to one member of the founding team, the most important ingredient to Prosidyan’s success is Bagga. Dr. Bae told OTW, “In all my years in spine, I have never met a more honest, thoughtful and relentless leader. It was ultimately his leadership that led to incredible retention of value for our investors and successful exit.”
OTW also asked Sell what he was most proud of from this experience. Sell said, “I was most satisfied by knowing that every day, everyone was making a significant contribution to the goals set before us. The motivation behind this wasn’t self-serving. It was more of a desire to see the success of those around you. This ultimately resulted in some of the best commercial sales growth results that I have been a part of throughout my 20 year sales career.”
How Did DePuy Synthes React to CB’s Process?
OTW spoke with Christoph Eigenmann, who is vice president sales and marketing at DePuy Synthes Spine USA, about the acquisition of Prosidyan. He told OTW, “At DePuy Synthes, we’re committed to exploring and advancing innovation through both internal and external opportunities to better meet surgeon and patient needs. It is in this spirit that we acquired Prosidyan, Inc., in May 2022 after working with the company since 2018 promoting their osteoconductive, resorbable, biocompatible bone graft substitute in surgical procedures in the U.S.”
“Over the years and through the acquisition journey, one of the best discoveries was coming to know Prosidyan not just as the medtech innovator that designs industry-leading biomaterials for orthopedic and neurosurgical procedures, but as a truly great partner who shares the same core values and commitment to improving patient lives.”
“Together as DePuy Synthes—the Orthopaedics Company of Johnson & Johnson MedTech—we are collectively excited about the positive impact Prosidyan’s advanced biomaterials could now have on even more patients, particularly in the areas of spine fusion, and in trauma surgeries of the pelvis and extremities in the U.S.”
OTW also asked Eigenmann what sets Prosidyan apart from its competitors, Eigenmann explained, “Prosidyan’s FIBERGRAFT products are next generation synthetic bioactive bone graft substitutes used to assist in the healing of surgically created osseous defects and osseous defects created from traumatic injury to the bone.”
“FIBERGRAFT products are clinically proven and manufactured with proprietary bioactive glass fibers that recruit bone-forming cells, attach these cells to a scaffold and connect them for cell proliferation—all of which enables robust bone formation.[1][2]”
“Backed by the power of DePuy Synthes, Prosidyan’s industry-leading technology now has the scale to reach more patients and offer surgeons one of the most comprehensive orthopaedics portfolios in the world. Through the acquisition of Prosidyan, we have been able to further supplement our comprehensive biomaterials offering and can now address an even wider range of procedural needs in Spine, and in Trauma in the U.S., to advance the quality of patient care.”
It’s a Marathon, Not a Sprint
Prosidyan is a success story. While many orthopedic companies want to accomplish all that Prosidyan accomplished during its three lives, very few companies can or do. Perhaps what is most surprising from speaking with Bagga is what he learned from the journey. When Prosidyan signed its initial agreement with DePuy Synthes, the work was just beginning. During the four years that the companies worked together, Prosidyan learned what it would take to work with a big company and the big company got to test drive the little guy.
It all paid off in the end. As Bagga told OTW, “We found the sweet spot and we got it done.”
[1] Prosidyan Data on File, DHF0002, DHF0003, DHF0006
[2] “Novel Bioactive Glass Micro Fiber – Collagen Matrix Facilitates Posterolateral Spine Fusion.” WR. Walsh, PhD, Hyun Bae, MD. Innovative Technology Presentations, North American Spine Society 32nd Annual Meeting, Orlando, FL, October 25-28, 2017.
