Shoulder Innovations, Inc. Morgan Stanley 24th Annual Global Healthcare Conference

All right. Good afternoon, everyone. Thanks for joining us today. I'm Eduardo Hurdon. I'm part of the Morgan Stanley team. Today, I have the pleasure of being joined by Rob Ball and Jeff Points, CEO and CFO of Shoulder Innovations. Before we begin, just a very quick plug for disclaimers. Please visit morganstanley.com/researchdisclosures. With that, we can start with the fun part. Thank you guys for being with us today.

Thanks for having us. Thank you.

Yeah, of course. The opportunity.

We are about a year out from the IPO, so I want to start with just some of the exciting updates that you have announced since then. Maybe we can start with your new partnership with ALM Ortho. Maybe give us a little bit of a flavor of what sort of things that brings to your portfolio and how meaningful is it going to be for you?

Yeah, sure. As you can imagine, orthopedic surgeons face a spectrum of difficulty as they replace a joint. Of course, these are patients that have disease, and so they are treating disease. As you get further and further into the complexity spectrum, our current products become less and less the optimal products. As we lean into that portion of the market, we find in some patients that the best solution is a solution perhaps provided by other parties. The ALM relationship allows us the opportunity to lean further into those more complicated opportunities sooner, quite frankly, and offer, I think a great word is bespoke solutions for those very complicated, kind of dysplastic or revision circumstances.

Great, and when would you say you are going to start benefiting commercially from the partnership?

It is a process that is ongoing right now. ALM Ortho has already deployed their process in a number of patients over the past 24 months or so. We are essentially taking over the exclusive relationship there. We believe we will treat some patients even yet here in 2026, but be more meaningful for us in 2027.

Okay, great. I think you also announced the clearance and launch of the N-22 Humeral Head for anatomic.

Yep. I think you had the glenosphere for reverse procedures that you launched earlier this year.

Can you give us a sense of what that market opens up and what the opportunity is there?

Yeah, sure. It is a very similar dynamic to the alternative bearing material, the N-22, for the glenospheres. Effectively, there is 10%-15% of the population that may suffer from some sort of hypersensitivity to an alley or an allergy, if you will. We essentially propose this alternative material for those patients. The N-22 heads that were available earlier this year for the reverse indeed accommodate that circumstance. We have seen a nice uptake of that device in certain patient populations, so we know that those are incremental patients that our surgeons would not have treated without that device. We have the same dynamic in the anatomic shoulder arthroplasty side now with the clearance of the N-22 Humeral Head.

Great. I guess beyond the N-22 products, you also highlighted several additional new product launches in Q2. Can you maybe give us a flavor of what each one of those products is and whether you think about them more in terms of increasing utilization within your existing user base, or is it really broadening out the new surgeons that you might be bringing into the funnel?

Yeah, sure. You will make me go by memory here, but one that is a little more eminent is what we call InSet Go. Most people are aware of our InSet Glenoid, which has been commercially available for about 10 years now. InSet Go will be our second generation version of that InSet anatomic glenoid, and it does a couple things. One is it preserves some of the key elements relative to our intellectual property around the complexity of the articular surface and the availability of what we call InSet Plus or augmentation devices in that very simple procedure. But it eliminates or reduces a step in the operating room that perhaps saves as much as 8 to 10 minutes in the operating room. We do this by incorporating additional features.

That product is kind of in the very final stages of manufacturing and will be available here relatively soon, over the next weeks, and we are excited to see that come to fruition. We see this mostly as expansive relative to surgeons that may have had some inhibition about that step in the operating room that we cause them to take, so this we think can be expansive relative to our existing share in the marketplace. Another device that is relatively near term is the InSet Clutch. That is the device that allows a surgeon to take preoperative planning information and use that information in a reusable guide that allows them to seek to duplicate that information in the operating room relative to the placement of the glenoid device.