Carlsmed, Inc. Common Stock Bank of America SMID Cap Virtual Conference
Review the key takeaways and the transcript of this earnings call.
- Carlsmed Inc. is an AI-enabled medtech company focused on improving outcomes and reducing costs in spine surgery through personalized 3D surgical planning and 3D printed devices.
- The company reported a 74% reduction in re-operations for adult spinal deformity patients using their technology compared to traditional spine fusion.
- Carlsmed addresses a market opportunity of over $10 billion in the US, covering approximately 400,000 lumbar and cervical spine fusion procedures annually.
- The surgeon base grew 60% year over year, with rapid adoption among early and mid-career surgeons, especially at teaching institutions.
- Since its IPO a little over a year ago, Carlsmed has reduced order-to-delivery time from eight weeks to about one week, launched its cervical spine platform, and received permanent MS-DRG reimbursement for lumbar procedures.
- The cervical platform launch in December exceeded expectations and is expected to contribute low double-digit revenue percentage in the full year, with a new personalized fixation plate product (Cora) launching in Q4 2024.
- The company reported Q2 gross margins of 77%, consistent with Q1, and average revenue per procedure of $31,000 for lumbar and $18,000 for cervical.
- Carlsmed ended Q2 2024 with nearly $90 million in cash and a monthly cash burn under $3 million.
- The company is building production capacity to support a tenfold revenue increase and continues to invest in automation and digital workflow enhancements.
- Management highlighted a closed-loop ecosystem including 3D patient modeling, surgical planning, personalized device manufacturing, and post-op data collection as a key competitive advantage.
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Transcript
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Hi, everyone. Thanks for joining. Just wanted to come on to say welcome. Thanks for joining one of the sessions of day 2 of our Small and Mid-Cap virtual event. Great opportunity to hear from corporates across the small and mid-cap space where our analysts have really great breadth of coverage, about 1,000 small and mid-caps that they cover in the U.S. Feel free to reach out if you need the schedule for the rest of the day, any additional sessions you want to join. But wanted to pass it over to Travis.
Thank you. Hi, everybody. Travis D, the MedTech analyst here at Bank of America.
We welcome Carlsmed up next. We've got the full team, Mike, Leo, and Stephanie recently joined as investor relations. Maybe I'll turn it over to you, Mike, and maybe start with an introduction, the business, for those unfamiliar with the story here.
Thanks, Travis, and thanks Jill for having us today. Really thrilled to be here. Just a little bit about Carlsmed. We are an AI-enabled MedTech company and really founded on a mission to improve outcomes, decrease the cost of healthcare for spine surgery and beyond. We developed this Breakthrough Technology designation that allows us to take imaging from patients, data from surgeons, create a 3D virtual model of the patient's spinal pathology, the optimal 3D surgical plan for that patient, and then the perfect fit three-dimensional devices that are 3D printed that go into the disc space of the patient and create three-dimensional alignment. We received this Breakthrough Technology designation for lumbar spine fusion as well as cervical spine fusion. With our platform technology, we've been able to meaningfully improve outcomes in this patient population.
What's really unique about our business in the MedTech space is that we are digital first. We actually have no inventory, and so we're able to model the surgery digitally, build-on-demand the devices specifically for the surgery, and collect post-op data for every surgeon, every patient that continues to improve the platform.
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