Introduction
Ossis is New Zealand’s only orthopaedic implant design company. Ossis focuses exclusively on the design and marketing of world class patient-specific orthopaedic implants, primarily for use in the treatment of complex degenerative defects of the pelvis and spine and sarcoma (cancer) of the pelvis.
The global orthopaedic implant market is valued at over US$47b and is projected to grow to US$75b by 20231.
Growth in global implant demand is being driven by baby boomers reaching the age where their own joints are failing them, increasing rates of obesity in the western world, younger people wanting to stay active and growth in the Asian middle class leading to increased healthcare spending. During this time of rising demand, the implant market is changing rapidly in the face of technological innovation. The declining cost of manufacturing using 3D printing technology and increasing availability of software to process and manipulate digital image data is creating opportunities to provide patients with previously uneconomic personalised treatments for complex anatomical defects. Treatments that are superior in their clinical performance compared to traditional treatment methods.
At Ossis, we use the latest digital image manipulation and design software and 3D printing in titanium to deliver life-changing treatments to patients, who may otherwise be permanently incapacitated. In comparison to commonly used “off the shelf” orthopaedic implants, our patient-specific implants provide surgeons with the ability to deliver more positive clinical outcomes for their patients.
We are a world-leader in 3D printed patient-specific orthopaedic implants. We have over 8 years of clinical data that showcases the clinical performance of our implants. Our ability to demonstrate, using this data set, that our implants fix the problem and do not fail, is fundamental to surgeon decision making when they are considering using an Ossis implant. This evidence, together with our intellectual property and experience, positions us to capture significant value as the patient-specific implant market develops.
We distribute our implants direct to surgeons in Australasia through a combination of pathways including our own engineering led specialists and direct sales resources, as well as third-party sales teams through our international partners, Corin Orthopaedic and LifeHealthcare, and several independent sales agents.
Our three-year strategic objective centres on becoming one of the most recognized patient-specific implant design companies in our target markets – the US and Australasia, and an attractive acquisition target. To achieve this, we aim to maintain a high performing, focused product range with strong brand recognition in our target markets. We will actively communicate the clinical efficacy of our products to targeted surgeon groups, through our distribution and clinical networks. Underpinning both our growth and our exit strategy is our focus on the scalability of our business model through continued development of our people-based processes and automation technologies, to further accelerate our competitive advantages.
We achieved revenue in FY18 of $1.2m and we are on track to exceed revenue of $1.5m in FY19. Our product gross margins are over 60% (before sales commissions). We are projecting to accelerate revenue growth to $6.1m by FY22, a cumulative annualized growth rate of 51%, between FY18 and FY22. This leads to a profitable bottom line from FY21 onward. Our revenue growth is driven through expanding our distribution networks in our target markets, to gain an increasing share of the developing global demand for patient-specific orthopaedic implants.
We are seeking to raise up to $1.35m to capitalise on this international growth opportunity. Funds raised will go toward key growth initiatives, including expanding our sales and marketing activities in international markets, gaining US regulatory approval for our AceOs pelvic implant and purchase of instruments sets required for surgeries.
Patient-specific implants are the way of the future. We believe patients should no longer have to put up with implants that weren’t designed to meet their specific needs. With the advancement of multiple technologies decreasing the cost to produce patient-specific implants, we can make a real difference in the quality of life for an increasing number of patients worldwide.
We invite investors to join us on this journey.
1 Orthopedic Implants Market – Global Opportunity Analysis and Industry Forecast, 2017 – 2023. Allied Market Research, April 2017.
Investment Highlights
- We have successfully implanted over 200 patient-specific pelvic and sarcoma implants in Australasia, with no design or manufacturing related implant revisions to date.
- Global sales reach through a recent partnership with rapidly growing UK orthopaedic firm, Corin Orthopaedic.
- An engineer centric customer relationship model – an approach that resonates with surgeons and allows us to build strong industry relationships.
- Strong projected revenue growth from $1.2m in FY18A to $6.1m in FY22P, an annualized growth rate of 51%.
- Global market opportunities within the US$7.0b hip segment2.
- Strong board and management team with significant industry and management experience.
2 European Orthopaedic Market. Avicenne Consulting, May 2017.
The Team
In addition to their extensive management and governance experience, our management team and directors have significant experience in the international orthopaedic devices market.
Paul MorrisonCTO
Paul brings 25 years of experience in the design and manufacture of orthopaedic devices. Paul co-founded Enztec, another Christchurch-based orthopaedic device company in 1992, which he sold to a US orthopaedic company in 2010. Up until very recently Paul was Ossis’ Managing Director. In his new role Paul will oversee our design and product development functions, continued development of clinical relationships, surgeon and distributor training and executing our scalability strategy. Paul is a director of both Ti Holdings Limited and Ossis.
Mark EliottFinance
Mark is a chartered accountant, with extensive experience leading the finance function in a variety of organisations. This experience includes broad based senior roles, where he has had to perform at an executive level on the one hand, but equally, be “hands-on” when the situation demands it. Mark has a sharp eye for detail and believes strongly in continuous improvement.
Charlie CrispSales
Having completed post-graduate study in bone grafting, Charlie became involved in the establishment of New Zealand-based medical distribution company, Ostralos. He then worked with digital theatre equipment, medical cameras and consumables within Gastroenterology, General, ENT and Orthopaedic surgery at Device Technologies in Australia. Following a Hydrogel start up and a senior sales position with Orthotech, Charlie joined Ossis. Over the past 5 years he has developed a passion for 3D printing and the way in which it can achieve outstanding patient outcomes.
Dave BodyChairman
Dave has over 12 years’ experience in the medical device industry and has been a director of both Ossis and Ti Holdings Limited since 2012. He holds a bachelor’s degree in civil engineering and a master’s degree in business administration. Dave is General Manager of Facteon Intelligent Technology Limited and has held several other senior management roles in a variety of internationally focused companies, from start-ups to mature companies and has served as a director on several company boards.
Matthew Payton
Matthew has more than 20 years’ experience in the medical device industry with Fisher & Paykel Healthcare. He has held a variety of research, product development and general management roles including 8 years as a member of the senior leadership team. He has also run his own technology consultancy with clients in the aviation, manufacturing and construction industries. He holds a master’s degree in physics and a post-graduate diploma in business administration from the University of Auckland and is a member of the New Zealand Institute of Directors. Matthew has been a director of both Ti Holdings Limited and Ossis since 2015.
John Calder
John recently retired from medicine after a distinguished career as a Tauranga-based orthopaedic surgeon in both the public and private sectors, culminating in Presidency of the New Zealand Orthopaedic Association. Over the last 35 years his experience has also extended to include a diverse portfolio of innovative business and charitable interests, and directorships. His board membership follows a long and prestigious career in both medicine and business and he brings the combination of both these aspects of his career to the board room table. John is a director of both Ti Holdings Limited and Ossis.
Kelvin HylandManaging Director
Kelvin has been a director of Ti Holdings Limited (Ossis’s parent company) and Ossis since 2015. Kelvin joins us from NZX listed EBOS, where he was General Manager of their Australasian medical device business for the past decade. Kelvin joined EBOS in 1994 to head up New Zealand orthopaedic sales, where he held positions responsible for product management and sales and marketing management. Kelvin went on to establish the Aged Care and Surgical business units before managing the Consumer and International business units. Kelvin brings deep sales, operational and leadership experience from a $2.7b listed company. In addition to overall management of Ossis, Kelvin’s specific responsibilities include development and management of our sales channels and managing relationships with our distributors, agents and partners.Warning statement
It's crucial for you to understand the characteristics and risks of this investment opportunity. New Zealand law normally requires people who offer financial products to provide in-depth information to investors before they invest. The usual rules do not apply to offers by companies through Snowball Effect. As a result, you may not be given all the information you need to make an informed decision. Investing is risky. Some of the key risks include loss of capital, illiquidity, lack of returns, dilution, loss of key people and customers, and lack of control. You should only invest money that you can afford to lose.