Ready? Let's find our seats, and we'll get this thing kicked off. So officially, Good morning, everybody. Thank you for making time out of your day to join us here. My name's Todd Koning. I'm the CFO at ATEC, and I just wanted to welcome you to our innovation update this morning. It's very likely we make a couple forward-looking statements throughout the morning, so if you wanna look at that, it's on our website. Our agenda today, I'll give a brief contextualization to the earnings or the revenue pre-announcement we made on Monday. Pat will give a bit of the state of the union update. The bulk of the morning is spent with this panel of surgeons.
So first, thank you guys for making time out of your schedules, out of your day to come and join us. We thought it was really important, that you heard from the people who are around the technology and around the company, understand where we're bringing that technology, and the people who are serving patients and doing surgery, and how that all intersects, and ultimately, how the technology will help them do better surgery. And who better to hear that from this group here? So again, thank you guys for joining us and making time. Then Pat will close us out. On Monday, we pre-announced revenue of $117.7-$118.5 million.
Keep in mind, that's on one less selling day, so we had about 63 selling days versus 64 typically, compared to the Q2, as well as compared to the previous year, Q3. Sequentially, we were up about $1 million. Year-over-year, we were up 30%, 31%-32%. On the surgical revenue, I think it's of note because surgical revenue growth in Q3 of 2022 was 50%, so we grew 30+% on a 50% comp with one less selling day. I think strong performance. And so, you know, as you kinda look at that, we're really pleased with it because the demographics of that revenue really reflect the investment thesis of the company. So, again, lateral revenue drove the growth in the quarter.
We saw strong surgeon adoption and, and volume growth of mid-20s, implying mid-single-digit revenue per procedure growth, so again, very similar to the experience that we've had throughout the year. Then surgeon adoption was up mid-20s as well, and so we continue to have a lot of people come through the facility, learn what we're doing, and, and adopt the, the procedural approach. So we're really pleased with, with the results, the strength of the results, and the strength of the results gave us confidence to raise our full-year guidance by $10 million to $472 million, growing 32%.
And as you think about it, we came into the year at $438 million, kinda performed throughout the year, and you've seen us kinda raise the guidance as we continue to perform and just have the confidence that we can continue to raise the guidance on the year. So, really pleased with where we're at. With that, I'd like to introduce my friend, our Chairman, CEO, Pat Miles.
for the warm welcome. Yeah, it's fantastic. Thanks. Yeah, thank you guys for clapping. I'd be worried otherwise. It's somewhat cathartic and it's kinda too bad that you guys don't get to see some of these things. I've known this panel for a very long time, so to me, it's a blast to in essence start to apply the know-how, you know, at a different level. I was just teasing Dr. Foley, back in the mid-1990s, I was at Sofamor Danek, and he was the surgeon designer around a project, and I wanted to make sure that he put in what a great product manager I was back in the 1990s, and how much it reflects today.
So, in all sincerity, it is, you know, Todd's commentary is so right with regard to the business is what these guys do, and I think that what happens so often is people misunderstand what the business is, and the business is a reflection of how they serve patients and how we serve them. And so what we wanna do is set the standard on that, and so when we talk about the standard bearer, our opportunity to continue to make new solutions and set a new standard, I think, is totally reflective. The beauty becomes is we don't have to do it outside the context of a spine company, is all we do is spine. I gotta tell you, I...
You know, if we did total joints or trauma or, you know, some other type of market space, it inserts a level of complexity that would be very, very challenging, and I think just the advantage of being a spine-only company is, I think, underappreciated. When you start to think about what our mission is, it's really to revolutionize the approach to spine surgery. Spine surgery is still not that good, and so doing it under the auspices of 100% spine, I think, is valuable. We love to say that the innovation comes from the operating room and not the boardroom. Again, I think that what drives decision-making for us is requirements, and these guys oftentimes say, "Hey, here's the requirements of the field that I'm serving.
This is the pathology, this is the patient position, this is the technological challenges or the anatomic challenges I have. How do we address those?" And so when you're a requirements-driven organization directly at a specific field, again, I think it creates expedience, and so when you look at our growth rate, it's very clear. I would tell you, a lot of companies too, you know, are, you know, the spine group is a division of a division of a division, and they don't have the opportunity to provide the level of focus that's required to ultimately make the innovation that's gonna reflect in value. I always love when people say, "Ah, this is a tired business.
This is commoditized." And I think their consumption is with the currency of the business, and much of the currency is undifferentiated. But when you start to look at a field where degenerative revision is in the 10%-15% range within one to three years, and adult deformity is in the 25%-30% range, to suggest you can't make that better, I think, is a fallacy, and that's why I love having these guys up here because you're seeing—you'll see such a disparity of different experiences across the panel. And so we think that much of creating predictability or improvement is variable mitigation. And so you mitigate variables in surgery with precision.
Brad Clayton's in the back, and I always love to talk about the know-how that we engage in the company. Brad and I were together in the 1990s at Sofamor Danek, and Brad did the original Stealth Station at Medtronic, and he and Dr. Foley, and he's been in navigation for, you know, God's 25 years or more. So the opportunity to have the foundational know-how of someone like Brad and someone like Dr. Foley working to integrate these things procedurally, I think is important. And that creates a level of predictability when you have that foundational know-how. And the interest is how do we make sure that we architect a solution that is comprehensive in nature, that you could apply to a pathology and create a level of predictability by mitigating variables? So the...
If you think about the goals of surgery, you'll hear this a bunch today, but it's the goals are decompression, stabilization, and alignment. And there's a lot under that that ultimately is that we can effectuate. And I think the thing that we've done a reasonably good job on is being able to assemble these things in a way that drives predictability in the hands of the masses. The business is not these guys, you know, they candidly, they're great surgeons. I've been in the operating room with them, and I've watched them. I've also been in the community of a lot of surgeons who are less good, and the volume of surgery oftentimes is there. And so for us to create solutions that are ultimately predictable in the hands of the masses is the business.
So that's the whole proceduralization. You'll start to hear us start talking about the navigation, and the robotic piece as Valence. And, Valence is a chemistry term that talks about, you know, the addition or the assembly of goods to improve something or make something better. And, so the interest is, we don't love navigation for sake of navigation. We don't love robotics for the sake of robotics. We love it as a tool to ultimately create predictability within the context of a procedure.
As we architect these things, and the reason we're probably slower than what one would expect with regard to the navigation and the robotics, is the fact that we want it integrated into the procedure so that there's a workflow that we could ultimately engage everybody else in, that will improve the experience of the procedure. Also, you'll see us launch expandables, and you'll see some of the surgeons talk about that. The great part about PTP or, when you're laying on your stomach and you release the spine from being fixed, is you can control the angulation, and so you love a expandable tool that ultimately enables you to apply a more precise angulation to the spine, and so you start to see some of those things.
I think the most fun part is the informatic element, and just the acquisition of EOS was one that I think caught people off guard and thought was a bit strange. But when you can start to understand a patient in a full-body weight-bearing image and be able to take that information, if alignment is one of the goals of surgery, and to understand the alignment prior to you getting into the operating room, we felt like that was profoundly important. And then the back end of that, understanding what I did in the operating room and then saying, "How do I improve it?" We felt like it was the foundation for a predictive environment that I think everybody intends. It's like, how do I create predictive analytics?
The thought was to create an informatics set that ultimately drove understanding across the board. So, our mantra and commitment is creating clinical distinction, compelling surgeon adoption, and the whole sales force thing, I think, is ripe for us. And I always say, you know, you know, "Let the games begin." We made an announcement on a couple of board members yesterday that we think will help our reach. We've hired 30+ competitive salespeople. We had a big one in New Jersey, New York. You know, it's unheard of when you have 15 of 15 reps join from a distributor group.
You're starting to see there's a lot going on, I think, on the top of the water. There's not, people don't see very much. I gotta tell you, there's a lot going on underneath the water that we're excited about. Our priorities, though, will be: Where is distribution that is focal in places that can make impact for us? We'll be very disciplined with regard to how we approach it. Trying to be the standard bearer in lateral surgery, I think with regard to PTP and LTP, you'll hear a lot about that today. I'll be fast out of here, but you'll see, I think, the standards being set there.
I think that if we can apply the same sophistication to deformity, and we have the foundational elements, I think EOS is going to play a great role there. And I think just the whole informatics element really will drive an opportunity for us to have a large effect over the years in spine care in general. And so I wanted to be quick and kind of just set the stage for really the people you want to hear from. But from an informatics perspective, I don't know of anybody who can really describe the goings-on better than Dr. Deviren. So welcome. Thanks.
Thank you.
Thanks again, please.
Good morning. Thank you for having me here. Just quick background, I did my initial training in Turkey, and then I did a fellowship at UCSF in 2001. I've been there for a little over 2 decades, and I trained to do lateral surgery in 2007. In our institution, we've been using EOS since 2008, and adopted PTP in 2019. My practice is mainly focused on deformities, reconstructive surgeries, a typical academic institution, and some also degenerative spinal pathologies. So what I learned, like initially, like, you know, in first part of my career, is that the main goal of the surgery was, like, decompressing the nerves and stabilizing the unstable segments. But what we learned in last decades, that the alignment is a critical part of the spine surgery.
It's really important to achieve a good outcome for the patient care. So the data and studies last decade shown that the alignment verification is unmet, and if it is unmet, you don't get the good outcome. And studies shown that the clinical outcome is very highly correlated and influenced by the radiographic alignment goals. And inadequate correction, actually, of the alignment goals, segmental or global, leads to poor outcome and repetitive surgeries in spine that we need to really focus on to how to prevent additional surgeries these patients are going through without achieving the first goals. So, one thing that actually I am realizing that the, we tend to differentiate, like, you know, degenerative spine versus the deformities. In my belief, there is no such a distinction.
All the patients in spine pathology somewhat have deformities in their alignment, either through segmental deformities or global deformities. So that's why it's really important to understand, even for a single-level disease, what the segmental alignment goals should be. Because the data shown that if you don't achieve even those short segments alignment goals, they're 10 times more likely those patients are gonna require additional surgeries in short term. And how we are gonna achieve these goals? You need high-quality images. That's the EOS, that you need EOS machines to obtain that high-quality images that you can make accurate measurements on the alignments. And then actually, you know, I think you guys heard from all the companies like, you know, planning, planning, planning. Then you need to do planning on these patients.
The differences between the ATEC and the other companies actually is the EOS machine. Without the quality images, it's really difficult to use the planning platform. That's why last 10 years, that there are so many planning platforms that have been unused properly because the tools are not easily accessible, reproducible, it doesn't work the clinician's workflow. And then you need to, like, you know, then we are gonna realize that the standard care is gonna be only available for the people that have an access to these quality images and EOS machines. And then eventually, when we collect the data with the modeling, the AI, then we are gonna learn more and how we can do better on these patients. Current imaging technologies actually have a lot of, you know, downfalls, that they are prone to errors.
Angles might be affecting the image qualities and the magnification errors. There are a lot of this lack of quality of the image that lead to misleading findings. So, like, such as, like, you know, you have to... If you're obtaining a long spine images with the regular X-rays, you have to stitch those images, and there are stitching errors, and then that leads to the measurement errors. Because of the technology, that the image quality is not as good as the EOS images. And because of that poor quality images and the existing, you know, softwares, that the planning platforms, like the Surgimap, the NuvaMap, the Stryker has another one, that it's actually failed to adapt into the patient, into the surgeon's practice, because you need to sit down to measure them.
You need to upload the images from your records to put into the software and to measure them, and you need to meet the person from the company to plan the surgeries. So it's such a long process of timing that you cannot fit into your workflow of your clinic. You need to see 30, 40 patients per clinic, and if you think about that, doing that for every single patients, it's impossible. That's why even though those softwares were available, it was not adapted because of the time consumption and also the labor that needed additionally, in addition to the surgeons and other hand, the companies to provide a technician. With the EOS images, the quality of images, like you obtain a full body images, standing weight-bearing images, there is no stitching errors, no magnification errors.
There is significantly less radiation, which is very critical for pediatric patients. And with those images, you can obtain a 3D reconstruction model. I'll get to that, why it is important. So with the EOS then, we are working on developing the EOS Catalyst, which will give to an end-to-end solution to the patient care. First, it starts with the high-quality images. The next thing that you need, the automated measurements. That's why the other technologies failed to be adapted, because without the automated image recognition, you are not gonna be able to measure the alignment, and there is no time consumption. As soon as the EOS image is obtained, the automated measurements, the alignment goals are gonna be available with the 3D modeling. Then the automated surgical planning is gonna be available the next.
Then you can plan the surgeries, you can modify the planning of surgeries, and you will customize the patient care, following with the intraoperative reconciliation, looking at your results, if you achieve the goals or not. Then finally, with that process, over time, we will collect enough data, then we will develop the predictive modeling, the AI, which will help us to provide even better care for the patients and better solutions. So the key factor for the alignment, automated alignment measurements is like, you know, you can ask the question: Why can't we do that with the others, you know, technologies and other images? The key is that you need to obtain images, both AP and lateral views, the same time, so you can verify your landmarks. So your image recognition technology can verify the landmarks and have much more accurate alignment in measurements.
Other technology, if it's been tried and it's failed because the accuracy is so low and reproducibility of the measurement goals is not reached to the high 90s, that you can't really rely on those numbers. So with the EOS, actually, we were able to, you know, reach that goals that the automated measurements are going to be available, which is very clinical in clinical practice. Every patient's images needs to be measured, and every alignment goals needs to be recognized, and if there's any, like, you know, misalignment on these patients, that the technology is going to highlight that, you know, abnormal values versus normal values, that the clinician will be aware of the, what the abnormal values in segmental and global alignment goals.
So then the next plan is going to be the surgical planning, because when you have the quality images, then the alignment measurements available, then us surgeons will be able to plan the surgeries. With these 3D modeling technologies, you can choose custom implants for each patient, the required cages, required procedures, PTP, LTP, ALIF, TLIF. You can choose whichever the procedure is going to work best for that patients. Then you can actually simulate those procedures in the planning platform to see if you can achieve the goals that these individual patients are needed. So then that will then the surgeons will have an access to the planning platform. So then, you know, we will have patient-specific products available for these patients.
The custom rods or pre-bent rods are really critical intraoperatively for the surgeons, because when you plan the surgeries, you need a template during the surgeries to make sure that you are achieving those goals. Your rod is your template in terms of aligning goals. In the past, we were doing all these surgeries, putting the screws, putting a rod, and we were hoping that we did the right thing. But without the template, you can't really produce reproducible outcomes, reproducible surgeries for your patients. So the rod, you know, custom rods and custom implants are going to be really critical at the end, during the surgeries. And intraoperatively, there will be another tool that's available that you can do intra-operative reconciliation. You will have these stitched images obtained by the C-arms. You can look at the alignment goals, if they achieved or not.
If not, you can modify the surgeries and to achieve those goals. Then the surgery become more reproducible and predictable. One of the other thing that I really want to, you know, pay attention to, osteoporosis is a big problem for our population. The aging population is significantly increasing, and current treatment modalities for osteoporosis, like, you know, the most effective medication is the Forteo, and in best cases, that it improves the bone quality 20%. So we measure the bone quality with DEXA scan. The T-score is that gives you the number that you can assess the bone quality. So anybody who has, you know, higher than -2 T-scores is osteoporotic. So and we have a lot of patients comes in -2.5, -3.
With the 20% improvement with Forteo, from 2.5, it goes just to the 2. We still have the osteoporotic patient. With the EOS technologies, we will be able to measure segmental bone qualities on each segment, and with that information, then we can choose proper tools to treat those patients, such as, like, fenestrated screws, expandable screws, if we need to put cement in those patients, if we need to do different technologies to improve the bone qualities or, you know, increase the bone anchors with those implants. So the bone quality measurement is also going to be really important when we are treating these patients, so we can properly choose the procedures and the implants that needed. So, EOS and the EOS Catalyst is going to provide end-to-end solution.
It's not going to be like, you know, the ATEC is dedicated to provide a procedural solution step by step and giving the predictable results for each procedures. But now, EOS is working on to provide end-to-end solution to the patient care. With that, you know, technology available, with the informatics available, we will be able to assess the patients properly, give you the patient's, you know, alignment goals, segmental or global, and then you can plan the surgeries appropriately, and then execute the surgeries and evaluate your intraoperatively with the intraoperative reconciliation. And at the end, with the data, you can go back and look at it, what works, what didn't work. We can continue to provide and improve the patient care. This is a end-to-end solution.
We have all these tools available, the EOS, the positioners, PTP, LTP, Invictus deformity system, which is the best deformity system, I believe, in the market, with the derotations and rotational tools, which will provide a much better predictable outcome to our patients, and it's going to be a standard care eventually. Without further ado, I would let one of the patients to talk about her experience.
When I was 50, I had determined I wanted to walk a marathon, and I noticed afterwards that what used to just be minor back pain was something more serious than that. So I kind of started doing some research on it, and I started seeing some doctors. From that point on till 2019, I'd had five spinal surgeries. After the 5th spine surgery, which I thought would finally be my fix-all, it was really evident to me immediately that I just forgot how to stand up anymore. When your spine is falling forward, everything goes with it, and it's not something you can fight against. I was so sad to think about having a 6th spine surgery, but in my heart, I knew I'm 67, I have a lot of life to live, and I didn't want to live like that anymore.
In pursuing which surgeon to go to, I had seen an EOS scan, which is a full body from your toes to the top of your head, and it had all these diagnostic numbers, and told you about pelvic tilt, and coronal imbalance, and kyphosis, and sagittal imbalance. I just was fascinated by the science, but even more so, I was fascinated by the before and after pictures. I knew at that point, that's where I wanted to have the surgery done. I wanted to have that scan of my body, and boy, when I got the scan, it's just an aha moment beyond proportion.
When I seen Susan in my practice, first thing we do is obtain EOS images. We've, you know, recognized that she had multiple surgeries because of her degenerative scoliosis. Because of the multiple surgeries, she developed a significant sagittal imbalance. She developed significant thoracolumbar kyphosis. She wasn't able to stand up straight.
Because I'd only had those incremental piece-by-piece X-rays, and then they fixed my spine in kinda incremental piece by piece over, you know, five surgeries. When I first met Dr. Deviren at UCSF, it was such a different approach to have him say that, "Here, I'm gonna have you take this full body scan, and we wanna identify all the areas where you have problems, so that we can fix you once and for all. I do not want you to have to have any more surgeries.
It is extremely critical for patients with one or two-level disease to obtain EOS images, because with one or two-level disease, patients are easily compensate those pathologies. Five years ago, when Susan started having pathologies or problems, if you obtain the EOS images, she could have avoided multiple surgeries. So that's why my surgery was successful, because we obtained the EOS images, we did all the measurements, we understand that the what the alignment goals are going to be, and we achieve those goals. But when you properly align the patients, even though it was the bigger surgeries, she did much better than all the other five small surgeries.
When I saw the EOS scan post-surgery, it made me want to cry, really, because I feel like I had a miracle surgery, and I have a pretty miraculous recovery. Thanking Dr. Deviren, and UCSF, and all the incredible people that have been a part of my journey to make me whole again.
I don't think that in very, very near futures, as a spine surgeon, we can perform spine surgeries without proper planning, because without proper planning, you will never be able to achieve high percentage of success rates. EOS is the only tool to give you the quality of images to properly plan the surgeries.
Okay, Good morning, and I'm very honored that Pat invite us today, share with you our experience on how really innovation can make a big difference in our patients. A little bit of my background. I became neurosurgeon in Colombia. I grew up in Colombia, but which is interesting is that actually I was born in Boston. That's why my beautiful New England accent. Yeah. So bear with my accent, okay? So then I moved to America because you know I really wanted to be part of the changing the status quo and be part of something that really changed patients' life. I did the residency again, and then I jumped very early on lateral surgery because I believed that my time was very well spent on this technology and transmitted to our patients, improving outcomes.
So I've been doing lateral surgery for around 17 years, and as you see here, the color moved from purple to green for a big reason, you know. Because at some point, the purple was running out of gas, and I couldn't find a way to be more into changing and trying to see what's happening with the lateral surgery. We did a lot of research, and we definitely validated that when you do the spine fusions from lateral, definitely you have less blood loss, patients go home early, and more than anything, they come back to what they want to do faster than the, you know, regular, other fusion procedures. So, but it was something very interesting.
We were noticing that even when we were training our own residents, that three out of ten surgeons actually were adopting the lateral surgery, which you wanted to know, why is that? And we were trying to work around every corner of this surgery. We trying to make it safer, a lot of things, and it works, but as Pat mentioned, for the surgeon out there in the community, for the surgeon that is not as doesn't have all these skills, and for some reason, there is something that can be done. And you guys saw this slide before, which normally when we do fusions, we want to achieve these three objectives. We want to decompress, we want to stabilize by putting the screws, and also the alignment, which Dr. Deviren explained it very good.
However, when we were doing lateral, we were able to achieve three of them on the lateral position, but the decompression was indirect. So means like, you were not taking the classic decompression, which is taking the bone from the back and trying to release the nerve. We were more relying on restoring the disc height, so not every patient was a candidate for that, and requires a lot of understanding and time for a surgeon to really adopt this, and that's one of the causes of that. When you're trying to do this surgery more efficient in a single position with the patient all the time on lateral, putting the screws on the lateral position is a little bit challenging. The natural way to put a screw is with the patient facing down, because everything is simple, yeah?
And not to mention, when we're trying to adopt now enable technologies that Dr. Foley is gonna mention, navigation and all these technologies, they love the patient in the prone position because a very stable position and doesn't move too much. And obviously, the alignment was very challenging on the lateral. When you put the patient facing down, the spine right away start trying to get the natural alignment, which we start to take advantage that. And that's how actually the natural, I will say, the natural evolution of the lateral surgeries do it with the patient facing down. And the problem is that it requires a dedicated platform from this. And this is what we were able to have and develop with Alphatec.
You know, when Pat give us all the tools, all the resources of engineers and all the enabled technologies, actually, this one becomes now a platform. And you may see a lot of companies now doing prone, but you have to understand that all of them, they're on the passenger seat. We are the one who really ride in this crest, you know? In 2018, no one said prone, doing, trying to do lateral in a prone position, the Prone TransPsoas, it was a craziness. Nowadays, actually, something that actually happens, and suddenly, every company is adopting it. But you have to understand that it's a combination of multiple pieces, you know?
For example, when you have the patient in the prone position, and something that we learn when the patient in lateral position, the number one complication of the surgery from the side is the potential injury on the lumbar plexus. So patients can wake up with weakness on the leg, difficulty extending. That is a very unique compared to the standard other surgeries, but because we were able to demonstrate that going from the side, you have less blood loss, patients were going home early and faster recovery, we say that we have to find a way to negotiate these nerves better. And before the SafeOp monitoring, the only technology that we had was just to help me to figure it out where the nerves are, but not if this nerve was suffering.
Just imagine, I don't know, you guys are familiar when they put you, when they put you these, pulse oximeters, when you measure the oxygen in your blood. You know, normally, give you a number, 90, 80. Everybody knows if you get, like, an 80, something needs to be done. You know, if you don't do something at that point, you will die or you will suffocate, who knows? So the problem with the lateral surgery before is, like, they put you the device, but they give-- they didn't-- they tell you, "Okay, this is where you can measure the oxygen," but the problem is they were not giving numbers. SafeOp, you know, it's an amazing technology because as you do the surgery, it tells you this nerve is suffering. So we, as a surgeon, we can take actions.
We can move the retractor anterior, we can do a lot of things, but at the end, the net outcome is that the patient actually will not have the nerve injury. So this one will increase the adoption rate. And then, not to mention what Chris, Dr. Brown, is gonna show, the retractor now is different, you know. The retractor before was a three-blade retractor, but comes with a lot of extra retraction of the nerves that we don't have to do it right now with this retractor, and there is a dedicated patient positioner. And you guys are gonna work, probably all the vendors right now, couple of companies, they have that. Remember that. All that positioners, which make me mad, is actually a copy of what we did, you know, which that's the industry, you know.
Even in cars, you know, I love cars. When Ferrari come with the whatever carbon fiber brakes, everybody have it, you know? Then you go to the Kias, to the Hyundais, everybody put it. You put a little spoiler in here, everybody copy, you know? But that's the way, you know. We're so proud that actually people following us. But the good thing is they're following us for the good of the patient, which we love it, you know. They're welcome, you know. The more we can help. So as I've mentioned, SafeOp is amazing. The way that you can actually predict that a nerve is suffering, this is like a breakthrough thing, you know? And also, I'm sure that everybody's gonna start doing the same thing. But I can tell you, it, it's amazing.
So what I can tell you is that once you put the lateral fusion in the patient facing down, then you start getting something very interesting, because suddenly, the patients are very fast when you put it on the table. For us, put the patient on lateral needs a lot of taping and time and X-rays, and right now, the position is very easy. When you can actually decompress the nerves at the same time that you're doing the fusion by doing the direct decompression, it's a very unique opportunity. So suddenly, there are more patients that are candidate for this, and the surgeons will adapt it fast. And then, obviously, this is gonna transmit on time, on gaining time and getting more efficient doing the surgery. So now, suddenly, we can start doing these procedures on ASCs. People can come early.
As you know, our tendency on fusions is less hospital fusion, the hospital spine fusions, more into the, you know, ASC settings, and this one actually fits the bill. So, and then, as I've mentioned before, when you have the patient in this position, actually is very welcome to enabling technologies, which is that the EOS that Dr. Deviren mentioned, and then, using the robotics and navigation. Nothing better than a patient facing down to adopt the navigation technology. And then at the same time, we keep improving our implant part, you know? We have cages that actually give you the lower doses and taking advantage of the position, then the patient get better angulation. We're treating the metals with different technologies, so we increase the fusion rate. So I will tell you...
What an amazing trip has been the lateral surgery. More exciting right now, actually, be able to get patients enjoy the challenge of actually become a new standard in their life by doing the surgery actually from the prone position. It's an amazing technology. I absolutely invite you to take a look seriously at this, because this is just the beginning. What is coming is gonna be amazing. I just cannot find a better way to fuse a patient. So, thanks very much. Now, Chris Brown keep telling you what we have. Thank you.
So, I was lucky enough, I mean, my life's all been lucky, but I was lucky enough to, when I got out of fellowship at Emory, to come along at a time when lateral was just beginning with NuVasive, and it changed my practice. I didn't like open surgery. I didn't like blood loss. I really appreciated the anterior column, which is what lateral surgery is, and I was lucky enough to be involved in that from the growth, and it really changed my practice. And then I got involved in teaching other surgeons, and I taught people all over the Southeast, and there were plenty of neurosurgeons and orthopedic surgeons that I taught that were in their late fifties to sixties that were tired of it.
Literally, some of these guys say, you know, we extended their career by five six years because the lateral surgery had such an impact on their patients. The surgeries were more straightforward, and they had better outcomes, and they literally continued to do their practice. I was on the main campus at Duke for about 10 years doing kinda typical academic, big, big cases. Then, at some point, I had to move to the community center, the community hospital associated with Duke, and it was really because the efficiencies of those surgeries got to the point where I couldn't be in an academic center, where it'd take 3 hours to turn over the room, or, you know... I had to move to, to, to a more efficient place.
I worked with NuVa throughout those years, and I switched over to using LTP in 2020. And what did it for me was PTP. Now, I will tell you, I've only done two or three PTPs, but it was a sign that there was finally a company stepping into the lateral market that was gonna take the reins and make innovative changes. So even though I didn't adopt PTP, it, there was a gap that was missing in leadership within the companies for lateral surgery. People say: "Okay, if PTP is so great, why do we need LTP?" Well, when I come home for Thanksgiving, Mama Brown makes a great chocolate cake, but Aunt Kathy also has to bring her heavenly brownies, so you can have two great things and enjoy them all.
In the world of spine surgery, spine surgeons can be very set in their ways and dogmatic about things. You know, the typical way of doing spine surgery is prone. So there were a lot of folks that didn't adopt lateral because they were used to doing their surgeries in the prone position. There's a lot of people that Juan talked about that don't believe in indirect decompression, that want to directly go see the nerves and free up the nerves, so they want to do it in a prone position. The beauty of the PTP is you're gonna change. There's this procedure called TLIF, where you go from the back to put in a cage. You're gonna see those surgeons are gonna adopt PTP because these are prone surgeons.
So, the great lateral surgeons that are. There's lots of lateral surgeons out there that have been doing it in a lateral position. They're really facile at it. They're really good at it. They're gonna want to continue to do what they're doing in the lateral position. You know, I think this is, you know, we've all stood up here, and we've talked about EOS, we've talked about a positioner, we've talked about retractors. We really haven't talked about any widgets and of screws and rods and cages that much, and that's where the revenue comes from. I mean, it's the sales of that. But the reason ATEC is going to crush for the next five to six years and get to a billion dollar faster than everyone else is because of the know-how they have.
This is the leadership on the executive level, the marketing people, the engineers are extremely experienced in lateral surgery. They kinda got the cream of the crop to make this go to the next level. And if you look at their surgeon partners and the ATEC surgeons, these are all the people that started lateral surgery. They were all the ones that developed it. We were the ones that went through all the learning curves and all the pain. So, really, what's amazing about this is, Juan mentioned that they're gonna copy us with a positioner. That, you know, they're gonna. They're doing all these things, and why is that? It is because they're all sheep, and they're not thinking about actually changing the process, right?
So an EOS machine, right? Then the positioner, then the SafeOp. You know, when Medtronic got into lateral, they weren't willing to invest a billion dollars in a neuromonitoring. So what did they do? They ran to OLIF. They ran away from the nerves because they didn't want to get neuromonitoring. Globus, what did they do? They developed an expandable cage, thought that was gonna take the market. They didn't want to do any neuromonitoring, and they just developed a three-bladed retractor like everybody else. All these companies did it, and then NuVasive made the mistake of dropping the leadership position. They literally had such an opportunity to get that adoption from 25%-30% to 50%-60%, but they lost their way, and that's why I switched, and that's why I think a lot of us switched over to it.
You know, when you think about surgery, you know, do all this stuff in the OR, but when you think about surgery, you know, I've seen that patient for six months to a year in clinic. I've gotten a bunch of injections. I've done a bunch of PT. I take them to the OR, and the part where I put in the cage and the screws is about 15 minutes, and then I follow them for the rest of their lives yearly. So the key to our success long term is a couple things: making that procedure so reproducible that everybody can have the same outcomes.
Regardless of skill level, we've got to get to the point where that surgery patient doesn't have five, six surgeries. They have one surgery, and it works. Like, we're not going to make it if we're touting 15%-25% revision rates. And that's where all these things that we're investing in with EOS, and it's going to tell us, it's not only going to tell us what to do, but then it's going to tell Brown what she did wasn't good enough. You can't keep doing that 20 more times. You didn't accomplish your goals of the surgery. So all these things between Safe Op positioner and retractors is really what's going to drive the business.
It's not what's going to, you know, bring the money on a widget basis, but in the end, it is because these surgeons are going to be compelled to do what we're doing because we're now... We're not sheep. We're going to lead the way on this. So this is a perfect example of how we're leading the way. Single position surgery. If you were in NASS three, four years ago, that was the big talk. X360 was NuVasive's thing. Medtronic was all over it. But you know what they didn't do? They just said: We're going to do single position surgery. You're going to do it exactly the same. You're going to have the same retractors. You're going to have the same cages.
We're just going to call it single position surgery. Very difficult. Like that, like Juan said, putting those screws in laterally is really, really tricky. Doing an ALIF from the lateral position. Surgeons, like I said, don't like change. They're very dogmatic in how they behave and how they think. It's really hard to change them. But with lateral ALIF on those other companies, it changed the way you had to do it. You had to put it in obliquely and then rotate your hand and put it in, or take off the inserter and tap it in. When you're doing ALIF, like, there's some really big vessels there that aren't easy to deal with if they get hurt, like, meaning death or not death. But what...
When we do single position surgery, we're actually allowing the surgeon to do a lateral ALIF with a direct anterior approach due to our positioner. So we're not making them change and do something, we're giving them the tools they need to do what they've always done, but now do it through a minimally invasive way that's much, much more predictable. And the like, I'm talking about positioners and retractors, right? Like, I never thought the day would come where we weren't talking about widgets, to be honest. But our positioner, I think this is an incredible game changer. You know, I've done thousands of laterals, and we're using three-inch tape to position the patient on the table. Like, we're literally wrapping them three times around the hip, two times around the chest, down the leg.
And I've always said, "Let's at least sell tape." No one's ever listened to me on this, but no one ever, like, developed a positioner. How crazy is that? Well, now we've developed a positioner that we can do it on a bed that is very conducive to doing everything, meaning it's radiolucent. The other beds people were using weren't radiolucent, so if you had a scoliosis or a curve, you could have a hard time seeing things. So we have now a positioner where you can put it on a radiolucent bed, it'll bend them, twist them, and rotate them. So now single position's easier. So when I do my ALIF, I do my lateral surgery, and then I twist the bed, I do my turn the positioner, do my anterior, and then turn the positioner, put the screws in.
So it actually makes single position very, very reproducible. Then we have a two-bladed retractor. Everyone on the market had a three-bladed retractor. I've been involved in a couple designs of retractors, and I'll remember there was one engineer who's now the head engineer at ATEC, and this is probably seven years ago, said, "Should we think about a two-bladed retractor?" I'm like, "Ah, you're an idiot." Never thought, like, we're not going to do this. The three-bladed works great because we're all really good at three-bladed. Now we've got this two-bladed retractor that is a game changer. The reason ALIF, meaning straight from the tummy to do surgery, is the fastest growing spine procedure, awesome fusion rates, pretty straightforward. You're looking at this disc, there's nothing in your way.
Everyone, the general surgeon gets everything out of your way, and we get great alignment, great correction of alignment from that. But with this new two-bladed retractor, it's like doing an ALIF through the lateral approach. There's not a piece of muscle in my way. I'm looking at the disc. The disc cleans really good, which means I get more lordosis, and it makes the procedure much more reproducible. Surgeons don't like uncomfortableness, so if you can, if you can expose the disc and have no muscle fibers, nothing creeping in, it makes it much more reproducible and adoptable. This is one of the first folks we did this, a patient who is 51 years old, previous discectomy at two levels, the bottom two levels that I've circled. They had done PT.
As I said, the part in the OR is a tiny part of this. I mean, I probably knew this guy for three years before we operated on him. And he was unable to walk because he had a bunch of leg pain with walking. And this is what we did from a single position. So the bottom cage there is we did through the standard anterior approach, and then I did the next level through the lateral approach, and then I put the screws in the same positioner. Same idea. This, a 48-year-old. He had had previous discectomy, had a lot of leg pain. You can see they've got two worn out discs in the middle. There's a little bit of instability at that top disc that looks kind of crappy.
This is, I mean, this is the retractor. Like, if you ever take the time to go Google lateral retractors, that image is awesome. I know exactly where that cage is, and when you think about that cage, you know, the front of it is 5 mm from the aorta, the back of it's 4 mm from the nerve, so it's really important to put that cage with this retractor. And that's the view you get. I don't know if you appreciate it, but that's all white disc. That is not a typical view you'd get with a 3-bladed retractor, which is everyone else in the market. Now, I'm sure we'll see some me-too retractors coming up in the next several months, but you know, we led the way on it.
We won't be the sheep. And you can see great lordosis, great, great alignment all in one position. Remember, single position isn't awesome because I'm great, I did this in an hour and a half. Single position surgery is great because the most expensive room in a hospital is the spine OR. You know, that's $150 a minute. If we can do four of these cases, not only does it help the hospital, but more importantly, my patient does surgery in an hour and a half versus three hours. My patients could have a lot less anesthesia, a lot less blood loss, and a lot better outcome. Thanks.
Try to sneak behind you guys. Well, good morning, everyone. My name is Kevin Foley. I'm a Professor of Neurosurgery and Orthopedic surgery at the University of Tennessee Health Science Center in Memphis, Chairman of Semmes Murphey Clinic. I want to talk to you about the new navigation and robotics platform for ATEC, Valence. So, why Valence? Well, I think what we've heard this morning really speaks to why Valence. The valence electrons are the electrons on the outer shell of an atom, and when two atoms bond, one of the strongest bonds you can have is what's called a covalent bond, where those atoms share those electrons. So we've heard this morning about the wonderful planning technology that ATEC has with EOS and what can be done with that preoperatively.
We've heard about the wonderful tools and procedural solutions that exist, but in order to make those two things work together, you need a bond, you need a link, and that's what Valence is for ATEC. And frankly, it fills a large gap and represents a huge opportunity for the company. So a little bit about my background. I finished my training a little earlier than these guys did. I was in the military for a while, was chief of neurosurgery at Walter Reed. When I finished my service, I joined Semmes Murphey and UTHSC. Early in my career, got involved in medical device design. Worked with Pat when he was a younger man, to create something called MED and tubular retraction, which is still widely used today. That was back in the mid-1990s.
Worked with Brad Clayton, back in the room, in the mid-1990s to create Stealth. I actually was the surgeon who developed the spine navigation system for Stealth. It was called SNT in those days. We sold it to a little company called Danek, and Danek was later acquired by Medtronic. So I've been involved in navigation for decades. I watched the evolution of robots and spine with interest and noted some needs, some gaps. Brad and I got together and co-founded Fusion Robotics in 2018, and then just this year ATEC acquired the technology. So robots have been used in medicine for a relatively short period of time.
Navigation goes back to its beginnings in neurosurgical cases, and robots early in neurosurgery, cranial neurosurgery, and then, of course, with ROBODOC in the early 1990s with total hip replacement. And you see the evolution, and, oh, we're still in the midst of this evolution, but the Valence system represents the evolution and providing a few advantages, I think, over some of the other systems that exist out there. And I think it's important to note that as much as has happened with robotics and navigation, especially when it comes to the robot side, we're still in the early adoption phase. So there's lots and lots of opportunity. That's the take-home message from this slide. And so what did we do with the Valence system?
Well, we saw the huge cost of the legacy robot systems, the large footprint these systems have, the fact that they're a bit unwieldy, and they do add time to procedures. Then there are some other interesting things that can be done to make the software a little bit more surgeon-friendly, to obviate line of sight issues in the OR. And all of those things are integrated to produce Valence. There's a reason for each of these pieces of the puzzle. And so with Valence, you get very efficient workflow. You can use it with 2D or 3D imaging. You can use it in an ASC environment. It's t he cost is not that off-putting compared to the million-dollar robots.
So the ROI for the surgeon, for the hospital, the proposition is a very good proposition. The important take-home message for you guys, though, is that this represents a missing piece for ATEC. ATEC has done great on the preoperative side in terms of planning and imaging, great on the intraoperative and postoperative sides, but that linking of these two, that bonding of those two with a navigation platform and a robotics platform is what Valence represents. Thank you very much.
Thanks, Kevin. Well, thank you all very much. My name is David Schwartz. I'm from Indianapolis, OrthoIndy, and started practice in 1995, so I'm also one of the older guys out here, unfortunately, with Kevin. OrthoIndy, if you're not familiar, it's one of the largest orthopedic practices in the country. Our individual practice is 80 orthopedic surgeons with 8 spine surgeons. We have two physician-owned hospitals, three ambulatory surgery centers. We've recently had an MSO that we started, now 1,000 providers, and about 30 spine surgeons extending from coast to coast. I was lucky to be trained in lateral surgery, like the others, from Dr. Pimenta, back in, I think it was around 2006.
It was something that when I first started in practice, was completely different than I had been exposed to, and so the power of lateral surgery. I was at dinner with Dr. Pimenta in, I think, 2017, and he brought up the idea of doing the same lateral surgery, but now in the prone position, face down, and said, "We're interested in starting to develop this project. Are you interested in it?" I said, "Absolutely." And I think in 2018 or 2019, NASS in Chicago, there were six of us in the PTP Summit meeting, where we've been doing cases or, you know, anywhere from three to five c ases each. And then most recently, in our PTP Summit meeting, I think we had about 65 or 70 surgeons there.
So you can see just in three years, the adoption we had. In 2020, it went from just a lateral prone to what we call PTP, and we're pretty proud to say that PTP is not prone lateral because of all the things that ATEC has let us develop as surgeons. In 2022, I was instrumental in our hospital system purchasing two of the EOS systems and placing at two of our facilities. Why is PTP so important? You've heard it over and over again. This slide is great. You know, this is the essence of spine surgery. We need to decompress the nerve somehow, whether directly or indirectly. The lateral surgery lets us do it indirectly. Being in the prone position, if we need to do additional decompression, we can do that.
We need to be able to stabilize the spine, and so we can do that again. We're used to having patients face down. It makes it much easier to put our screws in, and then alignment, and that's the key. And I would tell you, you know, I've been doing development for, you know, almost 30 years now. I have patents on it with several companies, Danek, Medtronic, NuVasive, Alphatec. And what's led me here is really what I think Pat and his whole team, you know, what their feeling is that we need to have a procedural solution. We can't just build widgets for things. We need to have a way where surgeons can take it from beginning to end and help them get that procedure done and supply us what we needed. That's why we have these positions.
That's why we have these retractors and how it's so important to us. The other thing is, from a surgeon, you know, their feeling is, and it's said over and over again, is good medicine is good business. And so from us as a surgeon, letting us do the things we need to do, like Dr. Brown said, we follow these patients for years and years and years. We know that, you know, if we can get a good result, you know, that's the company that I'm gonna be working with. And that's why I've followed this team all the way through from the old days of Danek to, you know, Alphatec. So why is PTP so important? One of the things is the sagittal correction, and that's what we call lumbar lordosis.
And it's when you take a patient prone, you get this sway back, you know, in lay terms, and that's so, so important. If you hear people saying, "Oh, don't ever have spine surgery, it's terrible," it's the reason is that patient—surgeons aren't paying attention to this. And the interesting thing is, when we first started PTP, our thought wasn't to do this, but it was, "Let's make it more efficient." So when you do this lateral surgery, like Dr. Uribe, Uribe and Dr Brown.
Were talking about, we have to remove the drapes at the end of the surgery, turn the patient over to the face down position, bring all new sterile equipment in, and start the second part of the operation, and that can take an hour to an hour and a half, and as the most expensive room in the hospital, it's not efficient. That was the first reason we did this. Then we found out, when you put them in this position, we get this amazing sagittal correction, and it just has how the body falls. And this is just an example. One of the things that we operate on, and you can see in the picture here, is spondylolisthesis. Oftentimes, when we put them in this prone position for PTP, that spondylolisthesis reduces, just makes our surgery that much easier.
But it's that lumbar lordosis or sagittal alignment that's so important to us. So after we started seeing, you know, hey, we're getting this lordosis we weren't even expecting, we went back and studied it, and a TLIF, which is the common posterior fusion that's been done for, you know, almost 20 years now, or maybe longer, you get about 1.7 degrees of lordosis at each segment. That's that sway back part. The lateral fusion, it's about four degrees, and what we found on the PTP, we're actually getting six degrees, and this was an early study just to look at what happens, and this picture shows when you're laying on your side versus laying face down to the disc space. You can see how it opens up.
What we've actually found out, more recently is that we can actually dial in what our lordosis is per level. If we put a 10-degree cage in, we have 10 degrees. If we put 15 degrees, we get 15. If, like Dr. Uribe was speaking earlier, being able to dial in with an expandable cage, we can actually get that in the prone position where we could not get that before. So putting it all together, as far as being able to take navigation and robot, we have a system now we're able to put screws in exactly where we want. Why is navigation so important to me? You know, I've been doing this for almost 30 years. I have one of my former fellows passed away from leukemia, which I'm pretty sure was radiation-induced.
So if you're getting using fluoroscopy continually in surgery, it's something to worry about. I've had the benefit of Dr. Foley's navigation system that I've been using for almost 18 years now. And so you can align that with a robot, where you can put screws in exactly where you want. Well, I'll talk a little bit about EOS, but it's really important to put those screws where you want, the angles you need, and how to do it. Now, we can navigate a prone position, where we're doing PTP. We're able to navigate that, and at the same time, again, SafeOp. Nobody else has a way of monitoring the nerve health and making sure that nerve is okay. It's incredibly important because you don't want the patient to wake up, the X-ray looks great, but now they have a weak leg.
That, that, you know, that defeats the purpose. So if you look at. You know, it's been interesting, 80% of navigation hasn't been used, and there are units sitting around the country, and, you know, we're seeing similar things with robotics. And the problem is that companies are developing these systems, which will become very powerful, but they haven't developed this procedural process for them. And so as a surgeon, what we need is not just to say, "Oh, we have a great navigation thing," but, "This is how we use it. This is how we put it together." And again, that's the mantra of ATEC, and through Pat, is that this is procedurally how we do it. When Pat's team first developed XLIF, it was procedurally, how do we do an XLIF procedure, lateral fusion, and do it correctly?
You know, and the other companies just try to be me-toos, and, you know, it's flattery to copy, but without investing the time in the procedure, it really doesn't help. So the next is EOS. So I look at EOS as, like, the blueprint if I'm building a building. It, the computer-generated gives me all this data that I need, so I can actually use their products correctly. So it's the continuum. Use their products, and I will tell you, every product they put out, first-in-class product. It's, you know, amazing the effort that goes into it, whether it be a positioner, whether it's biologics or the widgets we put in spine.
Again, the AlphaI nformatiX, the part that's really important, like everybody's been speaking about, after we do the surgery, and we put them back in the EOS machine when they come back into my office, and the computer can look at all this, and it says. It does two things. It says either, one, you know, "Schwartz, you messed up. You didn't get the results we needed," and the computer says, "This is why we didn't get those results," and it learns from it. And on the next surgery, every single surgery should be getting better and better. And the key for EOS, and there is no other system really like it out there, but the key is that you get this data beforehand, and it continues to learn on it, and that's so important. Is it...
And then ATEC has put together systems for minimally invasive surgery. It's like, again, going back to the blueprint. If I need some piping and conduit for electricity, and I want to put a sink in, I have two choices in a room once I've built it. I can either rip the wall down and put everything in, or I can make a hole at the top and the bottom of the wall and fish it through and get it to be done. Well, that's what we're being able to do with surgery now, and that's why patients are getting, you know, so much better. Remember, you know, we see it all in, as physicians, that these surgeries, a lot of them are being approved only for ASC use, so you have to have a patient as an outpatient.
So you, you're gonna need a system now, where you can actually get these patients going quickly and get them out of the hospital, not spending, you know, weeks at a time. So EOS system, you know, I, I brought two of them to our hospital. Why? I looked at everything out there, there was nothing like it, not just the X-ray, but the computer that goes with it. Our initial IRR was about 30%. We've had our first unit now. The ROI has been 28% on that. My partners are happy. We have two of them. I, my guess is we'll be buying another three in the next year. One of the biggest black holes and bottlenecks in your clinic is actually X-ray.
So we typically send somebody to X-ray, and it's 20-30 minutes before they get back. It has to do with the positioning the patient, trying to X-ray. This takes about 30 seconds. I'm seeing more patients every single day in my clinic because of this. And then it gives us the data before and after what we need to do. There's just y ou know, I have two little case presentations. I think a picture's worth a thousand words. This is a young man who wouldn't let me take a preoperative picture of him 'cause he called himself the Hunchback of Notre Dame. This is his scoliosis. He had a large hump on his back, and he was extremely self-conscious. This is literally about two weeks after surgery, and you can see the smile on his face 'cause he feels normal again.
We're able to take, you know, through the EOS, through all the equipment that they use, we're able to do this. Lastly, this is a 78-year-old gentleman. Again, this is how important it is to change people's lives. He was like, "You know, I'm 78, Doc. I don't have a lot of time left. What can you do to help me out?" And using EOS, we're able to take the data. Using PTP, we're able to do a minimally invasive surgery, the instrumentation, and I'll let him, you know, tell you how, what his thoughts were.
I had my PTP surgery yesterday, and I need to know how fast I can go mule deer hunting out in the mountains.
How's your pain?
Don't have any.
So, so this is what, this is what we do and why we do it, and it's, you know, with the help of companies like ATEC, we're able to do that. So we. As a surgeon, I thank them every time I'm out there visiting. Thank you for making me, my job better and taking care of my patients, so thank you very much.
Thanks, Dave. Yeah, thank you guys very much. Like, it's so important for you guys to hear from the surgeons. You guys hear us blather, I think, all the time, and, you know, one of the things I think is fascinating. I've been at this a long time, sadly enough, these guys remind me. But the number of levers that we have to pull to ultimately create significant value within spine surgery is phenomenal, and I just feel like, you know, the best is yet to come. Literally, we are at the beginning of this run, but I greatly appreciate you guys engaging and, you know, taking an interest in terms of what we're trying to do from a surgical perspective, because, again, we're just getting going.
Just want to say thanks to the surgeons for sharing their experiences and greatly appreciate your interest in the company. Thanks. Our booth number is 1801, and as you walk through the thing, you'll see a big green sign, ATEC. Come see us at the booth.