Good afternoon, everyone, and thank you for joining us at this year's Canaccord Genuity Musculoskeletal Conference. My name is Caitlin Cronin, and I'm one of the medical device analysts here at Canaccord Genuity. With me today is Alphatec, one of the fastest-growing companies in all of spine and, for that matter, orthopedics in general, with a differentiated portfolio and focused R&D strategy. We're pleased to be joined today by Pat Miles, CEO. And before we begin, I want to remind everyone of any relevant disclosures which can be found on our conference and our firm website. And with that, I'll turn over to Pat for a brief presentation.
Thanks. Thanks very much, Caitlin. Appreciate it. And thanks for that warm welcome. It was warm. Thanks. A few things I begged for, plus. So we are ATEC Spine. Previously, I think a lot of people knew us as Alphatec Spine. There will be some forward-looking statements, so read that at your leisure. We are only spine, and it is a great time to be only spine. And so from about six years ago, we've had a CAGR of about 40% per year, so we've grown aggressively. I think a lot of people think spine is tired. We think there's so much opportunity in spine. It's a massive market, and it is yearning for predictability in general.
We have built the company in a way where there's been a lot of investment on the front side, and so we feel like there's a profitable run forward, and we feel like there's a lot of catalysts that are kind of a wind behind us with regard to lateral surgery as something that we are very familiar with at ATEC. We've had a lot of enabling technology launches. There's opportunity to utilize some of the technology that we acquired in deformity. I'll go into that a little bit. And there's a lot of market disruption, if you have not heard, if you're a spine person, as well as we're very early in the international space. So there's a lot of opportunity. We've gone from about 1%-6% in terms of market share. It's a massive market. There's huge companies in the space.
As I said, we've grown about 40%. New surgeon adoption's been around 17%. Procedural volume's been about 24%. And what we do is we believe in procedures. And so a lot of companies will come out here and talk to you about individual products. And the way that we think about spine is the way that a surgeon thinks about patient care. And a surgeon thinks about patient care in the realm of what assembly do I need to put together to ultimately serve the pathologic state of that patient. And so we think about things in procedures. And so when you see an increase in terms of revenue per case, it's the assembly of goods that ultimately reflects that. It's not the price point. This slide should be a stark reminder of this is a market in need of innovation.
And so when you have a total knee and a total hip market with a revision rate out to 10 years of less than 5%, and you have a spine market in short segment surgery at 10%-15% within 1-3 years, and you have an adult deformity segment in 2-5 years at 25%-30%, it's yearning for solutions. And so to suggest that it's commoditized would, in our minds, really kind of pigeonhole the currency. And so there's so much opportunity to make spine surgery better, and it's just a matter of really kind of delving in. And so we like to say that spine surgery is unsettled, and we believe it is. What makes us different is all we do is spine surgery. Our existence is dependent upon if we do good in spine surgery, we're going to do fine.
If we do bad in spine surgery, we're going to go away. There's a lot of know-how. I think that those of you who don't know the company, there was a company so we're based in Carlsbad, California, about 15 miles north of a previous company that did reasonably well. So we probably had 200 people come up the coast from the previous company. So there is a know-how from a mechanical perspective and from a technological perspective that's very strong. So I would tell you, it's a small company. We did about $483 million last year that we announced. Our guidance this year is in the $595 million range. But there's a lot of know-how for a small company in the space. I still consider us a small company in the space.
What we try to do is create distinction, again, with regard to the procedures, how you assemble goods to ultimately reflect a clinical distinction. That falls within the auspices of what we call proceduralization. I'm not sure it's a word. We're big fans of informatics. And so if informatic can drive a better decision for a surgeon, we love that. So we feel like neurophysiology is a tool, especially in lateral surgery, to drive a surgeon at a better decision tree. We acquired EOS Imaging about 2 years ago. We feel like that's another great technology to inform surgery. Spine's full of a ton of variables, and the opportunity to mitigate variables is something that we think is very, very important. And so in 2018, we really kind of built the team. There's a real kind of lateral know-how in the company.
I was one of the poor guys in Brazil with a surgeon by the name of Dr. Pimenta, where we were taping people to beds and evolving a lateral approach. I will tell you, that's come a long way since then. And so there's a real expertise, not just through me, but through the team in terms of lateral surgery. And so how we've developed the company is really kind of distinguish ourselves in that realm. We've applied it and evolved the procedure. A lot of confidence gets built with surgeons when you provide them with a better tool. And oftentimes, it has a halo effect, so it expands their utility of product. And that's kind of happened over 2022 and 2023.
And then where we are right now is really in the early, early phase of this reflection of an ecosystem of informatics in EOS, whereby what we're doing is really kind of going down the road of what a lot of people talk about on the AI front, but in more of a predictive analytic. There's so many questions about spine surgery, so many opportunities, so many ways to evolve from an arena of gestalt into a data environment. And we feel like owning a piece of imaging is a great way to ultimately evolve. And so here it is. So from a preoperative perspective, just understanding what's going on with a patient, EOS, if you're unfamiliar with it, is a full-body image. Imagine that. The spine has something to do with the pelvis. So often, they go very narrow, take very, very narrow films.
And so our ability to start to do planning with regard to the goals of surgery, the goals of spine surgery are decompression, stabilization, and alignment, alignments, the correlative to durability. You saw the durability back at a previous slide of being very poor. So our opportunity to start to get better durability through an understanding of alignment. There's also a bone quality measure. A lot of people who have spine surgery have suspect bone quality. If stabilization is a big part of bone quality, you want to make sure that you have an anchoring opportunity with regard to understanding someone's bone quality. So utilizing that information and then engaging a procedure or architecting a procedure around the specific requirements of that patient, we feel like, is very important.
Doing that and then following up on it and understanding exactly so get the exact same image or get an image beforehand, integrate it into the operative experience, and then understand how you did against what your plan was, we feel like, is a valuable part of mitigating variables. That's the ecosystem that we talk about with regard to EOS. As I said earlier, we think our best is yet to come. There's just a ton of opportunities. We've yet to see the reflection in EOS in terms of what we're building as a company. So again, we're about $500 million in revenue, and we've yet to even see, in my mind, any type of a meaningful influence with regard to what we're going to do with this technology.
We recently, in the last year, acquired a navigation robotic platform that we're super excited about. We think the opportunity to integrate these things into the operative experience. Our view is they are part of a procedure. When we contemplate proceduralization, we contemplate navigation and robotics as part of that, depending upon the need. We think that the disruption in the market is opportune as can be. We think that the Globus NuVasive assembly, we think that the Orthofix and SeaSpine assembly, and we think about the Zimmer spinning out to private equity. Equity is all opportunity. We're in a very kind of a neat time in the company's evolution in terms of making sure we have the salespeople required to ultimately serve the interest of the surgery. And so there's a lot of availability out there we're excited about. We're getting increasing hospital access.
We literally just started in the international space in Australia and New Zealand. We'll be in Japan by the end of this year. We have a ton of stuff forthcoming from a surgical perspective, especially in the lateral space. We'll continue to expand our lateral footprint while we build a deformity franchise. That is who we are, so.
Great. Great. Well, thanks, Pat. Lots to digest here. Maybe just starting with the ATEC informatics ecosystem. You've had a lot of the pieces kind of fall into place for you on this to really execute on this connected ecosystem with SafeOp, EOS, Valence. Can we start at a high level with why a connected ecosystem is so differentiating within the space and what you're really trying to solve with these technologies?
Yeah. Again, I think that there's such a misdirected view as it relates to the commoditization of spine surgery. I think one looks at the currency of screws and implants, and they say, "Gosh, that's the business." The problem is I always tease surgeons and say, "My problem is I got to sell you a bunch of screws. Your problem is you got to care for a patient." If we're not aligned in terms of that interest, then there's a problem. And so our view is that if you start to look at all the variables that a surgeon has to address with regard to specific approaches, there's just such an opportunity to integrate technology. And so as we think about different spine approaches, one of the things that we've done is we've taken the technology that you've described, but also, for instance, patient positioning.
I don't know any of us who would want to go in surgery and be taped to a bed. And the suggestion that there's nothing to do left in spine surgery to make it better is silly. And so our view is we'll go ahead and design a patient positioner. Todd rarely lets me come to these because I say things that are probably bad. Todd's our CFO. But the trifecta of terrible businesses are patient positioners, retractors, and neurophysiology. But the requirements of a spine surgery to be successful are patient positioners, neurophysiology, and retractors. And so the issue becomes is, are you willing to invest in those things from a procedural perspective to ultimately reflect for a better outcome? And our view is if we can compel someone clinically, then our opportunity to become a relevant player is high.
If you're in doubt about the technology, if I'm going to go from the skin to the spine from a flank position or lateral position, there's more nerves than there are bones. So I better understand where the nerves are. So when you start to think to yourself, "What should be my investment thesis associated with if I want to be a relevant player in lateral surgery? I better have something that tells me where the nerves are." Then the sad part about it is how do you not just be transactional with regard to knowing where the nerves are?
If you're a student or curious as it relates to what the problems are: "Can I understand if there's a health-related issue with the nerve?" That's where it's like the investment thesis comes into let's assemble this technology in a way that ultimately creates the likelihood to mitigate the variables within spine surgery that creates better outcomes.
That's great. And moving on, you touched on EOS in your presentation. Maybe we could talk about EOS Insight, which I think you anticipate launching in mid-2024. How is this iteration different from the basic EOS system, and what's really currently being commercialized there?
Yeah. So the EOS system is. I've yet to meet a surgeon who doesn't value a full-body biplanar, meaning I'm getting to see the patient in two planes, standing image. And what you can do is you can do a 3D reconstruction of that image in a way that the surgeon totally understands what's going on in totality. If you're a patient, oftentimes, if you're hurting, you compensate. If you compensate, likely, you're bending your knees or you're retroverting your hips. So to understand exactly what's going on with that patient becomes very, very important. And so when you start to think about variable mitigation, you say, "Gosh, how do I start to mitigate the variables that ultimately drive me at a specific spine solution?" And so if alignment is the greatest correlative to durability, I want to understand what the alignment is.
And so if I can go ahead and take that image and get a full-body image, and then what I can do is integrate that into the operative experience and reconcile it intraoperatively, and then I could evaluate how I did postoperatively, that seems like a great opportunity to us. And so the interesting part is EOS is a French company that I think they consider themselves more of an imaging company. And we've always felt they were an informatic company. And so the opportunity to take the informatic and integrate it into what those guys are what they're doing surgically and then evaluate against it, there really becomes a greenfield of opportunity with regard to what you can do with that image and ultimately how you can get predictive.
There's guys doing gait analysis with regard to, "If I fix someone in this position, this is how they're going to walk." So there's tons of predictive elements that we could utilize with that tool that ultimately will provide us insight that will avail to the surgeons in a way that makes for better spine surgery.
That's great. And maybe just turning to an important upcoming piece of your connected ecosystem puzzle with Valence, can you explain what you mean when you say the only workflow-integrated navigation and robotic solution?
Yeah. One of the virtues and there's some guys here from Fusion Robotics that were part of the original contemplation of the tool. We love, again, to the proceduralization part of these things. There are different times in a spine procedure where this is very, very valuable. And one of the other things is we've developed a procedure called what we call PTP. And we think it's the next generation of XLIF. We are all there for XLIF at NuVasive. I was there for 17 years. We know it well. And so one's ability to work on both the back of the spine and the front of the spine at the same time, we feel like, is very, very valuable.
If you start to think about how the spine is and releasing the spine and to be able to realign the spine, having both columns availed to you during a spine procedure is important. And so the ability to utilize a tool that ultimately integrates neurophysiology with a navigation piece, with a robotic piece, we feel like, is super important. And so just the ability to start to integrate these technologies in a workflow that ultimately avails for elegance, predictability, which has, again, been the kind of evading element of spine surgery since I've been at this for 30 years. So it's opportune.
What are really the remaining steps to integrating this system into your hardware ecosystem as well as the rest of your enabling tech ecosystem?
Yeah. It always takes three times as long and three times as much effort. And the opportunity is going through all the regulatory piece. We've gotten the clearance with regard to all of our implants. We now need to integrate it into the operative experience. And so what you'll see this year is we'll place pedicle screws like everybody else with robotics this year. Next year, you'll start to see it integrated into the tool. Part of the fun of the Insight thing, I would tell you that this year is a big kind of the big launches for us this year is the Q2 2024 of what we're calling EOS Insight. That'll be a big one. You'll see a little bit of a reflection of the robotic piece and the navigation piece throughout the year this year, but not a huge one.
But in 2025, you'll see that launch in a big way and be part of the procedure.
Maybe just remind us, what are really the differentiated benefits of the robotic system in Valence versus current spinal robotic technologies?
Yeah. Again, what's fascinating to us is I want a small footprint. I think that I've heard people from larger companies talk about how they want to dominate the capital spend in a hospital. I don't. What I want to do is I want to dominate the procedures. Again, I don't think it requires a huge footprint to do that. So if you see a lot of the pathology going to the outpatient setting, why would you not want a smaller footprint that avails more technology to more people? So literally, the neurophysiology piece looks like an iPad, and the robotic piece is extraordinarily small where I could have wheeled it on the plane today. So we're big fans of small footprint. We don't need a huge piece of capital.
We already have a huge piece of capital called EOS, but there's plenty of room outside the operating room to have that. So we're big fans outside of the operating room, less fans inside the operating room.
That's great. And then touching on the backbone of your strategy, you mentioned it, proceduralization of spine. How does this proceduralization really help you leverage the enabling technology that you have right now?
Yeah. The great part is we are in a stodgy environment. Not to name names, but there's big companies in this thing that aren't paying much attention. And there are so many opportunities to make this stuff better. And again, I think about a patient positioner. And half of you want to say, "Really? It's crazy." But there's opportunities to position patients in ways to make lateral surgery better. There's ways to patient position to make idiopathic deformity better. It's a flexible deformity, the ability to start to understand how great would it be for us to be able to limit the volume of implants in a young person that ultimately is getting a scoliosis surgery? And how great would it be to start to understand the reciprocal effect of that patient based upon shorter segment surgery?
How great would it be to integrate the neurophysiology piece from a motor evoked potential standpoint as you're doing a rotational maneuver for a young patient? And so our view is there's so many ways to make this stuff better procedurally. It's like going to a restaurant and saying, "You have to make the knife and the fork better." That's kind of hard. But if you say, "I get to make the whole experience better," that's a whole different dynamic. And so our view with regard to the procedural thing is there's very little that we won't do as it relates to ultimately align with the surgeon to ultimately make for a better experience. And we feel like that's a great business.
Really bringing this all together creates a formidable portfolio offering, but without the right people, driving adoption can definitely be challenging. With the recent market disruption, I think you said about a third of the market's been profoundly disrupted, which you mentioned earlier, Orthofix, SeaSpine, Globus NuVasive, pending sale of ZimVie to private equity. Could you discuss how you're poised to really take advantage of this disruption and how you've already done so?
Yeah. I will tell you, and I think that there's people who know the Alphatec story viscerally over the years. And we were given such a great opportunity to restart the company. And if you'd have told me six years ago that we had seen this disruption, I would have never believed it. I'm the luckiest human being alive. The opportunity is one of where there is a reasonably large market participant that candidly now sees the next generation of the products that they had previously had. And so not to be coy, but I think that if a person from NuVasive comes to Alphatec, there's not going to be a long learning curve as it relates to understanding the design requirements associated with what we're doing.
And so the great part is, we've—I think—we had there was 18 that came over at one time up in New York and New Jersey. That was good. We're trying to be hugely methodical. Our responsibility at $500 million is to become profitable. And so what we want to do is be methodical with regard to making sure we get the right people at the right time and grow the company as we intend. And so there is a plethora of opportunity.
How important are really these newer technologies that you've already mentioned in bringing on this distribution? Are there any product gaps you see now that might prevent someone from transitioning over?
Yeah. I think there's always product gaps. And I don't know of a company that has every solution for every spine ailment, honestly. But I think motion preservation is a place that we love, and we think it's an important thing to have in the portfolio. No time soon, but I think we've been relatively transparent with regard to that. I think there's some biologics is a place. I'm still fascinated by technology. The OnPoint stuff that was described earlier is neat stuff. I think be curious about a space that's just dying for innovation. And I think the opportunities abound.
And then maybe in the last couple of minutes we have, we can touch on international. You're taking what seems to be a little more disciplined of an approach in terms of expanding internationally and what you've characterized as going narrow and deep within the international territories you've chosen to enter. Maybe if you could speak a little bit about the market opportunity that exists in New Zealand and Australia. And I think you're also positioning to enter Japan later this year. If you could just give a little overview of your plans, that would be great.
Yeah. If you look at the international landscape, I think there's certain markets that would buy into kind of the thesis of our procedural approach. Clearly, Australia is a place that does. Again, we entered the market, I think, a year ago or something to that effect. We love that market. It's great surgeons. There's a lot of relationships with surgeons here in the States. So it's a very straightforward market as you would expect. I think Japan is just another great market. I think Japan's yearning for a company like ours to ultimately disrupt that landscape. So we'll be in Japan toward the fourth quarter of this year. So we're super excited. We feel like there's a great opportunity to distinguish ourselves and to earn people's business. It's a good-paying country.
As you start to think to yourself, "Gosh, are these countries where I'm engaged that there's an opportunity for expansive growth and profitable growth?" We believe there is, so.
That's great. Well, I think we'll end it there. Thank you so much, Pat, for your time.
Thanks.