All right, thank you very much for coming out for the presentation today. My name is Randy Mills. I am the President and Chief Executive Officer of Elutia, and it's my great honor to be here with you today. We're a publicly traded company, so starting off a forward-looking statement, which is absolutely my favorite slide in the whole deck. Let's jump right into it. Our mission at Elutia: humanizing medicine so that patients can thrive without compromise. This is why we exist as an organization. What does it mean? Humanizing medicine means to us some very simple things. One, it means that we believe that biologic implants, natural biologic materials used in implants, are better than metals and synthetics. Second, we believe that adding active pharmaceutical agents can actually make biological implants much better.
Third, we believe that this concept of humanizing medicine means that patients are at the center of absolutely everything we do. That is not just the right thing to do, but that is actually the right thing to do for the business. That is our mission, and I will sort of explain it in very practical terms as we go through this presentation today. At Elutia, we are redefining the $60 billion biomaterials market with the drug-eluting biologic. I will tell you a little bit about why maybe you would care about this. First is we have just gotten approval of our first game-changing drug-eluting biologic. It is a product called EluPro, and it is used as an envelope, a protecting envelope around implantable pacemakers and defibrillators.
Second, the market that we're going into, a $600 million market, has absolutely fantastic market dynamics, and we'll go through that. We've picked up really the best in class distribution partner for this, Boston Scientific, as our distribution partner. Behind this, we have a very robust clinical stage pipeline. Lastly, we're a group of people that has been here before, and sort of jump right into that. Kevin Rakin and I founded the company about 10 years ago. Before that, Kevin and I met in the, we were in the regenerative medicine space as CEOs. There weren't very many commercially successful CEOs back at that time. He was the CEO of a company called Advanced BioHealing, which he developed and ultimately sold to Shire for about $750 million. I was a co-founder of RTI Surgical, which got sold to private equity for $490 million.
I was also the CEO, took Osiris Therapeutics public. That ultimately got sold to, I'm sorry, not Shire. That got sold to Smith & Nephew for $660 million. We brought with us a group of people that we've worked with for some 20 years. It's a group of people that know what they're doing and know how to make commercially successful enterprises. What do we do in high-level terms? We take a natural engineered biologic matrix that has regenerative capacities, can regenerate into a patient's own tissue when implanted, and we add to it a pharmaceutical payload. This pharmaceutical payload could be anything. It could be on a simple platform. We use things like antibiotics like rifampin and minocycline, but we could put just about anything onto this.
We put these two things together and create the drug eluting biomatrix. When you do that, it has these really strong pharmaceutical properties as antibiotic activities, but it maintains the structural integrity that's needed for an implant, but it doesn't have any of the foreign body response. Instead, it regenerates into the patient's own natural healthy tissue over time. That makes for some pretty significant advantages, clinically. This is our first product. This is our first product. We just got it approved. EluPro, it is an envelope that delivers rifampin and minocycline, goes around it, it envelops the pacemaker or an internal defibrillator, and it prevents things like infection and migration. I'll give you an example. This isn't a theoretical problem.
People get a pacemaker for a lot of different reasons, but usually it's something like second or third degree heart block, or they have an arrhythmia. That's a real problem. Pacemaker gets implanted 7-11% of the time. That pacemaker will develop a complication, usually one of these three types of complications. The first is migration. Pacemaker will literally, it's a heavy kind of thing. It has some mass. It'll start migrating down the chest wall. You can see in this picture, that's what that looks like. That pacemaker wasn't implanted into the patient's bladder. It migrated down to that level. When that happens, the pacemaker pulls on its leads. If it pulls on the leads and dislodges those leads, that pacemaker becomes absolutely useless, right? It doesn't actually require a failure of the pacemaker.
Just simply migration will lead to failure of that device. Second thing, a pacemaker in and of itself is a foreign body. It's a big chunk of metal, and your body doesn't know any difference between a pacemaker or a splinter. A lot of times a pacemaker will actually, the body will actually try to expel that pacemaker, and you can see it will literally erode through the patient's own chest wall. Sometimes patients will come in and they'll actually have their pacemaker dangling outside their body. The third, and oftentimes scariest for electrophysiologists, is infection. These patients will frequently develop infections. Many patients that have pacemakers are at high risk for infections because they have other comorbidities or high risk factors such as increased body mass, smoking, type one diabetes, and the like.
This is complications. Again, these aren't happening, you know, every once in a while. These are happening 7-11% of the time. And when we think about it from a health economic standpoint, what happens, you're gonna bring the patient back if it's an infection. You're talking about a $50,000-$100,000 ICU stay, stay in the hospital in order to get this changed, out and to get this problem fixed. People don't get elective pacemakers, right? This is something that has to be, seriously addressed. That's why, that's why the, the pacemaker envelope, was, was developed in, in the first place as an insurance policy against these. When we look at this market, that we're going into, I said we had really fantastic market dynamics. Why? There's 600,000 of these pacemakers implanted, every, year.
There's only one other antibiotic eluting envelope on the market. That product was introduced about 10 years ago by our friends over at Medtronic. Actually, they bought the technology, acquired a small little company for about $200 million. They've turned it into quite a business. They put about $200 million into this antibiotic eluting envelope, primarily around their pacemakers. They also put them on other players. As you look at the pacemaker space, there's 600,000 pacemakers implanted. Whoops. 600,000 pacemakers implanted. Medtronic does about 40% of those, but Boston Scientific, Abbott, and Biotronik make up the other 60%. Medtronic sells a pacemaker and the only other envelope on the market. Boston Scientific, Abbott, and Biotronik, they don't have an envelope.
All they make is a pacemaker. Why that's important is when you have an electrophysiologist that wants to use an antibiotic eluting envelope, I can assure you that the one thing that Boston Scientific and Abbott can agree on is that they don't want a Medtronic envelope around their pacemaker. 'Cause ultimately Medtronic's looking to try to steal their pacemaker business from out from underneath them. That sets us up as the only other entrance into this $600 million market with definitively a better product and 60% of the market behind us, and supporting us. We actually went out and did a market survey. As I said, we would have favorable market dynamics if our product was just a generic equivalent, but we actually did a market survey of TYRX users. That's our competitor.
We asked them, we showed them EluPro, and we asked them if they would consider using it. Eighty-eight percent of TYRX users said they would switch some or all of their business to EluPro. The reason for it is, not just is it a biologic envelope, which they seem to like better than the synthetic mesh, but it's also the TYRX envelope is a very rough envelope. It actually has sort of like a consistency of kind of like a screen door. You can imagine, implanting something like that under a patient's skin actually can lead to pain. It can make it very difficult to implant. It has very rough edges. It gets caught up on tissue, causes all kinds of issues. Some of the comments, it's got a very rough surface.
It doesn't slide easily into the pocket or, my favorite of these reminds me of the no-slip coating you sometimes see on garage floors. Not really the type of description that you would wanna have for your implantable medical device. As I said, we just got approval for this product. We did our pilot launch in the fourth quarter, and we've really developed some great initial traction with this. Our emphasis is around getting through VAC approvals and getting initial usage of it. Our same center sales, this is where we've been selling the non-antibiotic version of this product into those centers. Those same center sales are up 65% since the introduction of this product.
EluPro is being used to protect all four major brands, including Medtronic. We like that. We actually are starting to get pickup into the neurostimulator space as well. We are really, really happy with our initial traction with this. EluPro, the launch and the commercial success of EluPro is completely governed by our ability to get on the market, or I'm sorry, get on the shelf at the hospital. To do this, we need to go through VAC approval or the Value Analysis Committee approval. That is sort of our gate limiting step. Once we are on the shelf at these hospitals, the product is very consistently used and it's used at a very high rate. We are now active in over 100 institutions, actually well over 100.
You can see our VAC growth trajectory clicking along and around 10-12 VAC approvals a month now. We also have been able to pick up GPO coverage. We have seven major GPOs that have picked up the product, including Premier and S3P. We have other GPO contracts that are currently in negotiation. All of that we were able to do on our own. This month we added our distribution agreement with Boston Scientific. Now we have this enormous partner out there helping us with all of the work that I just mentioned that we're doing. Basically the way this partnership works is we have 12 territory managers and 35 independent reps that are out there mainly prioritizing VAC approval, navigating the hospital system.
Boston Scientific brings 900 reps to that and case coverage in essentially every single hospital. What they're helping us do is break into the hospitals. Once in the hospitals, their reps are directly compensated every single time EluPro is put on, put on a pacemaker in that hospital. That's really supercharging our effort. That is EluPro. It is for us an enormous opportunity. We think this is a product that will have peak sales of greater than $200 million for us at a gross margin in excess of 70% with, you know, only one other competitor out there. The other competitor makes a pacemaker, and Boston, Abbott, and Biotronik really don't want anything to do with it on their cans. Really favorable dynamics. Behind that, we have our other pipeline.
This is SimplerM. SimplerM is the same concept that we have for the antibiotic eluting envelope, but in this one we're using it in breast reconstruction. Here we're talking about women who have received a diagnosis of breast cancer that require a mastectomy. There are about 150,000 mastectomies performed in the United States each year. Once you have a mastectomy, there isn't enough tissue remaining in order to hold the implant in place. You need some sort of biologic material there to hold it in place. That's what we use SimplerM for. We currently have about $12 million in sales in SimplerM. It's growing at about a 12% rate. It's not bad for us, but that's certainly what we would call moderate growth.
We have two different ways that we distribute that product. We have our own proprietary network of distributors. We also have a partnership with Sientra, which was recently acquired by Tiger. They actually make a breast implant that's used in reconstruction. The reason that we have SimpliDerm isn't just to leave it here. It's because we're doing with SimpliDerm what we did with EluPro. That is, we're taking a good biologic material that has good surgical utility and we're adding to it the power of drug delivery. In this case, the drugs rifampin and minocycline. Why would we do that? In breast reconstruction, we're talking about a market, or an indication where post-operative infection rates are 15%-22%. You think about it in pacemaker, you're looking at a post-operative infection rate of something like 4%-6%.
When a woman's going through a reconstruction from a mastectomy, they face a 15-22% post-operative infection rate. It has been that way for the last 25 years and it hasn't moved. We actually think that what we're doing with this technology, this drug delivery technology onto this surgical mesh that's already there, will actually be able to go and drop that infection rate down to just about nothing. Now, if you think about the impact of that, right? It's not just that they don't have to go through, you know, a second surgical procedure and all of those other things, but when a woman's going through a mastectomy, right, there's a whole lot of other things that need to happen, including chemotherapy, and chest wall irradiation and actually dealing with the underlying cancer.
This is a really, really significant thing that we're trying to accomplish here. This is our second generation technology. We're really, really proud of this. We think it's gonna be, we think it's gonna be even a better success, a greater success than EluPro. Ultimately, we think this could be a billion dollar product for us. Moving forward, what are we trying to do? One most important thing for us is drive top line growth of EluPro. How are we going to do that? We need to continue to get it on the shelf in the hospitals by navigating the VAC process and the GPO process. Obviously, leveraging our partnership with Boston Scientific.
We have that 900 plus people commercial team out there helping us navigate the VAC process and sell into these different accounts. We need to be doing that. We're actually running into an issue where we need to start increasing production capacity. We're okay this year, but the growth rate that we're on is certainly keeping our manufacturing people scrambling. We've already made the operational investments in order to expand our production capacity. That picture I showed earlier is actually of our brand new Gaithersburg facility. Not only will that give us the ability to create higher volumes of EluPro, we'll also very significantly lower our cost of goods and get us to that 70-75% gross margin that we're looking for. The last thing is continue to expand our commercial stage pipeline with our surgical mesh.
It's a pretty big week for us. If you were thinking about leaving Las Vegas and going somewhere, we would welcome you to join us back in, in my hometown of San Diego. Heart Rhythm Society, which is our big electrophysiology conference of the year, is taking place on Friday, Saturday, and Sunday. We would love to see you if you get a chance, come by the booth. We are easy to find. We are sandwiched right between Medtronic's booth and Boston Scientific's booth. That should be all kinds of fun. If you're interested in learning more about our underlying technology and our scientific platform, we have a trending issued fireside chat that's coming up with our Chief Scientific Officer, Michelle Williams. That will be next Tuesday on the 29th, and you can look at that on our website.
There is a link to it there and hear more about the incredible work that she's doing there. That is what we have going on. It's been my pleasure speaking with you guys today. We have a few minutes for questions. If you have any, I'd be glad to take them. Yeah, please. For EluPro? Yeah. With, we are, as a formal company, we don't give guidance, but I would say from an expectation standpoint, we are very, very constrained by those VAC approvals, right? Right now we're adding about 10-12 new accounts every month, and it's been clicking along that way. That will put us in the roughly 300 accounts by the end of the year.
If you just sort of look at how that's doing, if that all, if all that works out, you know, we would, we would like to see a, you know, $4 million-5 million quarter for BioEnvelope in the final quarter and set us up for a much bigger 2026. Other questions? Cool. Thank you so much for coming out. I appreciate it.