I'm Anthony Vendetti. I'm the Director of Research at Maxim Group. Today is day two of our Maxim Virtual Healthcare Conference. This is our fifth annual conference. It runs for three days, so like I said, today is day two. It concludes tomorrow. With us today, we have the CEO, President and CEO of Tenon Medical. Symbol is T-N-O-N. We have a buy rating and a twelve-month price target of $4 on Tenon. The protocol or format today is gonna be a five-minute or so company overview/update, and then we'll open it up to questions from the audience. With that, let me turn it over to Tenon's President and CEO, Steve Foster. Steve?
Thanks, Anthony, and thank you to you and Maxim for putting all this together and giving us a chance to, you know, talk through what's going on at Tenon Medical. Look, Tenon is an early-stage medical device organization focused on the sacroiliac joint. What's interesting about the sacroiliac joint, I've been in spine many, many years, is it really is a bit of an anatomical blind spot, if you will. Really wasn't paid much attention until 2010, 2011 timeframe, when a couple of companies started doing work in the space, and bringing to the forefront the issue of SI disruption and sacroiliitis, right? The SI joint's down in your pelvis. It's a joint between the sacrum and the ilium, a synovial joint, that's really designed to not move very much.
It's not like a shoulder or an elbow or anything like that. It's supposed to be very rigid. It, in essence, takes loads out of your spine and transitions them down into your lower extremities, so we can sit up straight, stand up straight, things of those natures. And so it's supposed to be pretty rigid. If degenerative conditions happen, a little bit of trauma, other disruptions, etc, and that joint starts moving too much, it's extraordinarily painful for the patient. And this happens in a number of different scenarios, frankly, most commonly with women postpartum. As you can imagine, a lot of hormonal changes for a woman as they prepare to deliver, those changes to loosen the pelvis for delivery, etc . If things don't come back to a normal state, women can experience a lot of SI issues.
To be clear, right, in many instances, these issues can be resolved with conservative care. You know, combination of use of physical therapy, narcotics, even therapeutic injections of medicine to help the joint settle down. It can get inflamed and what have you. The rate of getting this better in conservative care is relatively high. However, there are patients that don't respond to that conservative care, and that's where a company like Tenon comes in. We have a surgical procedure, a very unique approach, an implant designed to go down and lock the joint in place, sort of immobilize it, if you will, and set it up to heal and fuse, so the patient gets a long-term solution to their problem. How does that apply to Tenon, right?
Again, we're early stage, and the hardest part of any medical device play are those early stages when physicians, payers, hospitals, no one's ever heard of you before, right? And we're grinding through those early stages and hitting some really important milestones, right? Of course, you had to invent the technology and have a quality system and build sets and get things cooking, work with your physician advisors, etc , get early surgeries done. We're through all of that now. As a matter of fact, we're approaching 800 procedures completed here, primarily in the U.S., and what we're seeing now is that the technology's delivering on its promises.
In fact, we had a publication of an interim analysis of clinical research, that is showing that our technology's hitting primary endpoints in a statistically significant way, and the endpoints are about pain reduction, right? We're trying to get that thing to hold still, so it doesn't hurt the patient anymore, and set it up to heal, so they have a long-term solution to the problem, and of course, we're trying to do so in a safe manner. That is extraordinarily important. We all know Hippocratic Oath of do no harm first.
These approaches have to be safe, and we feel like we're well on our way to proving not only are these technologies immobilizing the joint effectively, but now at 12 months, we send the patients back who were in the study enrollment for a CT scan, and we're seeing beautiful bridging bone fusion, locking that joint down, taking the motion out of it. These are very compelling things, and as you can imagine, when you sit down with a physician, they wanna know about your data. They wanna see that the technology you're talking to them about is proven as a safe and effective way to treat their patients, so in very simple terms, we're emerging out of those early phases where no one has any idea who you are. Now, we're starting to make some noise in this marketplace.
We think we have a better way of getting the job done than a lot of our competitors, and we're very excited about, you know, the coming quarters and years as we get out there and train and expose the community to this technology.
That's a great, that's a great overview, Steve. Thank, thank you so much for that. You know, you stated that you've completed now almost 800 procedures. What was the, shall we say, standard of care- before that? And what are the competitors that you right now see in the market? What are the alternatives to the Catamaran System, right? To SI Joint Fusion, has a couple of players out there using different technologies, right?
Mm-hmm. Indeed.
So maybe just give us an overview of that.
Indeed. So, but prior to 2010 time window, the only real solution out there for SI disruption was an open procedure. And candidly, the benefits didn't outweigh the risks and the morbidity associated with this open procedure. So along came, as is typical in medical devices, people started getting creative and innovative and bringing a minimally invasive approach to the issue and the problem. Now, all of a sudden, those trade-offs started to make sense. "Hey, we can do things through a relatively small incision, etc ." The early technologies that came out utilized a direct lateral approach, so, kinda coming in the side of your gluteus maximus, your butt cheek, right? And coming across, if you will, the joint, and putting multiple implants across the joint to immobilize the SI joint.
There was some success found, right? There's no question about it. There was some success found in a minimally invasive way, taking the motion out of the joint. The problem is, as we all know from just basic AO principles, that putting a piece of hardware across a joint that's moving, the body eventually shakes that implant, breaks it down, sometimes even shears it and breaks it. You've gotta facilitate healing and fusion, and this is done all up and down the spine. Physicians don't just put hardware in the spine. Those are all motion segments. They're all moving, right? They do the preparation work, the grafting work, etc , to heal and fuse, so the body is assisted by the implants and the surgical technique to heal and take that motion away.
We're applying those principles to the SI joint, right? Rather than just shooting hardware across it, we're going straight down to the joint in a different approach. It's Inferior-Posterior, is what we refer to it as, and if you reach around and feel the base of your spine, you can actually feel those bones, if you will, right at the base in the top of your sacrum, etc . We're not going through a big muscle structure. We're going directly down to the joint, and what's more important is we're prepping the joint. In other words, in really simple terms, if you break your leg, Anthony, there's a defect there, right? That needs to heal, and your body knows it.
Starts sending cells, saying, "We need to heal." And we know if we keep that thing aligned in a cast or what have you, that you're gonna heal up as good as new. Well, this SI joint doesn't have a defect. It needs to be created. We have to prep the joint, we have to scrape it and disrupt it so the body knows, "Hey, there's some healing required here." Then, we use bone graft to make sure that when that, those healing cells come, that there's a scaffold and, and what have you there for bone to grow across the joint, etc . And of course, what the implant does is hold it all still. It's kinda like the cast on your broken leg, if you will.
We have all three components that's set up for healing. That's why that CT scan in our study is so important. It's showing at 12 months, this joint's healed up now, and it's not gonna be moving anymore. It's locked and loaded, and frankly, the implant now is just along for the ride 'cause the body has healed, and the implant has facilitated that healing. The difference, and really maybe this is the core message, is if you look at medical device companies, there's always innovators early, and as things develop, sometimes better ideas come along, better approaches, better ways to get the job done. That's Tenon Medical. We have a better way of getting this job done. We believe it's a safer approach to the anatomy. There are some real issues with those lateral approaches.
We believe very strongly that this is going to prove to be a better way of getting the job done, and as our clinical research comes out, we believe that'll be reinforced.
Yeah. No, certainly, certainly, sounds compelling and, b ut I wanna understand, you know, because you did a good job differentiating, you know, putting in these rods versus putting in a scaffolding system that allows the healing to occur around it, and the bone grafts and stuff. Is there anything that causes the osteoblasts or to create or the osteocytes to create that, that healing process around the scaffolding system? Is there anything spurring that?
You know, some, you know, you hear about PRP, plasma-rich protein, right? So to try to increase or accelerate the healing, is there anything that's being done in addition to the scaffolding- t hat's going to accelerate or cause the healing to, you know, occur faster?
And it's a great question. So really, what you're talking about is, look, if the implant's holding things still, what osteoinductive thing is happening that helps that bone growth to actually occur, right? And so in the Tenon procedure, we call the technology Catamaran, and if I showed you the implant, you'd know exactly why we call it Catamaran. It has two kind of barrel pontoons, if you will. And what we do is we drill a pilot hole in the sacrum and again in the ilium, and we collect the bone graft right out of the flutes of that drill bit, so the patient's own bone. They refer to it as autologous bone.
Right.
The bottom line is, it's the gold standard of bone healing, right? There's nothing better than using the patient's own bone.
Sure.
We can bulk it up with the DBMs that are out there and other bone graft extenders, etc, if we need a little more volume. But what we're really doing is setting the patient's own bone up within this implant. And as we insert the implant, the implant does the defect creation through the longitudinal axis of the joint. So if you imagine this kind of long, squiggly joint, we're cutting straight down the longitudinal axis of the joint, disrupting the joint. That causes all that cellular healing stuff to happen. And then there's patient's own bone, they're built to, you know, packed inside this implant, so you get good, clean healing across the joint. And again, it's wonderful to talk about all those things. Conceptually, it makes a lot of sense. Nothing's better than having controlled data that shows it's actually happening.
And now we're at that stage, right, where we can show that very clearly. It becomes very compelling for, you know, the physician community as they look at what we're doing.
Yeah, and I've spoken to some of the orthopedic surgeons, and they say that this, you know, is a better way to do it. So, maybe talk about now how you're, you know, attracting new physicians to the market. Is it going to industry conferences, orthopedic conferences, getting the KOLs to speak? And then, if you can, a re there any, you know, interim results that you could talk about, or that are being presented soon, from your trials? Maybe, you know, give us a timeline or a path towards those goals.
Yeah, sure. All of those things are happening, right? We're trying to get the word out and be compelling. And when I say be compelling, look, our customers are exceptionally busy people. They run their own practices in most situations.
Right
Etc. They're incredibly busy. If you're asking them to carve out some of that time they have, to take a look at a new technology, there has to be a compelling reason for them to do so, right? So now, what do we have? Well, we have a unique approach, a unique implant, and data to back it up that says, "Hey, you know what? This is, this thing's delivering. You should take a look at it.
Mm-hmm
If you wanna add it to your armamentarium to care for your patients." That's really our mission right now. We've done extensive work on a synthetic training model, which is fantastic because the, you know, cadaveric material, etc, can be highly variable. It's very expensive, it's hard to get, all those things are real. We created this synthetic model that allows the physician to image the, you know, sort of the pelvis, if you will, and practice repeatedly the approach, use of the instrumentation, sequence of the instrumentation, and what have you. And the great thing about it is, we tell 'em, "Hey, look, we can come in. All we need is a fluoro and a table, and we're off and running," right?
We can do it at the end of your clinic, and it'll take us 45 minutes." They're really efficient for them. They don't have to jump on an airplane, travel somewhere, go to a lab, or any of those kinds of things. So we're trying to streamline that whole process and say, "Hey, look, this is not a, you know, many, many hours thing for you. This is, give us an hour or so, and you'll get a full boat look at what we're doing, how we're doing it, why we're doing it, and so that's what we're doing right now is intensive communication. Yes, there'll be some podium presentations on the data as the data comes out, you know, at various regional and national society meetings and things of that nature.
I will tell you, the other thing you'll learn in this space is, I can make all kinds of noise as a company, make all kind of pretty brochures and what have you. When physicians talk to other physicians, that's the most powerful thing in medicine. And so, the folks that are using our technology are communicating with their colleagues, and candidly, those are the most powerful referrals that we get.
Okay, great. And is there anything other than going to these conferences and getting the referrals from the current physicians, is there anything you're doing from a sales and marketing standpoint, now that you've completed 800 procedures, to get the word out even further?
Yeah, indeed. Look, there's no doubt about it. The investments going into this organization right now are almost exclusively focused on finishing the clinical trial and getting that data all cooked and published and what have you, and commercialization activities, right? So, and that involves a number of things. That's not just hiring sales reps, right? That's contracting and access, that's training resources, that's feet on the street, covering cases, things of that nature, right? So no doubt about it, our, you know, that we're a relatively small organization. As we build and scale, it'll be downstream commercial, you know, customer interface activity. The other thing I'll point out real quickly is we just, and if you looked at any of our press, you would see, we have done now early cases with a new platform we're calling SE.
SE is simply put, a miniaturized version of our existing Catamaran. As you can imagine, there's lots of different variability in anatomy, right? Some people are big, some people are small, etc. We've had a number of requests from customers saying, "Hey, look, a smaller profile could be useful in circumstances, etc." So we have rebuilt, redesigned, etc, some of the principles of our base technology, and we've just completed some early surgeries with the SI SE technology, and really like what we see, we like what we're hearing. You know, the pelvis is known for a lot of what they refer to as dysmorphic anatomy, just unusual anatomy, etc.
So your technology has to be flexible enough to deal with those anomalies, to recognize it, see it, and then deal with it. This is just another opportunity for us, to provide for some of that variability. So, very excited about that as well.
That's great, that's great. So we have about four or five more minutes. Is there anything, you know, on the R&D front that you're doing, either to continue to enhance the system? Maybe there's not. I mean, the system sounds pretty great the way it is right now, but, o r are there other R&D efforts that are going on that are beyond the SI joint?
Yeah. Well, so let's stay on the SI joint for just a second.
Sure.
We're thrilled about this technology, and it's never good enough. This is medical device stuff, right?
Right.
We keep grinding. So what are we looking at? Well, right now, this is a titanium implant. We'll look at materials, right? 'Cause there's some really unique materials out there, porous technologies, things of that nature, that enhance bony ingrowth and things of that nature. We'll look at materials. I talk about that, surgical technique, one of the important part is grafting. We don't have a graft technology in our offering right now. That needs to change.
Right.
So we'll continue to build. Look, I'm gonna work really hard to get in that operating room. I don't want anybody else selling stuff in there. I wanna sell all those things, right? So everything involved in that procedure, we wanna be a part of. We'll be looking at all of those components, right?
Right.
Outside of the SI joint, look, the world doesn't need another complex spine company. There's a bunch of them out there, right?
Right.
We believe, however, though, there's been a lack of focus on pelvic specific matters, and they're, of course, very married together with complex spine, right? For example, when the physicians do a long construct, they refer to it as when they fuse multiple levels of the lumbar or even up into the thoracic spine. Those are all motion segments. So you lock those things down and you fuse them, that load has to go somewhere, and guess where it goes, right?
Yes.
It goes right down into the base of the spine, and it goes into these SI joints. And so we believe there's a lot of opportunity to work with complex spine physicians, and to take a look at, "Hey, what's the impact of the SI joint? How can we help you ensure that you don't have a beautiful fusion all up and down the spine and a miserable patient because their SI joints are hurting them?
Right.
And so, a lot of work to do in that area as well.
Oh, no, it's exciting. It sounds like you have lots of things to look at on the R&D front, as well as, you know, get these studies published and continue to recruit physicians into the Tenon System. So.
Indeed. Those are fusion guys, right? They work really hard to get fusion all up and down the spine. You show them fusion data, you have their attention, so it's great.
Excellent. Is there anything else in the last minute or so that you'd like to leave investors with, Steve?
No, the last thing, look, you know, I'm an investor as well, and I always look at, is there innovation there? Is there cool stuff there? Are they solving a problem there? Hopefully, I've communicated that in this session. But the other part is the team, and I just really wanna tip my cap to the team. We've been through the tough part, where no one has any idea who you are, and you're just begging people to listen to you for five minutes kind of thing. Now, we're emerging out of that with proof of concept, the data, and things of that nature. Let me assure any investor who's listening to this, this is a team of really talented and dedicated people. I'm super proud of them, and we really look forward to moving this thing forward.
That's great, Steve. I think that was very informative. Appreciate the time. I'm sure the investors do as well. So thank you so much. We look forward to continuing to track your progress, and I'm sure we'll be speaking soon when the quarter results come out. So, thanks very much, Steve. Have a great rest of the day.
I enjoyed it. Thanks, Anthony.
All right. Thanks so much. Take care.