Sintx Technologies(US:SINT)2021-03-22 13:00Medical Applications and Innovations - SINTX Technologies focuses on silicon nitride for medical implants, with over 35,000 spinal implants successfully implanted, demonstrating an excellent safety record[30]. - The company has received regulatory approvals for its silicon nitride spine implant products, including 510(k) clearance in the U.S. and CE mark in Europe[30]. - SINTX is the only FDA-registered and ISO 13485:2016 certified silicon nitride medical device manufacturer globally, emphasizing its unique market position[40]. - The silicon nitride material promotes bone growth, with studies showing it has up to three times the osteointegration force compared to PEEK and nearly two times that of titanium[41]. - SINTX's silicon nitride exhibits inherent antibacterial properties, with live bacteria counts being 8 to 30 times lower compared to PEEK and up to 8 times lower than titanium[42]. - The company is targeting OEM and private label partnerships to accelerate the adoption of silicon nitride in various medical fields, including hip and knee replacements[31]. - SINTX has published over 130 peer-reviewed studies supporting the safety and efficacy of its silicon nitride products[44]. - New bone formation around silicon nitride was approximately 69% in the absence of bacteria, compared to 36% for titanium and 24% for PEEK[48]. - In the presence of bacteria, new bone growth for silicon nitride was 41%, while titanium and PEEK showed 26% and 21% respectively[48]. - The force required to separate silicon nitride from surrounding bone was three times that of PEEK and nearly two times that of titanium in the absence of bacteria[48]. - The average burst test strength for silicon nitride femoral heads was 75 kN, representing a 15% improvement over BIOLOX delta at 65 kN[54]. - Silicon nitride exhibited approximately half the wear rate compared to cobalt chrome-on-cross-linked polyethylene articulating hip components[59]. - The company is actively developing a silicon nitride-based dental implant system, indicating a strategic expansion into the dental market[83]. - The company has a 10-year exclusive right to manufacture interbody spinal fusion devices for CTL Amedica, highlighting its competitive position in the spinal fusion market[74]. - The company has developed a femoral head made from solid silicon nitride for total hip replacement, expected to outperform traditional materials in wear performance and strength[93]. - A femoral condyle design made from solid silicon nitride has been created for knee implants, with plans for biomechanical testing and FDA submission following femoral head clearance[94]. - The company is exploring opportunities in cranial-maxillofacial, extremities, sports medicine, and trauma markets using its silicon nitride technology platform[95]. - The company is exploring new product candidates for total hip and knee replacements, dental implants, and personal protective equipment[175]. Non-Medical Applications - The company has expanded its focus to non-medical applications, including partnerships for face masks that incorporate silicon nitride to enhance antiviral properties[34]. - Silicon nitride inactivated the SARS-CoV-2 virus within one minute after exposure, indicating potential for reducing viral spread[58]. - The company has entered into a joint development agreement with O2 DESIGN to develop face masks with antiviral properties, expecting royalties and milestone payments from sales[82]. - The company has made its first shipments of non-medical products in 2020 and anticipates transitioning prototype orders into regular production[71]. - The company has entered into an exclusive licensing agreement with O2 Design for face masks incorporating silicon nitride, with potential royalties and milestone payments[115]. Manufacturing and Facilities - The company operates a 30,000 square foot facility in Salt Lake City, Utah, which is vertically integrated for silicon nitride medical device manufacturing[36]. - The company operates an 18,000 square foot FDA-compliant manufacturing facility in Salt Lake City, Utah, certified under ISO 13485:2016 for medical devices[71]. - The company produces silicon nitride in four distinct forms, allowing for various applications in medical devices[65]. - The porous silicon nitride structure is engineered to mimic cancellous bone, promoting bone in-growth and attachment[67]. - The manufacturing process for silicon nitride products is complex, requiring specialized knowledge and equipment, and any delays could adversely impact operations[171]. Financial Performance and Market Challenges - The company incurred net losses of $7.0 million and $4.8 million for the years ended December 31, 2020, and 2019, respectively, with an accumulated deficit of $241.1 million as of December 31, 2020[158]. - The company reported cash and cash equivalents of $25.4 million as of December 31, 2020, indicating limited liquidity and a need for substantial future capital to continue product development and commercialization efforts[191]. - The company relies on CTL for sales of spinal fusion products, which account for all its product revenue, and has a 10-year manufacturing agreement with CTL[169]. - The company has limited market acceptance of its silicon nitride-based products and must increase market awareness to succeed[161]. - The commercial success of the company's products depends on adequate reimbursement from third-party payers for procedures utilizing its products[179]. - The company anticipates that hospitals will obtain coverage for procedures using its products, but reimbursement levels may change over time, affecting financial performance[148]. - Third-party payors may deny reimbursement if procedures are deemed not medically necessary or not cost-effective, impacting product acceptance[149]. - The healthcare industry is experiencing a trend toward cost containment, with government and private payers seeking to control healthcare costs, which may affect the payment levels for procedures using the company's products[182]. - The company faces uncertainty in market acceptance due to varying reimbursement policies from private and governmental payers, which could materially adversely affect its business[180]. Regulatory Environment - Government regulations extensively control the development and marketing of medical devices, which could affect the company's product launch[122]. - Medical devices in the U.S. require either 510(k) clearance or PMA approval before marketing, with the FDA aiming to review 510(k) submissions within 90 days[123]. - The PMA process is more complex and can take several years, with the FDA having 45 days to determine if a PMA is complete and a decision typically issued within 180 days[126]. - The FDA may require a limited one to two-year clinical trial for the clearance of new devices, impacting the timeline for commercialization[93]. - The FDA's 510(k) clearance process typically takes one to six months, but the premarket approval (PMA) process can take two to three years or longer, impacting the timeline for product commercialization[198]. - The company has obtained FDA clearance for its spinal fusion products and intends to seek further FDA approvals through the 510(k) or PMA process[201]. - Clinical trials are expected to be required for regulatory approval of some product candidates, which may proceed more slowly than anticipated due to the company's limited experience in conducting such trials[203]. - The company may face significant delays in clinical trials due to various factors, including financing issues, regulatory approvals, and patient enrollment challenges[205]. - Delays in clinical trials could lead to increased development costs and may allow competitors to introduce products to the market first, impacting the commercial viability of the company's product candidates[206]. - The European Union has a unified regulatory framework for medical devices, allowing for CE Marking which facilitates market access across member states[132]. - The CE Mark is mandatory for medical devices sold in the EU, indicating compliance with applicable directives and standards[132]. Intellectual Property and Competition - The company holds thirteen issued U.S. patents and multiple pending applications, with core patents expiring between 2022 and 2036[102]. - The company relies on a combination of patents, trade secrets, and proprietary information to protect its intellectual property rights[100]. - The company has no patent protection for the composition of matter or manufacturing process of solid silicon nitride, allowing competitors to create similar formulations[224]. - The company faces potential challenges in enforcing its intellectual property rights, which may divert management's attention and resources[222]. - There is a risk of costly intellectual property litigation that could impact the company's ability to market its products and reduce profit margins[225]. - Competitors may successfully challenge and invalidate the company's issued patents, limiting its market capabilities[220]. - The likelihood of patent infringement claims increases as the orthopedic market expands and the company gains visibility[225]. - If found to infringe on patents, the company could face substantial damages and may be required to redesign products or obtain licenses[226]. - The company has pending patent applications that may not result in issued patents, impacting its competitive position[224]. - The enforcement of intellectual property rights may be complicated by varying international laws, potentially weakening protection outside the U.S.[222]. - The main competitors in the orthopedic implant market include Medtronic, DePuy Synthes, and Stryker, which have greater resources and capabilities[111]. Management and Operational Risks - The company had 32 employees as of March 1, 2021, and believes that attracting and retaining qualified personnel is crucial for success[154]. - The company is dependent on its senior management and engineering teams, and any loss of key personnel could have a material adverse effect on its business[188]. - Prolonged negative economic conditions could harm the company's financial position and its ability to maintain or grow operations[185]. - The company may face challenges in negotiating favorable purchase contracts with group purchasing organizations, impacting sales success[181]. - Legislative and regulatory changes under healthcare reform could adversely affect the company's business and financial results, creating uncertainty in future operations[184]. - The company relies on a limited number of third-party suppliers for key raw materials, and any loss of these suppliers could harm its business[174]. - The company is dependent on O2 DESIGN for the commercialization of face masks and filters incorporating silicon nitride technology, with a two-year exclusive patent license agreement in place[170]. Impact of COVID-19 - The COVID-19 pandemic has materially impacted the company's sales and cash flows in fiscal 2021, with ongoing monitoring of the situation[156]. - Future outbreaks of contagious diseases could adversely affect the company's ability to raise funds and engage with third parties for manufacturing and development[157].