Shoulder Innovations (NYSE:SI) 2025 Conference Transcript

Summary of Shoulder Innovations Conference Call Company Overview - Company: Shoulder Innovations (NYSE: SI) - Market: Global arthroplasty market for shoulder arthroplasty valued at $2.8 billion, with the company covering approximately 85% of this market [1][4] - Technology: Known for Inset Glenoid technology, addressing loosening issues in anatomic shoulder arthroplasty, and an AI-enabled preoperative planning platform [1][2] Core Market Insights - Market Growth: The shoulder arthroplasty market is growing at about 10% annually, with a significant shift towards outpatient settings, particularly ambulatory surgery centers (ASCs) [5][22] - Procedure Volume: Approximately 250,000 shoulder arthroplasty procedures occur annually in the U.S., with a notable transition from hospitals to ASCs due to new payment authorizations from CMS [5][22] - Reverse Shoulder Arthroplasty: Represents about 70% of procedures globally, with a growing preference for this method due to its mechanical stability in cases of rotator cuff deficiencies [4][12] Product Innovations - InSet Glenoid Technology: Demonstrated an 87% reduction in "rocking horse motion," leading to 100% implant survivorship at two to nine-year follow-ups, compared to a 40% failure rate at five years for traditional methods [10][11] - ProVoyance Preoperative Planning: AI-driven platform allowing surgeons to plan surgeries virtually, enhancing surgical outcomes and efficiency [17][18] - New Product Releases: Introduction of i70, i135, and i185 products aimed at expanding market coverage and addressing metal hypersensitivity issues [23][24][29] Competitive Landscape - Market Share: Major competitors include Stryker, Zimmer Biomet, DJO, and Arthrex, which collectively hold about 80% of the U.S. market [20] - Differentiation Strategy: Focus on a simplified two-tray system for ASCs, contrasting with competitors' 8-10 tray systems, which enhances logistical efficiency [20][21] Financial Performance - Revenue Growth: Achieved just under $42 million in revenue with a 55% CAGR, and a 58% growth in the third quarter [26] - Market Positioning: Positioned to capture a growing share of the market as more procedures transition to ASCs, with expectations of reaching 50% of procedures in this setting [22] Future Outlook - Expansion Plans: Plans to introduce products for fracture and revision indications, with regulatory processes nearing completion for new offerings [28][29] - Adjacent Markets: Exploring opportunities in sports medicine and trauma, leveraging existing surgeon relationships and data-driven insights [24][25] Key Challenges and Considerations - Surgical Complications: Addressing postoperative complications related to subscapularis tendon failures, which have a 15-25% failure rate [12] - Technological Integration: The potential impact of robotics in shoulder surgery, particularly in outpatient settings, remains to be fully realized [32][33] This summary encapsulates the key points discussed during the conference call, highlighting the company's strategic positioning, market dynamics, product innovations, and future growth prospects.