Partnership

Monogram is pleased to announce that it has entered into a binding term sheet with an undisclosed orthopedic medical technology company (the “Company”).

April 8, 2020
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Monogram is partnering to combine components of their existing implants already in the field with the 3D printed Monogram implants to release the next generation of orthopedic implants.

Strategy Refresher:

Let’s have a quick refresher of the problem Monogram is solving.  In the "Comparative Epidemiology of Revision Arthroplasty", researchers evaluated over 2.8 million knee replacements and 1.3 million hip replacements over a five year period and found that the failure rate over the study term (as defined by revision, not patient satisfaction) was 9.2% for knees and 14.8% for hips.  There are many causes of failure, and the causes vary considerably from joint to joint depending on the specific anatomical features of the joint, but what is certain is that the incidence of failure remains to high across the board.  Monogram believes that technology can be used to improve outcomes and mitigate risks, especially for active young patients.  While we have many opportunities to address current shortcomings, for example we see opportunities to improve knees, hips, ankles, shoulders and spine, Monogram believes the most attractive market to start with is knees.  

The knee market is very large (almost $10BN) and growing and patients remain unsatisfied (1 in 5 patients is not satisfied with their knee replacement).  By our analysis, over 90% of knee implants are cemented, which is not as suitable for active young patients.  We also believe that component loosening, especially of the tibial component, is related to unoptimized designs.  Finally, the complexity of the joint, especially as it relates to properly balancing the ligaments lends itself to surgical navigation and robotic execution.  Monogram will start by focussing on knees.

Our Implant Solution:
An implant has three components that reconstruct the joint: a femur on top, a tibia on the bottom, and an insert that simulates cartilage in between. One of Monogram’s key innovations on the patented knee implant is a new type of tibia - rather than rely on a highly invasive central keel that removes a lot of bone (which is bad for revisions as you can see here: https://bit.ly/tibial_failure), Monogram has designed an implant that has no keel and relies entirely on peripheral fixation. Initial testing with UNMC indicates that the Monogram design could be more stable and less invasive than the current standard.

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In summary, we believe we have an extremely compelling invention for the tibial component that we think would solve significant clinical problems and help drive the adoption of press-fit implants in knees, which are better than cemented knees for active young patients.

Why Partner:
So if you imagine our commercialization, no matter what Monogram needs a whole knee solution (femur, insert and tibia).  If we were going to build the whole knee from scratch we would need to design, develop and test a femur, an insert, and the locking mechanism for how the insert engages with the tibia.  Femurs are made of cobalt-chrome because they have to be super low friction - they also have very sophisticated curvatures and design interfaces to the inserts.  So Monogram would have had to go to an ISO 13485 certified factory and basically design and develop the femur and insert from scratch.  Do we think we could make improvements to the femur and insert?  Yes, certainly.  Are femurs and inserts a major cause of revision and implant failure that need to be solved right now?  In our opinion no.

So rather than spending millions of dollars, our resources and time to develop a solution that could be the same or modestly improved we thought it makes more sense to buy implants from an implant company that we can rebrand and relabel as Monogram products that already have the approvals and testing we need.  Rather than paying millions of dollars of development it costs us FAR less and accelerates the development.  You might wonder about the unit cost to purchase.  Wouldn’t it be cheaper to manufacture ourselves vs. buying a ready to go 510(k) approved implant?  The answer is no.  We are partnering with a vertically integrated orthopedic technology company that has a factory, so our cost to purchase is extremely competitive.  So in summary, we don’t see any incremental unit cost, we avoid the development cost, we mitigate risk because we know the implant components work because they are already in patients today,, and we accelerate the commercialization window.  It’s a win-win.


But the deal gets even better.  In addition to the attractive supply agreement and license to the intellectual property, the Company will be consigning to Monogram millions of dollars of implants that we can distribute or integrate to help fund our early growth.  In other words, if Monogram went to a factory and developed an implant we would have to place an initial order worth millions of dollars in order to even hit the minimum order quantities and generate sales.  We think it’s tremendous validation that an established orthopedic company will in some sense be helping to fund our initial growth.  Also and quite notably, the arrangement is non-exclusive.  Monogram has the flexibility to pursue opportunities as they arise.

‍Aren’t you doing robotics?

Yes!  This development doesn’t hurt our robotic strategy but helps it!  The deal frees up capital that would have been spent developing a femur and insert, components on which we have less of a technology advantage and that already work pretty well clinically, and allows us to allocate it to the robot development.

Furthermore, to get a robot approved for sale by the FDA you have to validate the intended use.  Strategically, it makes sense to have the implant approved for sale by the FDA first, and then to validate the robot can insert our approved implant safely and effectively.  So nothing is really changing beyond that we actually think our hybrid solution discussed above will be sufficiently differentiated and viable as a standalone business, even with manual instruments and no robot.  When we introduce the robot we think that the system will become even more compelling.‍

What’s Next:‍

The next step for Monogram is to recruit a select group of surgeon users that will help further our development and research efforts.  We are actively having those discussions.  We believe we will have a differentiated and novel product.

To scale, Monogram will need additional capital.  We believe that if we can successfully obtain clearance from the FDA for our implant system and generate revenue it will be helpful to this initiative.  Monogram will follow this path to generate revenue while the development of our robotics platform continues.

We recognize this information is highly technical and the management team holds live webinars with Q&A sessions to help provide clarity.  Learn more here:‍

The current investment round for Monogram ends April 24th and no future public offering can be guaranteed. Click here to invest today alongside more than 2,000 investors from around the world as Monogram disrupts this $27B industry.

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