Managing Partner of KICVentures and Former J.P. Morgan Analyst Predicts Continued Valuation Growth in the Spine Device Market
Aditya Humad, Managing Partner of KICVentures, released an analysis of the spine technology market last week that asserts it is still trending upward with growing valuations based on a largely under-served and expanding global patient population.
Humad’s analysis describes market consolidation, pricing pressure and increased competition as reasons often cited by institutional investors to forgo opportunities in spine. But with spine a $10 billion market and growing, Humad believes that it is not only a hot market for long-term players, but an often-overlooked market for potential investors. Humad cites the Viscogliosi brothers as an example of strategic investors and pioneers that focused on the orthopedic and spine sector to build a private equity firm and several successful transactions over the past 15 years.
Humad states that spine companies with niche solutions or strong growth have attained attractive valuations. “The LDR (Cervical Disc Replacement) was acquired by Zimmer Biomet for $1.1 Billion, K2M (Scoliosis and Complex Spine) was acquired by Stryker for $1.4 Billion, and Nuvasive (MIS and Lateral Approach) is valued $3.2 Billion. Globus Medical is now valued $5.3 Billion which is ~200% growth in valuation over 5 years and trades at 7x revenue,” says Humad.
This bodes well for KICVentures’ own spine portfolio that includes a disruptive innovation with its company AxioMed. KICVentures is a long-term value investor and Humad believes that it is strategically positioned to lead the market in five years because of the growing consensus about the superiority of disc replacement over fusion, and because of a strong interest globally for a viscoelastic disc solution, both of which AxioMed offers.
“AxioMed will disrupt the current spine fusion paradigm and immediately replace the rudimentary ball-and-socket disc designs on the market to provide the most natural disc replacement to the human spine,” says Humad.
KICVentures is a private investment company founded in 2005 by Harvard-trained Orthopedic Surgeon and Professor Dr. Kingsley R. Chin, who brings unique experience at the intersection of medicine, business and information technology. KICVentures is equipped with a strong advantage in identifying niche healthcare opportunities, and is headquartered in Boston, Mass.
About AxioMed, LLC
AxioMed, LLC was founded to advance the standard of care for patients with degenerative spine conditions by progressing spine technology beyond fusion and first-generation artificial discs. Led by an experienced surgeon team and utilizing patented viscoelastic polymer technology, AxioMed has developed the most advanced next generation of artificial disc replacement solutions for the cervical and lumbar spine.