Let us now sing praises of Blackstone Medical
BY ROBIN R. YOUNG CFA, NOVEMBER 8, 2004
The word in the aisles at NASS was that two private companies were "hot": Globus Medical and K2. But one company was "lava hot". Blackstone Medical. Now the largest private spinal implant company in the industry at $50 million in revenues (our estimate for 2004), Blackstone has shown the way for smaller independent spinal implant companies to compete against the giants of the industry. Not only was Blackstone "hot", but it had scooped the largest and most prominent billboard at NASS and painted it with shooting flames on a black background.
At NASS Blackstone introduced three strong new products which, in concert with a rapidly growing distribution network, could well drive 30-50% rates of revenue growth for 2006.
- Construx PEEK VBR system. This is an interbody implant made from PEEK plastic that is obviously different from any other we've seen. What makes this so cool is the modularity of the system. Its parts come together to form an amazingly wide range of implants to serve any patient and any surgeon. That offers surgeons a wide range of parallel and lordotic choices which, in turn, will work with a wide range of surgical techniques. If you get a chance, look at a photo of this product line. Believe it or not, it can offer sizes of between 12mm and 64mm! Finally, the engineers at Blackstone set the PEEK's modulus of elasticity at between cortical and cancellous bone.
- GraFx bone graft. Three well known bone void fill materials: Hydroxyapatite, calcium phosphate and calcium sulfate blended in a nanocrystalline formulation. Blackstone's objective is to promote better cellular activity with the nanocrystalline structure. While we don't know how or if that'll happen, it is clearly a creative and smart approach to an otherwise over crowded product category.
- NGage Surgical Mesh System. Like the Contrux system, this is also incorporates a kind of open design that builds flexibility for the surgeon. The material is titanium. The end cap snaps on the wire mesh, doesn't need screws or new instruments. Finally, the surgeon can size the mesh to the patient by trimming it.
Blackstone Medical began in the mid-1960s as Brinfield Precision and worked, developing prototypes for the aerospace and defense industries. In the mid-1970s the company entered the medical field, when William Lyons, the company's founder, was asked by US Surgical to develop the world's first surgical stapler. The speed and precision with which the customers' need was met laid the groundwork for a future that eventually made Brinfield the world's primary supplier of surgical staplers.
William's three sons, Bill, Matt, and Mike, were brought into the business and when their father passed away, they formed Blackstone Medical to focus on the spine industry.
Each brother concentrates on a different aspect of the medical device market. Bill, the oldest, focuses on biomedical manufacturing, Matt on mechanical engineering, and Mike on marketing and operations. The power of "family" is the tie that truly binds Blackstone together: a connection that transcends the business environment, guided by a triad of individual skills and minds acting as one for the benefit of the company, its employees, and its customers.
According to the HealthpointCapital database, there are 202 spinal implant companies operating worldwide. That is the largest single sector, in terms of companies, in orthopedics. Blackstone Medical, at $50 million in revenues (our forecast) for 2004 is poised on the basis of new products continue to be one of the fastest, most profitable spinal implant companies in the industry.
