The Knees Are Talking
Relentless RoundUp - Extra Special Edition (12th)
If knees could talk, what would they say?
“Hello. Are you there? Why did you take so few steps today? Something wrong? Anything I can do to motivate you to get up off the couch today?”
Alternatively, “wait a hot minute, our cadence is snappy! Keep it up.”
Well, the knees can “talk” and the FDA likes what they have to say. FDA approval for the first, smart orthopedic product worldwide was granted on August 27th to Vancouver’s very own Canary Medical.
Whether it is tracking acute care, post-surgical recovery, or the long-term monitoring of a total knee replacement, Canary Medical has developed technology that will forever change the relationship between patient and doctor. And it just so happens that Canary is the Relentless Venture Fund’s inaugural investment. As an extra special edition of the Relentless RoundUp, we dig deep to reveal the impact the world’s first and only smart orthopedic implant approved by the FDA will have on med tech investing, remote patient monitoring and improved health outcomes. Buckle up.
Canary Medical is a Data Company
Canary will be improving healthcare outcomes through continuous collection and analysis of medical data, collected from its proprietary implanted devices. First off the blocks, the canturio™te tibial implant, actively captures clinically relevant physiological parameters (activity, range of motion, step count, walking speed, pressure), as well as report on stenosis and leakage. Affectionately known as the “Chirp” to insiders, the product will self-report on function, diagnostic information, patient activity, recovery and treatment outcomes for up to 20 years. Yes, powered for two decades courtesy of the tried-and-true pacemaker battery.
The Analysts Are Writing Voraciously!
Canary has a partnership with publicly traded global MedTech leader, Zimmer Biomet (NSDQ:ZBH). Because of this exclusive partnership, Canary has been receiving independent review and profile from Zimmer’s public market analysts both prior to, and since receiving FDA approval.
When writing about Canary earlier this year Goldman Sachs queried, “Time to Get Bullish on Smart Implants?”
Spoiler alert. Yes.
Receiving FDA approval was required for the Zimmer Total Knee Replacement, aka ‘Persona IQ’, powered by Canary’s canturio™te to be sold in the U.S. Following the late summer announcement, Zimmer analysts were writing up a storm about what Canary brings to the global medical devices market as well as the potential value creation moving forward with the partnership.
“A watershed moment for medical devices” – Wells Fargo
“The killer app will likely be in outcome prediction capabilities – identifying currently undetectable items like infection and implant loosening” – SVB Leerink
Canary was flying high, flitting all over the conference floor at their first public reveal at the recent American Academy of Orthopaedic Surgeons (AAOS) event. Ryan Zimmerman wrote in the BTIG Medical Technology Industry Report covering “Takeaways from AAOS” that “there is increasing investor interest in the company [Canary] both in terms of its potential to improve ZBH's large joint recon business but also because it’s one of the more advanced sensor technology systems that has come to market and has the potential to drastically disrupt the device market (not just within orthopedics).”
We tend to agree about Canary’s disruptive potential.
Wait until you see what is in their pipeline!
What’s the Big Deal about Remote Patient Monitoring (RPM)?
Since fund inception, we have been highlighting our belief in the game changing potential of RPM. Why does RPM matter? Is it here to stay?
From a patient’s perspective, RPM provides an ongoing link to their medical team. It is the beginning of a digital relationship that allows for the shift from episodic patient-initiated care, to a continuous care collaboration. Doctors and their teams receive data. Review it. Respond to it. Improved patient outcomes are realized.
Imagine the possibilities.
As summarized by Seema Verma, Administrator, Centers for Medicare and Medicaid Services, “once information is freely flowing from the patient to the provider, it will help to spur innovation in the entire digital health information ecosystem…, and the advances in coordinated, value-based and patient-centric care will be even greater than anything we can imagine today.”
So why has it taken so long to get to this point? Two primary reasons – patient compliance and incentives for healthcare providers in the form of reimbursement and billing codes.
On the topic of patient compliance, just think of how many ‘wearables’ you have had over the years. Is it a smart watch or other product tracking steps as a proxy for your commitment to health and wellbeing? Have you connected your device for data uploading lately? Is the device even turned on? Do you use the device daily?
Well, when the sensor measuring your activity, as well as cadence and range of motion is embedded in your tibial bone – we can now firmly check the box on compliance.
Up next, incentives for doctors to review and respond to data. The ugly truth in the world of health innovation, is that in the absence of incentives for doctors (i.e., path to reimbursement and payment), even the most exquisite data streaming from the body to the cloud could be stuck in a perpetual brewing storm front.
Fortunately, during the past three years, the Center for Medicaid and Medicare Services has put forth guidelines and reimbursement dollar values for new Common Procedural Terminology (CPT) codes to incent clinicians to adopt RPM. These CPT potential monthly reimbursement values are in the range of approximately $120 – $200 per month or $1,440 – $2,400 per year per patient based on criteria and payer scenarios. If a surgeon does an average of 70-100 Persona IQ procedures on an annual basis, those numbers start looking attractive as an incentive to include remote patient monitoring into a care practice.
The Promise of RPM
RPM delivers on:
· Patient compliance with aftercare
· Empowering patients with their own aftercare
· Reducing frequency of hospital readmissions
· Fewer ER Visits
Combining this basket of deliverables translates into a measurable and impactful reduction in overall healthcare costs and improved health outcomes. Compelling social impact investing. Powerful.
Specific to Canary Medical, doctors will have unprecedented insight into a patient recovery to enable the potential for earlier intervention and highly customized rehabilitation. No video stream required. Game-changing.
RPM depends on the availability of a data set that is both clinically relevant and validated from an FDA cleared or approved device. The RPM data puzzle pieces are all in place with Canary – 100% compliance, on-demand and reimbursement compliant data, workflow management with a robust clinician dashboard, and analytics. Thrilling.
The Canary Vision Board Manifestation
With the vision to make medical devices smart, a decade ago CEO Dr Bill Hunter started talking to surgeons and MedTech executives to build out the Canary vision board. From Vancouver headquarters, Bill and his co-founders developed the wish list of what was needed in terms of reporting…and then they got to work writing the patents for sensors and medical devices to build a REMARKABLE intellectual property estate even before the first product was built.
Canary’s platform and sensors are scalable (and being developed) across a variety of surgical sub-specialties including trauma, spine and vascular. With a deep pipeline of products, suite of issued patents and one FDA approval in the pocket, the Canary vision board is one that would make even Oprah proud.
*****
Please reach out if you are an accredited investor and would like to meet in October and learn more about our current fundraising activities for Fund II, the “Relentless Health Pursuit Fund”. As we grow, the team will be tapping into our expertise putting more capital to work in emerging health technologies that have vaulted to the main stage. We will maintain our longstanding commitment to investment in preventative healthcare and mitigation of disease risk as well as chronic disease management. We maintain our unwavering commitment to investing in disruptive technology products and services that optimize access to healthcare and facilitate a robust continuum of care.