ANOVA: Biomet co-founder, Spires in ortho implant startup
By Milt Capps Updated 9:59 a.m.
ANOVA Implant Solutions, a Brentwood startup, can become a nationally recognized orthopedic implant brand, according to founder and CEO Walter Spires.
That's part of the pitch Spires is carrying as he makes the rounds of Nashville venture capital firms.
"We believe Nashville is a strategic location based on the facility and provider companies here and hope local VC will agree. In spite of the lack of a track record of Nashville investors funding implant/device companies, we hope to be a firm local investors take an interest in," said Spires.
Armed with a prosthetic knee product and eventually hip products, Spires said he believes Anova can become "cash-flow positive" with $1 million from investors. A bigger raise would let Anova target additional market segments, but it might be best to grow Anova's valuation before accepting that much capital immediately, he said.
Anova's current lead investor is Biomet co-founder Niles Noblitt, Spires confirmed. Spires declined to discuss current revenue or to say how much has been invested in Anova to date, but he noted two individuals now share ownership with Noblitt and himself.
Noblitt and his co-founders grew Biomet to a listed company in Warsaw, Indiana, the med-devices seedbed. In a transaction valued north of $11 billion, Biomet sold in 2007 to a consortium of affiliates of Blackstone Group, KKR, Goldman Sachs and TPG. Noblitt is on the board of Indianapolis startup NICO Corp., which focuses on devices for tumor removal. Research online suggests Noblitt was not long ago on the board of OrthoHelix Surgical Designs, a Medina, Ohio-based implant and tool manufacturer.
Anova may also have leverage in what Spires describes as its "hybrid" business model: Anova will initially market and distributes other companies' devices (and later offer its own branded proprietary products).
Anova will also provide "perioperative process" consulting services that help patients, physicians and facilities improve outcomes and reduce costs, said Spires. Anova can help improve the quality of care and "begin to drive millions of dollars from the supply chain side. Those goals are not mutually exclusive," Spires said. (E.g. - "Perioperative" is institutionalized at Vanderbilt University Medical Center.)
Spires' plans and projections seem grounded in decades of experience in devices, including executive jobs with HCA Physician Services, OrthoLink (United Surgical Partners), Biomet, DePuy, then-Dow Corning Wright (now Wright Technology) and an engineering job early-on with Zimmer. Prior to Anova, Spires pursued a similar venture, Triune Ortho-Neuro, but the timing ultimately wasn't favorable, he explained.
The timing now is good, he told VNC: Reform-driven cost and quality pressures, the legal and regulatory headwinds faced by some implant companies and other factors have created opportunities for smaller players, he said. (The industry's oft-cited Big Five are Biomet, Zimmer and Johnson & Johnson's DePuy, all in Warsaw, Ind.; plus, Smith & Nephew in London and Stryker in Kalamazoo.)
Although Spires stressed Anova may eventually have more partners for its portfolio of devices, for starters Anova has teamed with Australia-based Advanced Surgical Design & Manufacturing, (ASX:AMT). After some pilot projects, Anova has achieved traction in selling ASDM's active total knee replacement prosthesis, said Spires. Anova recently secured contracts in HCA divisions TriStar Health Services in Tennessee-Kentucky; and, St. David's Medical Center in Austin, Texas.
Spires said he believes major device competitors have an eye on Anova, though he acknowledges the startup is "just now becoming a gnat in the eyes of the large corporate bulls. I do see some tail swatting toward us coming in our not too distant future," he added. VNC