OSP Advisors, formerly known as Ortho Spine Partners, has had the opportunity to work with multiple start-ups in the musculoskeletal and wound care specialties of the medical device industry. OSP Advisors has developed a unique approach and established some of the best relationships in the industry with surgeons, distributors and hospital executives allowing us to apply our knowledge and expertise to shorten the sales cycle when launching a company or product. Below is an example of how we did it.

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Commercializing products for diabetic foot ulcers and venous leg ulcers in the wound care industry presents unique challenges, particularly in navigating Medicare reimbursement policies. Medicare reimbursement for wound care products is subject to strict criteria, requiring evidence of clinical effectiveness and cost efficiency. This necessitates extensive clinical trials and data collection to meet Medicare’s standards, increasing the time and cost of bringing products to market. Furthermore, the wound care market is highly competitive, with numerous established players offering a wide range of products. Differentiating new products and gaining market acceptance amidst this competition requires innovative technologies, strong clinical evidence, and effective marketing strategies. Additionally, understanding and complying with Medicare’s reimbursement policies and procedures is crucial for ensuring the financial viability of products targeting diabetic foot ulcers and venous leg ulcers in the wound care industry.

Note : Each company has its own characteristics and considerations before launching a product. This represents an example but it is important to know that there is no copy/paste solutions for any company.

1. Great Product with No Focused Strategy

OSP Advisors began consulting with Axolotl Biologix in 2018 where it was easy to identify the quality of the product, the science and the patient outcomes. The company was seeking the ability to grow more rapidly and to better target the customers that treat these pathologies.

Failure should be our teacher, not our undertaker. Failure is delay, not defeat. It is a temporary detour, not a dead end. Failure is something we can avoid only by saying nothing, doing nothing, and being nothing.– Denis Waitley

2. The First Acquisition

When the Board of Directors for Axolotl Biologix called OSP Advisors, they were trying everything they could to source funding options. They had burned through a significant amount of cash and were falling behind revenue projections. The OSP Advisors team knew that the opportunity would be ideal for a private equity firm or a wealthy family office to potentially own the entire company.

  • Identify the right investor to support the company.
  • Look at the existing cap table.
  • Create a strategy that could turn the business around.

3. Close the Transaction and Implement the Strategy

With an ever-evolving regulatory and reimbursement landscape, it was extremely important for our team to become experts in where the market was trending towards. What is the FDA trying to accomplish? Where is CMS going with their guidance and what information do they want to see?

By leaning into a full engagement with Axolotl Biologix, OSP Advisors had two of its executives appointed as Board Members and one also served as Chief Executive Officer. The owner of the company developed a high level of trust with the work that was put into the creation of the strategy and the teams ability to execute.

4. Organize the Operations

As a part of the strategy, OSP Advisors highly encouraged allowing the company to be entirely focused on what it did the best: Create great products and own the sales channel. OSP Advisors leveraged its partner company, OrthoEx, to manage all of its operations. We found some ideal partners that could serve as contract manufacturers and leveraged some other relationships with regulatory and quality support to ensure positive interactions with the FDA and CMS if and when needed..

  1. First class management of inventory
  2. Change corporate headquarters to Scottsdale, Arizona
  3. Work with the operations team to provide intelligence for product forecasting.

5. Focus on Selling

Due to the smaller size of the company, with only 10 employees, it was important to evaluate all of the options for commercialization.

Direct Sales – This was out of the budget for such a small company so we couldn’t plan to build out a direct sales organization.

Independent Agents – Again, with a small team, including only one sales leader, trying to manage a sales organization with multiple independent sales agents figured to be more difficult for a variety of reasons.

Partner with a Distributor – This model seemed to make the most sense as it allowed for us to work with a limited number of customers while taking advantage of their larger footprint and existing sales organization.

6. FDA Inspection

As a leadership team, we decided to take a conservative approach to the ever changing regulatory landscape led by several changes by the FDA. This approach became immediately rewarded when the FDA did its first inspection during the OSP Advisors leadership and after the first acquisition by our family office.

In a marketplace where many of the company’s competitors were getting warning letters, the Axolotl Biologix conservative strategy paid off by completing the inspection with no findings.

7.Major Accomplishments Over the First Three Years

Along with the success of the FDA Inspection, the changes that the team led allowed for some significant growth and profitability. Some of those are listed below.

  • Aggressive Sales GrowthOur team helped led revenue growth from $1M to over $40M from 2021 – 2023.
  • Reimbursement StrategyThe work that was done to ensure an economic advantage led to significant growth.
  • Clinical Documentation – The team was able to do the scientific work that produced 5 peer-reviewed clinical white papers.
  • Hospital Product Launch – Our team was able to negotiate a large scale GPO contract to support our hospital launch.
  • Clinical TrialWe made significant improvements by upgrading the CRO to increase the probability of success.
  • Liquidity Event – Knowing that a window was opening, our team set out on a couple of opportunities to find an M&A partner.

8. Merger Complete

After a meeting at the Canaccord Genuity meeting prior to the 2023 American Academy of Orthopedic Surgeons (AAOS) meeting, our team sourced a few potential leads to find an acquisition partner.

This meeting and ensuing process led to the successful closure of a merger between Axolotl Biologix and Carmell Corporation (Nasdaq:CTCX) for a total potential value of $140M with a mix of cash and stock.

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