Alphatec Holdings, Inc. (NASDAQ:ATEC) Q4 2022 Earnings Call Transcript

Kyle Rose: And then I’ll just — I’ll be greedy and take a follow-up here as well. You talked about the utilization increasing on a products per case basis as well as the productivity of surgeon — new surgeon users. Just wanted to see — we saw the chart there, but if you could maybe just take it one level deeper. As you go to the wider group of physicians, how have you seen the procedural complexity curve elongate or be pulled forward? I’m just trying to understand how the utilization rates are changing in the last several cohorts, as the market has normalized coming out of the pandemic?

Pat Miles: I guess if I understand your question and tell me, if I got it wrong is, what we have seen is people are compelled to come out here and what they’ll do is, they’ll come out here for PTP. And so they will learn PTP, they will have had a successful experience of PTP and they will expand the utility into things like cervical and more of a commoditized degenerative utility of different products. And so we will see the halo effect. The more experienced they get with PTP, the more complex they’ll start to apply to the different procedures. And I think that all gets reflected is the dollars per procedure starts to incrementally lift. And so we will start to see greater dollars in the PTP realm and that will ultimately skew the math as it relates to the entirety of all the procedures and the contribution by PTP. I don’t know if that answers your question.

Operator: The next question comes from the line of David Saxon with Needham & Company.

David Saxon: I wanted to ask on LTP. I know it’s early. But any overlap with docs doing PTP and those doing LTP? And if not, how we should think about the LTP opportunity and what it could mean for ATEC’s market share over the next call it 12 to 24 months? And then kind of looking at the chart showing the surgeon utilization ramp. Is there any reason why you wouldn’t be able to see that with a cohort of docs adopting LTP?

Pat Miles: It’s a great question, and I think we have a bunch of surgeons who do both PTP and LTP. And the dynamic is oftentimes it’s dependent upon pathology. So like if you have pathology that’s in this posterior and you want to do a decompression. If I want to do a single position surgery, I don’t want to do a decompression in the lateral position. So I will do it in a prone position. And so the way we’re seeing this start to unfold is you’re starting to see individual pathologies or individual types of surgeries being applied to individual patient physician. And so to us, what we don’t want to do is we want the surgeons to drive the reflected utility of the different procedures. But what we’re seeing is clearly a lot of excitement.

And I think one of the things that has yet to be reflected and I think time will tell is the impact of LTP, as you say, What’s at least our view is that the pendulum swinging back into your column at 51 is very, very big. So when you hear people say, hey, there’s a lot of ALIF contribution to the number, realize what that means is surgeons are doing more ALIFs, surgeons want to do ALIFs in as, close to a supine position as you possibly can, meaning laying on your back. There’s a bifurcation at 51 that you operate through. And the more we can get that from a physician perspective, the better we are. And so why we designed LTP is based upon our 20 plus years of experience in lateral, which means our understanding as to what the best patient position is for the respective requirements.