OrthoPediatrics Corp. (NASDAQ:KIDS) Q4 2022 Earnings Call Transcript

And so, I think as we get inventory for this product, as well as new products that offer both MDO and Pega and we can get those in the hands of both our US and international selling organization, we expect those product lines, those two businesses to grow in excess of 20% for the next several years.

Fred Hite: I would just add, particularly in the Pega side, I think we’ve gotten this question from investor in the past, can this grow 40% or 50%. And it’s not going to grow that fast because we have to get inventory €“ we have to get set. And we have to deploy those sets. So, obviously, we ordered a lot of sets when we first bought it. We’ve now put our second round of sets, orders on place. Those will start showing up in the second half of 2023. And so, as we continue to roll out more and more sets on the Pega aside, we’ll have growth well in advance of the overall business growth for the next five years.

David Bailey: Last point I’d make on that Ryan is on the Pega aside, the only product that had been aggressively commercialized of their seven products was the FD rod. And so, we’re already seeing an uptick in the use of FD rod in indications that are more related to trauma. And so, we see a build and share gains of the FD rod. But also, you have six additional products that for the most part are new to our customers. And they have a few KOLs that have used them that helped maybe design those products, but for the most part, they’re entirely new to our customers, both in the US and around the world. And so, we’re thinking about how we pace out new product development and new product launch, kind of feel like we’ve got in the bag here about six different products that we’ll be launching over the course of the next 12 months or so that I think our customers are really going to like and so far we’ve gotten positive feedback on.

They just haven’t had access to them or sales force to really credibly deliver those products and educate on those products. So pretty bullish about what that could look like as we start to roll out products beyond the FD rod.

Operator: Our next question comes from Matthew O’Brien with Piper Sandler.

Matthew O’Brien: Dave, on RSV, it sounds like things are tapering off. And I know the guide for the year is somewhat conservative, which is great. But you trained a lot of folks last year, but what did it do to you as far as the momentum goes, especially in Trauma & Deformity as far as taking market share because I’m sure you had to slow down as far as your interactions with clinicians, et cetera. So what kind of headwind are you facing this year to getting that momentum back going in T&D as you think about 2023?

David Bailey: I don’t know that it blunted momentum. I think we were definitely having a lot of conversations with customers. And you’ve seen from the deployment in Q4 that we were pretty aggressive, obviously, for the year and for Q4 and getting new sets to the field. So it’s possible, Matt, that some of those sets that deploy and then ultimately take a little bit of time to get inside the children’s hospitals and get on consignment, it’s possible that some of that momentum would have slowed down a little bit, just from a pure administrative standpoint. We’ve seen that right on the 7D side where surgeons get very excited, but then just some of the administrative challenges of moving this through the process have been slowed just by some of the disruption in the marketplace.