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

But we just came out of our sales meeting in Miami. I don’t know that I’ve seen our US sales force more excited and motivated about what we’ve got in front of us in the future. And I think when we look at key account conversions, when we look at places where we are starting to win either €“ not normally single vendor contracts, but let’s say, two vendor contracts, that trended pretty positively in the back half of this year. And so, I just don’t think what we’ve seen so far is kind of the harvest of all of the legwork we’ve done with deployed inventory, new product launch, new products, getting in new customers using more products. And hopefully, hopefully, as the market kind of stabilizes here, we’ll start to reap some of the benefits of the hard work that we put in here throughout 2022, into 2023.

That makes sense, Matt?

Matthew O’Brien: Totally. I really appreciate that. On the ApiFix side, Dave, I think it’s important to address for investors, I think you’ve said a doubling of revenues that you’re expecting this year from that product. I know a lot of people have been very bullish about it. I certainly am. I want to make sure that the expectation for the company on the opportunity for ApiFix hasn’t changed any way or when we should think about maybe a little bit more of an inflection in that product. I know doubling sales is not easy, but a bigger inflection from a contribution perspective, when we should think about that.

David Bailey: Obviously, we’re pleased with the doubling of this product line in the US. And I think as we again €“ I know we’ve said this a number of times, but as our surgeons get more and more comfortable with the data, that’s when we expect more rapid adoption. And what we are seeing right now is more willingness from a commercial account standpoint to start with ApiFix, do a few cases. And I think there is a bit of wait and see approach that most of our customers are having. And you can understand that, given some of the challenges with other new technologies that have entered the pediatric space on the spine side, that have kind of had a start-stop phenomenon in some of those product lines. And so, I think our customers are being cautious.

Obviously, doubling is really €“ we’re really pleased with that. But I think when we start to get two-year data, and then ultimately three-year data, that’s when we start to see an inflection point. And just so you know, we should have about 90 patients at two years by the end of 2023. We have 30 patients right now at the end of €“ 30 patients by the end of Q1. And we expect to get on the podium at POSNA for the first time with two-year data with our 30 patients. So still small numbers. But I think we would look at a bigger inflection point maybe out in 2024, 2025 when the data is a little richer, data is a little more aged.

Operator: Our next question comes from Mike Matson with Needham & Company.

Michael Matson: I wanted to ask one, just about kind of the market opportunities. So, I’m wondering, if you look at all the pediatric surgeons out there, I guess I’m focused more on the US here, but what €“ I don’t know if you’re going to give me numbers on this, but maybe we could just discuss it. What portion of those pediatric surgeons are now a customer of OrthoPediatrics in some way. So how much of your growth is coming from just actually taking a surgeon that’s not using any of your products and getting them to use some of your products versus having a bunch, the majority already using your products and just trying to get them to deepen penetration in those existing accounts.