Franco-Texas MedTech Firm Looks to Innovate in Spinal Therapies
As Christophe Lavigne puts it, back in 2000, he and his co-founders were “three guys out in the middle of nowhere trying to create the gold standard of spine surgery.”
The three entrepreneurs were in Troyes, France, a town in the Champagne region known more for its half-timbered homes than its medical innovation. But that’s where they began work on what would eventually become the flagship product of their company, LDR Holdings: the Mobi-C, a cervical disk replacement device intended to give patients with spinal injuries greater flexibility and movement than traditional therapies, where the vertebrae are fused together.
Thirteen years later, the Mobi-C received has received approval from the FDA for use in the United States and, in October, LDR went public in a $75 million IPO. The company, which has been based in Austin since 2005, has operations in seven countries and sells its devices in 25 nations worldwide from Brazil to Japan. Lavigne, LDR’s CEO, says 30,000 spinal patients are treated with the company’s devices each year.
“Now, with the ability to insert this disc, we can restore the mobility of your neck,” Lavigne says. “There are very few non-fusion options for surgeons in the surgical spine area.”
I spoke with Lavigne following the expiration of the 30-day post-IPO quiet period.
He says money from the IPO will help LDR expend its sales and marketing presence in the US. LDR recently reported a third quarter net loss of nearly $8 million, nearly triple its $3 million loss the in the third quarter of 2012 (although LDR attributes more than half of the loss to $4.7 million in noncash expenses for the revaluation of warrants leading up to the IPO).
LDR began the process for getting US approval for the Mobi-C in 2005, shortly after founding the Austin headquarters. The company conducted a randomized trial that enrolled 600 patients in a study that collected data for two years. Today, the company has 13 products including cervical disks, for use in the lower neck and into the back, and lumbar discs, which is used in the lowest portions of the spine.
Its “Easyspine,” is a screw system that provides immobilization and stabilization of spinal segments in patients 12 and older in the treatment of various acute and chronic instabilities of the spine. LDR also sells several spinal “cages,” which come in a variety of heights and angles and are inserted into the space between spinal discs to give patients’ spines stability.
And LDR does have competitors in the spinal device market, including DePuy Synthes Spine, a division of Johnson & Johnson (NYSE: JNJ), Medtronic Spine and Biologics (NYSE: MDT), Nuvasive (NasdaqGS: NUVA), Globus Medical (NYSE: GMED), and Stryker (NYSE: SYK), according to the investor website Seeking Alpha.
Lavigne, like his two other co-founders, has a background in mechanical engineering and marketing. The three worked together for several years at a company where they developed, marketed, and sold spinal medical devices in partnership with surgeon-designers.
LDR quickly received permission to sell its devices in Europe and, within four years, was eyeing a broader global expansion, namely the US market. It was during those initial presentations to potential investors that brought the company in front of Austin Ventures, which led to founding the US headquarters in the Texas capital.
Prior to the IPO, LDR raised a total of $62 million through a Series C round last year. Among its investors were PTV Sciences in Austin, Rothschild Private Equity, and Telegraph Hill Partners.
“I had no idea where [Austin] was; I had expected to go to New York or San Francisco,” he says, laughing. “My grandmother said, ‘Don’t come to Texas. They kill French people there.’ ”
But political acrimony has not played a role in the business, Lavigne has found. And he says, as an amateur guitarist, the statue of Stevie Ray Vaughan in Austin’s Zilker Park made the Texas Capital an easy sell for LDR’s US home.
“Austin is not only a great place to live, but there is talent already there,” he says. “We also have the ability to attract people to come here.”