SI-BONE, Inc. is a medical device company that has pioneered a family of proprietary minimally invasive surgical implants to fuse the sacroiliac joint for treatment of musculoskeletal disorders of the sacropelvic anatomy. The company has a demonstrated track record of building innovative and proprietary products and surgical techniques to address unmet clinical needs and improve patient outcomes.

Business Overview

SI-BONE was incorporated in 2008 and is headquartered in Santa Clara, California. The company introduced its first generation iFuse implant in 2009 in the U.S., in 2010 in certain countries in the European Union, and in 2015 in certain countries in the rest of the world. Since then, the company has launched four titanium implant product lines, including iFuse-3D in 2017, iFuse-TORQ in 2021, iFuse Bedrock Granite in 2022 and iFuse INTRA in January 2024.

The company's products are used to treat sacroiliac joint dysfunction, pelvic fixation, and pelvic trauma. As of March 31, 2023, more than 100,000 procedures have been performed using SI-BONE's products by over 3,700 physicians in the United States and 38 other countries since the introduction of iFuse in 2009.

Financials

For the full year 2023, SI-BONE reported revenue of $138.9 million, a 24% increase from the prior year. However, the company incurred a net loss of $43.3 million and generated negative operating cash flow of $18.7 million and negative free cash flow of $26.5 million.

In the first quarter of 2024, the company reported revenue of $37.9 million, a 16% increase compared to the same period in the prior year. Gross margin for the quarter was 79%. The company's net loss for the quarter was $10.9 million.

Liquidity

As of March 31, 2023, SI-BONE had $157.8 million in cash and marketable securities. The company has financed its operations primarily through the sale of its common stock in public offerings and debt financing arrangements. As of March 31, 2023, the company had $36.1 million in outstanding debt.

Geographical Breakdown

The majority of SI-BONE's revenue is derived from sales to customers in the United States. In the first quarter of 2024, the company's U.S. revenue was $35.4 million, representing 94% of total revenue. International revenue was $2.4 million, or 6% of total revenue.

Product Portfolio and Innovation

SI-BONE has a demonstrated track record of developing innovative products to address unmet clinical needs. The company's product portfolio includes the iFuse, iFuse-3D, iFuse-TORQ, iFuse Bedrock Granite, and iFuse INTRA implants.

In April 2024, the company received 510(k) clearance from the FDA for its 9.5-millimeter-diameter iFuse Bedrock Granite implant, with a market-expanding indication for placement in the S1 pedicle and pediatric deformity. The company launched this implant at the end of April 2024 and expects an expanded rollout in June 2024.

The addition of the granite 9.5 implant is the continuation of SI-BONE's strategy to build a broad portfolio of innovative products to address unmet clinical needs and accelerate growth. The company has successfully launched several new products in the last three years, including iFuse-TORQ in 2021, iFuse Bedrock Granite in 2022, and iFuse INTRA in January 2024.

Physician Engagement and Commercial Execution

SI-BONE has made significant investments in its commercial infrastructure to build a valuable sales team to expand the market, drive physician engagement, and deliver revenue growth. As of March 31, 2023, the company's U.S. sales force consisted of 85 territory sales managers and 67 clinical support specialists directly employed by the company, as well as 183 third-party sales agents.

The company's sales force productivity, as measured by revenue per territory, has been steadily improving. As of March 31, 2023, the company's average revenue per territory sales manager was approximately $1.6 million, representing a 26% increase compared to the prior year period.

SI-BONE has also made significant investments in its academic training programs, having trained nearly 1,600 residents and fellows since 2018, including over 250 in the current 2023-2024 academic year. The company believes these training programs will continue to drive adoption of its products in the quarters and years to come.

Risks and Challenges

SI-BONE faces several risks and challenges, including the ability to maintain favorable reimbursement for its products and procedures, the impact of potential economic weakness on patient willingness to undergo elective procedures, and the ability to manage risks to its supply chain. The company also faces competition from other companies developing products for the sacroiliac joint and pelvic fixation markets.

Outlook

For the full year 2024, SI-BONE is guiding for worldwide revenue between $164 million and $166 million, representing year-over-year growth of approximately 18% to 20%. The company expects significant adjusted EBITDA improvement for the full year 2024, putting it within reach of its adjusted EBITDA breakeven goal.

Conclusion

SI-BONE is a leading medical device company that has pioneered innovative solutions for the treatment of sacroiliac joint dysfunction, pelvic fixation, and pelvic trauma. The company's robust product pipeline, strong commercial execution, and focus on clinical evidence position it well to continue delivering top-tier medical device revenue growth and creating value for shareholders.