Aliso Viejo-based medical device company Vertos Medical Inc., founded in 2005, says it’s gaining traction as it looks to a breakout year in 2023 for its proprietary technology that treats back pain.
“We’re growing really, really fast,” Chief Executive Eric Wichems told the Business Journal.
“We’re scaling the company and building.”
A sign of that growth was the Deloitte Technology Fast 500, which in November ranked Vertos No. 384 nationally, saying it grew 348% in a three-year period between 2018 and 2021.
Sales doubled in 2021 alone and growth this year and next year should be in the 60% to 70% range, Wichems said. Its annual run rate was about $47 million as of the end of the last quarter, he said.
A few years ago, the company was doing 2,000 procedures a year; it’s now up to 5,000 to 6,000 a quarter.
“Our goal next year is to get a true national footprint,” Wichems said. “We can grow to as many as 30,000 procedures a year.”
He says as many as 2.4 million patients may benefit from the company’s back pain-treating procedure, which it describes as being minimally invasive.
Back Pains
Vertos dates to 2005 when a pair of interventional radiologists designed a procedure to remove lesions off cancer patients.
They realized the procedure could also be used to alleviate lumbar spinal stenosis, which limits the ability of people to stand and walk with pain or numbness in legs and lower backs. The degenerative condition typically affects about 15% of people 60 and older who often find relief when sitting or leaning forward.
The typical lumbar spine surgery removes a layer of the vertebrae to create more space for the nerves. Vertos’ procedure, called Mild, works in a less invasive manner by inserting a straw-size device to remove the cause of the stenosis, the company says.
The company notes that its technology “requires no implants, no general anesthesia, no stiches and no overnight hospital stay.”
The procedure received Food and Drug Administration clearance in 2006 and has been clinically demonstrated to last five years; patients typically return to activities of daily living within 24 hours with no restrictions.
“When we first launched in 2008, there wasn’t anything like this,” Wichems said. “We actually created a market where none existed.”
2013 Setback
Wichems, whose background includes being director of marketing for medical devices in the plastic surgery market for Allergan Medical, joined Vertos in 2011 as its vice president of marketing before becoming CEO in 2014.
Vertos faced a setback in 2013 when Medicare told the company that to receive reimbursements it had to conduct a significant clinical study, which caused a four-year delay in scaling the firm while the tests were conducted.
That action came about a year after a New York Times report casted doubt on the long-term success of the company’s procedures and its clinical trials.
The Medicare-requested studies have proven positive, as the company nowadays says it has 16 clinical trials over 30 peer-reviewed articles.
In 2017, the OC tech and life sciences incubator Octane awarded Vertos its High-Tech Innovation Award.
At the time, the company only had 15 employees. Since then, it’s grown to about 150 employees with plans for 210 to 220 by the end of next year, Wichems said.
On Nov. 21, Vertos announced the hiring of Mehrzad Khakpour as its first vice president of research and development. He was most recently at Sonendo Inc. (NYSE: SONX), a Laguna Hills-based dental technology company where he was responsible for developing the product portfolio and roadmap for the past 14 years.
IPO Possible
Vertos has raised about $130 million in equity financing and another $27 million in convertible and non-convertible debt from investors that include Aweida Venture Partners, Leerink Revelation Partners, Mercury Fund, Onset Ventures and Pitango Venture Capital.
It was considering an initial public offering this year, but backed off because of market conditions, Wichems said.
