Arbutus Medical – 16 June
Arbutus Medical’s purpose is to develop a portfolio of “frugal innovation” devices that save costs for hospitals and improve access to orthopedic surgery. Arbutus Medical launched its DrillCover, a radically affordable orthopedic power drill system, in late 2016. After focusing on low-income countries for two years, the company pivoted to high-income markets and are now distributing their products to global health markets, as well veterinary, military, and trauma medicine markets in North America and Europe.
Traditionally, orthopedic tools are sold as large capital expenses. Arbutus Medical provides a radically affordable alternative. For example, high-end surgical drills offered by other major orthopaedic device companies are sold as capital items and cost $30k each. A typical Trauma Center ER, operating room, or field surgery team may need 10 drills to handle back-to-back surgeries (since a drill takes 24 hours to sterilize) tying up as much as $300k. COVID-19 has placed further pressure on capital budgets. Low-end surgical drills exist in the $1-5k capital expense range, but are unreliable and have no North American market share. The only power tools which fit consumable/operational budgets are completely disposable (i.e. Bioaccess), wasteful, underpowered, and cost $200-500 per use. Arbutus Medical is plugging this gap in the market, providing high quality tools at a much lower cost.
Arbutus Medical has generated over $1 million trailing 12 months revenue. To date, they have shipped products capable of safely treating over 58,000 human patients and 38,000 animal patients across 36+ countries. These products are used by more than 10 NGOs, including Doctors Without Borders. Their products are also in use by both the Canadian and US militaries.
They have experienced 62% year-on-year growth in veterinary sales, selling to eight distributors. They are expanding their sales to trauma centres in North America after a successful partnership with a major level 1 trauma center in Baltimore, Shock Trauma.
COVID-19 has been a challenge for the company as it has really compressed the capital equipment budgets of hospitals. Consequently Arbutus Medical are pivoting their offerings to minimize up-front capital costs for hospitals and fit their operational budgets.
Lawrence Buchan, CEO & Co-Founder – Lawrence is an impact-driven medtech entrepreneur and believes in using business as a force for positive social change. He has a background in orthopaedic research and medical device design. A co-founder of Arbutus Medical, Lawrence is an ardent advocate for the 5 billion neglected patients without access to safe surgery worldwide.
Elise Huisman, Director of Business Development & Co-Founder – Elise holds a PhD in orthopaedics, and worked as a global medical device market research analyst. Arbutus Medical’s global veterinary business and marketing is spearheaded by Elise, while also defining a global human impact sales program. She previously led clinical research and impact measurement at Arbutus Medical. She strongly believes in the company’s mission to improve access to safe surgery globally.
Michael Cancilla, Director of Engineering & Co-Founder – Michael brings design and project management experience from his time at Verathon Medical, Vancouver Coastal Health, and Heath & Sherwood. He is motivated by creative, user-driven projects and inspired by designers who celebrate resourcefulness and DIY attitude. At Arbutus, he leads our regulatory and engineering efforts and jump-starts new projects.
Arbutus Medical raised over $4 million in dilutive and non-dilutive funds to develop their DrillCover platform and secure regulatory improvements. They are trying to target a $2million annual recurring revenue customer base to set them up for a series A round.
The company is pursuing a beachhead market strategy. The top priority for the next two years is to solve the power tool problem for over 300 Level 1 and Level 2 trauma centres doing orthopaedics, and to use that as a launchpad and gateway into the operating rooms and new frugal innovation product opportunities. With their next funding round, they will be developing a go-to-market strategy for the trauma market.
As the company develops their trauma centre market, they will be adding sales and customer support staff, and will bolster their supply chain management. Otherwise, their team is set and ready to rock for the next 18 months.
Arbutus Medical sells to eight distributors for veterinary, military and global health markets, and they sell directly to trauma centres. They sell both capital and consumable parts, with a full kit containing the drill and covers and parts such as their DrillCover kits.
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