I originally learned of HAPPE Spine in September 2023 when the co-founder and CTO Dr. Ryan K. Roeder was profiled by the Notre Dame IDEA Center. (Read it here.) Ryan’s INTEGRATE®-C spinal fusion cage had recently been implanted in the first patient, offering significant advantages over traditional devices. Fast forward to this year’s RALLY hosted by Elevate Ventures where I met Ryan in person. He shared that HAPPE Spine’s INTEGRATE-C device has since been implanted in 250 patients, with promising results. I invited Ryan to present to the VisionTech Screening Committee and they fast-tracked HAPPE Spine to pitch to VisionTech Angels investors on Monday, October 21st at 12 noon ET. Please read my conversation with Ryan and make plans to participate in HAPPE Spine’s virtual pitch.
BP: Tell us a little about your background.
RR: I grew up on a family farm in Bremen, Indiana. My initial thoughts of studying mechanical engineering at Purdue changed when I discovered materials engineering, which applies chemistry and physics to design and create materials for all types of technology. I was given opportunity as an undergraduate to do research and realized I liked the independence of working in a research lab and exploring new ideas, so I earned a PhD in materials engineering from Purdue. I then did a post-doctoral research fellowship at IUPUI’s Department of Orthopedic Surgery and then accepted a faculty position at Notre Dame in 2001. So I’ve covered the three major universities in the great state of Indiana!
BP: People don’t normally equate Notre Dame with medical devices. Explain the connection.
RR: Of course nationally most people think of football when they think of Notre Dame. What attracted me was the university’s commitment to growing the engineering and research programs. I’ve been at Notre Dame 24 years during which time research expenditures have grown by more than five-fold. During my first decade at Notre Dame, my research lab was focused on studying bone and biomaterials that integrate with bone and even act like bone. HAPPE’s core technology came out of that research more than 15 years ago.
BP: Explain the problem you are solving.
RR: Nearly all orthopedic implants have at least one component that needs to interface with living bone. These implants or components are primarily made from two materials – a metal (titanium) or a plastic called PEEK – which are both flawed. Titanium implants support bone growth along surfaces and recent advances in 3D printing allow the production of porous titanium implants that support bone ingrowth. However, the rigidity of titanium shields bone from mechanical loads that stimulate bone growth, and the metal’s density inhibits imaging, making it impossible for physicians to get an unobstructed assessment of healing and fusion post-operatively. PEEK implants allow clear radiographic imaging and transmit mechanical loads to bone, but bone does not like PEEK surfaces. Surgeons have to decide between two non-ideal solutions.
HAPPE is an acronym for HydroxyApatite Porous PolyEtheretherketone. Our secret sauce is that this platform addresses the deficiency of PEEK in a way unlike anything on the market. We have modified PEEK to integrate with bone. We added porosity to draw blood and other autologous factors into the implant to promote rapid healing and bone in-growth. We also added hydroxyapatite, which is the same mineral found in bone, into the PEEK such that it is exposed on all material surfaces to promote cell signaling and bone on-growth. Once placed in a patient, the implant looks and acts more like bone. HAPPE also allows clear post-operative imaging of both the implant and new bone growth. This part of our value proposition has become even more important with the rise of AI and data analytics, which require quality imaging data. With our biomaterial platform, physicians are able to assess patient outcomes with much greater clarity.
BP: Why is your device the right solution?
RR: The HAPPE INTEGRATE®-C interbody spinal fusion cage is a device that acts as a spacer in the disc space to re-establish proper disk height and spinal alignment. These devices are intended to encourage bone to grow between adjacent vertebrae and fuse them together. We chose this market for our initial product launch because the tradeoffs between PEEK and titanium are acute, and poor outcomes in multilevel fusions provide an opportunity to show improved outcomes with our product.
BP: Where are you in terms of commercialization?
RR: We have been very strategic and methodical in our commercialization efforts, focusing on key influential adopters and serving only a few markets. Our number one focus in commercialization is to validate the efficacy of our platform through clinical studies. This is a large part of this funding round.
In May 2023, we received FDA clearance. Dr. Stephen Smith performed our first clinical case with the INTEGRATE®-C in August 2023, at Beacon Health in South Bend. Thanks to our 28 early adopter surgeons across the country, more than 500 INTEGRATE®-C spinal fusion cages have been implanted in more than 250 patients, with up to a year of patient follow-up.
BP: What has the reaction been from orthopedic surgeons?
RR: Clinical outcomes have been uniformly excellent on post-operative follow-up. Several surgeons have described three- and six-month post-operative images of bone healing as the best they have ever seen. We are seeing robust fusion even among patients that present challenges due to osteoporosis, diabetes, and heavy smoking or drinking. Dr. Smith says our device is the closest equivalent to a fusion with allograft (actual bone tissue) that he’s ever seen from a synthetic product.
BP: Any feedback from patients?
RR: As a company we don’t have direct patient interaction, but we do hear stories from our physicians. Our very first patient told her doctor at her three-month follow-up that she didn’t need to see him anymore. Her pain was gone. A farmer with severe spinal cord compression was treated with a challenging four-level fusion (four HAPPE implants) and returned to work in six months.
BP: Is this a platform technology?
RR: This is very much a platform technology. The material and manufacturing process are proprietary. This combined with the healing environment that HAPPE promotes and visibility in radiographs opens the doors to additional applications in the spine, as well as sports medicine, extremities and trauma. I will mention these and show examples in my pitch.
BP: What is the market opportunity?
RR: Our initial market entry has potential to capture $60 million within the total spine interbody fusion market of $2.5 billion. When you consider bone interfacing components across all orthopedic implants, we have a total addressable market of approximately $10 billion.
BP: Any competitors?
RR: HAPPE Spine is first to market with this technology and to protect our position, we have built a deep patent portfolio—ten active and six pending. We have three patent families that protect our material, our manufacturing process and our products.
BP: Right now, you’re serving as interim CEO. Can you comment on that and on your board?
RR: Prior to our FDA clearance, we hired a part-time CEO with extensive product launch experience to lead us through that process. After nearly a year, he resigned for personal reasons. I am currently CEO. We anticipate filling the position by the end of 2025. In the meantime, our board of directors includes a wealth of executive leadership talent with a CEO, COO, and former CEO/CFO. They all have experience in medical devices and orthopedics.
BP: What investment round is this?
RR: This is a bridge round to take us through the next 12 months of continued clinical validation and into a presumed Series B round.
BP: What is your planned use of funds?
RR: We have three priorities. First, ongoing clinical validation that includes achieving a milestone of 1,000 successful cases, demonstrating clinical outcomes in a retrospective study, and starting a prospective study. Second, manufacturing validation. We’re producing a diverse array of prototype orthopedic and spinal implants to demonstrate product capabilities. Third, commercial validation aimed at achieving sustainable sales and distribution of the INTEGRATE®-C. Last, we are exploring strategic partnerships, including a lead investor for the next equity round.
BP: Give me three reasons VisionTech investors should invest in HAPPE Spine?
RR: Sure! First, we’ve put implants in 250-plus patients and are seeing uniformly excellent early clinical outcomes. Second, we are preparing to engage strategic partners who are taking notice thanks to our surgeons and independent distribution partners. Third, we have built a passionate leadership team and board of directors with a wealth of experience in our target market. We will be adding to our team in 2025. We believe we are on the cusp of an inflection point!
VisionTech’s Virtual Pitch Event on Monday, October 21st begins promptly at 12 noon ET. Plan to join me and HAPPE Ortho Founder and acting CEO Ryan Roeder and fellow VisionTech investors. Please register here.
