The Next Great Small Cap Med-Tech Story?

SI-BONE (NASDAQ: SIBN) is a $441M medical device company with a minimally invasive surgical implant system to fuse a joint that causes lower back pain.

SI-BONE is the market leader in this procedure with 5,100 done in 2018 and sees 279,000 potential patients per year in the US alone.

It is estimated that 30M suffer from lower back pain in the US with 4.7M SI joint related and 1.4M eligible for surgery, resulting in a $2.7B annual market opportunity in the US.

The implant SI-BONE (SIBN) uses is durable and is 3D printed with low complication rates. The result also sees a significant reduction in opioid usage from patients. Note statistics and information source: Sentieo.

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From its S-1 Filing:

“Patients with sacroiliac joint dysfunction may experience debilitating pain. We believe that the sacroiliac joint is the last major joint to be addressed by the orthopedic implant industry. Studies have shown that the disability that results from disease of the sacroiliac joint is comparable to the disability associated with a number of other serious orthopedic conditions, such as knee and hip arthritis and degenerative disc disease, each of which has surgical solutions where an implant is used and a multi-billion dollar market exists.”

SI-BONE Fundamentals:

SIBN trades 8.25X sales and grew revenues 15% in 2018 with greater than 90% gross margins.  It sees future growth drivers with a growing reimbursement coverage, expanding the sales force, and rolling out next-generation products as well as products in adjacent markets. SIBN announced several new coverage wins in Q3 and could see key decisions from large payers in 1H19.  SIBN posted 16% procedure growth in Q3 and finished the quarter with 46 direct sales reps. It has a scalable and profitable business model that can penetrate an underserved market. Data source: Sentieo.

SI-BONE could quickly attract acquisition interest from larger players in the spine market considering its large addressable market, profitable model with high margins, accelerating revenue growth, and favorable reimbursement progress. It’s also differentiated and targets a key niche with strong clinical data supporting the procedure.

Here’s a look at its stock price chart:

si bone stock chart research analysis price_week february 19
SI-BONE (SIBN) Stock Chart. Source: TradingView

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The author does not have a position in mentioned securities at the time of publication.  Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.