Joseph McGinley, McGinley Orthopedics - Studio Interview | LSI Europe '22

Transcription

Nick Talamantes  0:00  

Joe, thank you so much for stopping by to have an interview with LSI Europe.

Joseph McGinley  0:04  

Thanks, Nick, appreciate it. Great to be here.

Nick Talamantes  0:06  

Why don't you first tell us a little bit about what your company does.

Joseph McGinley  0:09  

Our company, McGinley orthopedics was founded several years ago. And really the focus is patient care. So we wanted to integrate technology into orthopedic power tools and orthopedic products to make a difference and change the standard of care. We've been successful. So far, we have two products that are commercialized FDA cleared on the market. And we're continuing to grow continuing to advance what we do in the orthopedic field.

Nick Talamantes  0:30  

So how is what you're doing better or improving upon the standard of care today?

Joseph McGinley  0:36  

Oh, I don't know how much time do we have here. 

Nick Talamantes  0:38  

As much as you want.

Joseph McGinley  0:39  

We have a lot to talk about, then, you know, our company is technology focus, we have over 125 patents, the two products that we commercialize, we essentially figured out how to embed sensor technology into orthopedic power tools to create a handheld robotic solution. So when people think of robotics and orthopedics, they think of these large robots that costs millions of dollars, hard to use very expensive, as far as capital expense, but we're able to do is take sensors and put them right into the power tools the surgeons use every day. So it augments with the surgeon skill set. So instead of everything being manual based on the field of surgeon, they now get sensor feedback that we take for granted in daily life. This is now just becoming a reality for Surgeons worldwide. That's our first product, the next product, we went to the implants realm. And for risk factors, in particular, we developed a product to offer an engineering solution to the most common fracture worldwide. We're successful at commercializing that and we're starting to see great results with early use of those products.

Nick Talamantes  1:36  

Tell me a little bit how you're disrupting orthopedic technology today?

Joseph McGinley  1:40  

Well, with all of our products, we're trying to advance the standard of care and medicine. With our current products. We're embedding sensor technology right into the orthopedic Tap Power Tools to provide an augmented experience for the surgeon. So they're getting feedback that they've never had before sensors that are so precise, it's less than a 10th of a millimeter accuracy, which really before you had, you just don't have products with that. So with these technologies, it's changing the standard of care for the better. By doing that we're eliminating steps in the operating room, we're making surgery safer, faster, more cost effective. And by cost effective, it's decreased costs of the patient, the insurer the hospital's really everyone wins in that situation. The safer a surgery is, the better it is for everyone. It helps the patient decrease risk of complication, because they're out of the operating room sooner, it allows the surgeon to have a more efficient or schedule, it decreases the number of times that you may need to re operate on patients. So by doing that we're innovating the edge of medicine, and we're changing the standard of care.

Nick Talamantes  2:38  

Tell me a little bit about this innovative financing route that you're taking right now.

Joseph McGinley  2:43  

Well, McGinley Orthopedics we innovate not only in our products and our technology, but also in investment. So we looked at how can we how can we do investment better? How can we fund our company in a non traditional means, we started out with REG D financing. That's how we funded our company today, we raised over $20 million, doing it that way. But now we need to scale, we need to bring our products in the market, we need to grow our sales team, we need to get to the market at a much larger scale. So we looked at the ways to do it. There's additional ways through private equity, investment banking, debt financing. But again, we said we can probably innovate this process as well. And we came across the Reg A financing rounds. So over the past several months, we've been working on getting approval for that. And you know, we're excited just this past week that went live. And we're now taking investment of 40 million rounds through Reg A financing. Great thing about that is anyone could invest the minimum investments $100 we're leveling the playing field, we're cutting out the middleman. So there's more for the investor more for the company. And it allows access to a much larger group of people.

Nick Talamantes  3:41  

With the successful Reg A completed, what comes next?

Joseph McGinley  3:45  

Well, first, you know, we have to complete the reggae, we need to get the financing in the door. Assuming we're successful with that, what we're going to do is grow our sales team, we're going to start to expand the company, we're going to start to try to penetrate the market on a much larger scale, not only in the US, but then look outside the US as well. In addition to that we have several products that are near commercialization stage. As you're aware, it's fairly expensive to commercialize the product, you have to get it through the FDA, you have to have all the proper testing and then you have to manufacture. So with these funds that's going to allow us to develop these other innovative products. So that next year when we come we have two or three additional products we can talk about and the company continues to grow and headed in the right direction.

Nick Talamantes  4:24  

Give me a little teaser. What's the next product you're most excited about right now?

Joseph McGinley  4:28  

You know if I answer that the engineers might get Mattamy. But you know, there's several on the list somewhere capitalizing on our current products to make us more viable even with our current platform. One of that is what's called a percutaneous pinning or wire fixation of fractures that we're very close on. We're also looking to have a software specific for spine surgery that's also very close to being finished. That gets us into a whole other market in orthopedics with spine surgery. And then beyond that we have some really cool technologies and integrated navigation. We have software management, as far as inventory management for hospitals, so really there's no limit at that point once we keep going, and this software continues to develop and these products continue to develop, it just creates sort of a cultivates an environment of innovation and products that will help the hospital and help the surgeons.

Nick Talamantes  5:17  

So Joe, what brings you to LSI Europe right this year?

Joseph McGinley  5:21  

Well, it's great to be here, just outside London, beautiful location, beautiful facility, it's great to be able to announce officially announced the Reg A round, I just had my presentation this morning. We officially launched the round this past week. And what our goal is this week is to meet strategic investors meet anyone who really wants to invest in startups at an early stage and have those conversations. We're also looking for partnerships, there's strategic companies here that can help with partnering both on the sales side as well as introductions to some of the larger companies in the orthopaedic market. So multi multifaceted approach to growing the company here at LSI. But this is where it started. This is where we learned about the Reg A financing. This is where we learned about some of these innovative approaches. And timing worked out perfectly that that round launched this week, as we were arriving here in London.

Nick Talamantes  6:09  

That's great. That is fantastic timing. Really, Joe, is there anything else you want to share with us? While we're you know, we've got the cameras on you.

Joseph McGinley  6:17  

Yeah, you know, I would encourage individuals to take a look at the investment. This is this is new. So for the first time, anyone really can invest in be part of early companies, startups, and be part of that opportunity to increase your wealth. Previously, you'd have to finance through private equity through investment banks, and most individuals don't have access to that. By doing this, we're limiting, we're leveraging the playing field, we're leveling the playing field, we're allowing anyone to have access to investment, and they can invest whatever amount they want, from 100 dollars up to 40 million if you like. So you get to control and then the great thing about that is you can be part of change in medicine, we didn't talk about that much. But what our products do or change the standard of care in life, in general, you really don't get the opportunity often to be part of change. This is a direct opportunity. This is the type of surgeries that everyone knows at least one individual that has had an orthopedic surgery, these products can be used in those surgeries, and you can be part of that difference, you can help actual change in the standard of care of medicine.

Nick Talamantes  7:20  

So commercialization scaling up, do you have a long term strategy, perhaps an exit in mind?

Joseph McGinley  7:26  

Well, every good business plan has an exit strategy. If not, you should consider it another investment. So we've thought about our exit strategy. And you know, because of the position that our company is in, we actually have several options, we can continue to grow organically and continue to develop products continue to cultivate sales. However, the the number one target is acquisition, we're primed for acquisition by a larger company, we would fit in well, with a larger lot of the large OEMs that are out there, a lot of the strategics that are out there, our products complement, they don't really directly compete with current products on the market. So there'd be nice fit with several of the larger companies out there. Also the way we have it set up with our different product lines and product families, there's also opportunities for licensing of the products, even, you know, asset acquisitions of certain products in general, if that fits with the strategy of another company. So we're in a very nice position. Also with the Reg A, you know, it's something that you can raise 75 million a year through a Reg A offering, we have the opportunity to continue in that direction. And it also sets you up to take the company public. So really, we have ample opportunities for an exit strategy. We're not sort of pigeon holed into one particular strategy. We look at that continuously and see what's gonna work best for our company work best for our investors and what's gonna work best for patients.

Nick Talamantes  8:41  

No, I believe you're headquartered in Wyoming. That's a pretty interesting spot to be a med tech company. Tell me about it.

Joseph McGinley  8:47  

We're starting the med tech hub of the United States in Casper, Wyoming. You know, all joking aside, it's a wonderful place to be and start a med tech company. We have great people, we have a great industry, our company is vertically integrated. So we're not only are we headquartered there, we have a manufacturing facility just 20 minutes outside of town that's FDA registered, as well as has aerospace manufacturing certification. So it's one of the most high tech manufacturing facilities not only in the state, but in the country. But this is all right in Casper, Wyoming. And the reason we're going to we're able to do that is just support supporting the community supported the state as a whole. There's really a pride in ownership of our company, and our product. So every product that gets produced, every one has pride of ownership in that and it's just wonderful to see there's great community support, and great acceptance among everyone that's aware of our products.

Nick Talamantes  9:35  

I love that purpose, that mission for keeping it all America made. That's great.

Joseph McGinley  9:40  

Yeah, that's worked out really well, especially with COVID and disruption of supply chains. We didn't have that issue because we had our own manufacturing facility. We didn't have the same problems with manufacturing getting shut down across the country and across the globe. We really had very little disruption of our timescale of development. So that was something that we thought of not obviously not COVID. But we thought about supply chain and supply chain risks, and said, How can we make our company more secure? How can we make it stronger? We said having manufacturing in house where you can control not only the quality of your product, but the timeline of your product and cost. We saw that as a as a benefit. So we invested in manufacturing early, and boy is that paid off. I mean, it's wonderful. Now you know what surgeon comes to us and has an idea on a new product or a new prototype, we have engineering in house, we can design it and prototype and in house, we have 3d printing, we can make a quick prototype, see if the concept works. And then we can just go right down to the manufacturing facility and present something almost in final form, sometimes in less than a week. That's, that's pretty impressive. It's a great luxury that we have and allows us to really keep pushing the timeline and pushing the edge of medicine.

Nick Talamantes  10:45  

So with this self contained medical hub that you're building in Wyoming, or is it strictly orthopedics? Can you go beyond that,

Joseph McGinley  10:54  

hey, you know, we don't put limits or boxes around ourselves. So at our manufacturing facility, when we upgraded everything, it became more high tech to be more automated. Because of that we had now downtime and availability on our machines. Right around then there was a big need for manufacturing here in the United States. So we're able to contract manufacturer, with other suppliers, even other big orthopedic companies had problems with their supply chain. And they approached us to make some of their products in our facility in Wyoming. So we do have an alternative revenue stream of products outside of medicine. We even make products for the mining industry. You know, we're in Wyoming. So mining is big. We make a lot of parts for HardRock Mining, our parts go up to Alaska and some of the gold mines, it's pretty impressive to see what we're able to produce from something very tiny that goes into a patient to something very large, that's going to a big mining rig up in Alaska. So full scale alternative revenue streams, it's great. The biggest problem with a manufacturing facility is when you get down there and you start washing machines work you never want to leave eats up your time.

Nick Talamantes  11:56  

That's brilliant. Well, you know, Boston, Minneapolis, and now

Joseph McGinley  12:00  

Casper, Wyoming. 

Nick Talamantes  12:01  

That's great. I love it in the US. You mentioned that you're also you've commercialized a risk play. Can you tell me a little bit more about that?

Joseph McGinley  12:10  

It brings us full circle as far as the story of McGinley orthopedics, our company was founded and started with a dinner discussion regarding a fracture of a wrist the head of screw that was too long, we develop the IntelliSense drill to sort of fix that problem. But then we came back and said, Well, you know, can we actually make the plating system better. And right now, the plating systems are essentially two dimensional. When you reduce a fracture, you put a plate on it and allow the bones to heal. What that depends on highly is the skill of the surgeon to make sure that that fracture is aligned correctly. So we partnered with a surgeon group, and we came up with a new idea on how to fix wrist fractures more dynamically. So we use engineering concepts to create a system that's three dimensional, which allows you to get all those fracture fragments just in the right spots, when it heals, it doesn't impede the motion of your wrist reduces the chance of arthritis can can help with pain reduction. And we just commercialize that about a year and a half ago. So it's been wonderful to see that come about. And now you know we're in the implant market. Wrist fractures are the most common fractures worldwide. So it is a big market. And we're the only system on the market that has a 3d solution protected by numerous patents. So we're excited about that complements the IntelliSense drill, the IntelliSense drill can be used in conjunction with this plating system. And for the patient. They're benefiting multifold in that particular situation. We're going to continue to innovate in the implant market. We have several other products that we're working on, that can help with fracture fixation and various parts of the body. And again, it's the complementary technologies that allow us to do that to say we're making one side of this equation better. Let's make both sides of that equation better.

Nick Talamantes  13:44  

I love hearing about the strategy that your company is executing. Joe, thank you so much for stopping by for this interview.

Joseph McGinley  13:50  

Appreciate it. Thanks