Spine surgery is shifting away from traditional devices and toward biologics, a material that attracts cells to increase bone formation in spinal fusion procedures, according to Jeffrey Wang, MD, who is the University of California-Los Angeles spine service chief and director of UCLA's spine surgery fellowship. This shift has been gaining increasing momentum, as illustrated by the North American Spine Society’s (NASS) recent announcement of a record number of abstracts submitted for the NASS 38th annual meeting later this month.

As per the research findings, there are approximately 1.62 million instrumented spinal procedures performed annually in the United States. For investors looking for opportunities in this sector, there’s a little-known company that could be on track to capturing at least 800 of these monthly spine surgeries thanks to its unique product pipeline and strategic sales partners, making it the perfect company to put on your watchlist.

This company is HippoFi Inc. (OTC:ORHB), and through its wholly owned and primary subsidiary, PUR Biologics, the company has established a broad medtech product line with a focus on innovative spine and orthopedic solutions for bone growth, osteoarthritis, and cartilage regeneration.

At the moment, most regenerative medicine therapies use an extracellular matrix (ECM) along with many different cell types found within bone marrow and blood to replace, repair, and regenerate tissues. These therapies require obtaining many human tissues from donors, usually newborn foreskin fibroblasts, in order to manufacture human ECM. HippoFi Inc. (OTC:ORHB) scientists have been able to tap the power of Induced Pluripotent Stem Cells or IPSCs, to provide a safer source of cells from a single tested donor.

To put the company’s opportunity in better context, here’s what you need to know. The current spinal biologics market is estimated at $2.518 billion and is expected to surpass $3.5 billion by 2033. The upside here is that HippoFi's proprietary PURmarrow360 has the potential to really disrupt this market.

PURmarrow360, which will soon be launched throughout the United States, aims to provide a safe and simple surgical device specifically designed to selectively capture a patient's own bone marrow aspirate (BMA) and mesenchymal stem cells (MSCs). Surgeons can combine these valuable, patient-specific live cells with any allograft, allogenic, or synthetic bone substitute during surgery. The PURmarrow360 innovation is applicable to approximately 91.6% of the 1.62 million spinal fusions currently being performed in the US.

In addition to its core allografts and synthetics, HippoFi Inc.’s (OTC:ORHB) PUR Biologics recently received FDA 510(k) clearance for ActiveOrb technology, a Bone Marrow Aspirate Device (BMAD) solution designed for bone and cartilage growth, as well as a global license from Zimmer Biomet to use in the spine market. The companies are working under a joint commercialization research agreement to produce spine-specific products. This disruptive device technology solves the problems with centralized factories making immunotherapies that have driven costs to between $100,000 and $1,000,000 per treatment. ORHB’s therapies will cost significantly less since they do not require a centralized factory or complicated logistics.

Clearly, PUR’s product and technology portfolio are applicable to multiple large markets, providing the opportunity for continued growth, revenue, market leadership, and increased shareholder value. The company has a presence in the global medical device market, expected to reach $445.1 billion by 2026. With top categories in the US including hip, knee, and spine, among others, PUR is targeting three categories that represent a $48 billion market opportunity.

A deeper dive into the company reveals why it’s primed for significant revenue growth going forward. For starters, HippoFi Inc. (OTC:ORHB) has an exceptional sales track record. It delivered top sales in the country of Actifuse (Baxter) and Infuse rhBMP-2 (Medtronic) bone growth products, in addition to ISTO Biologics’ and Smith+Nephew’s biotherapeutics.

Sales are driven by ORHB's distributor connections, particularly with market leader Precision Spine. Precision Spine is one of the largest and most important players in the spine therapy market and has a major presence in the segment, historically selling a broad spine implant portfolio. The company’s 207 sales distributors now offer the complete PUR biologic line to 280 hospitals and roughly 340 spine surgeons, who perform 800 of these surgeries monthly.

However, HippoFi Inc.'s (OTC:ORHB) most recently awarded patent regarding technology that activates immune cells could prove to be the most valuable in the entire portfolio, considering that the market value of cancer immunotherapy in 2021 was $85.6 billion and is projected to be worth $271.84 billion by 2030. This newly issued patent launches PUR Biologics into the field of cell and immune therapies, ushering in a new era of medical treatments for patients with compromised immune systems and chronic pain conditions.

According to a report from Goldman Research, HippoFi Inc. (OTC:ORHB) could be on track to see revenue of $28 million for FY24E and $75 million in FY25E, driven by the current line and relationships, along with the timing of the 510(k) product and other in-licensed technology. If these revenue projections prove accurate, the ORHB’s CAGR for FY23–FY25 would be 195%. 

The analyst’s 12+ month price target is $0.37, which reflects 4.0x the forecasted $75 million in revenue for the FY25E period ending June 2025. This is in line with its peer group average of a forward 2024 price/revenue multiple of 4.0x.

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