A New Zealand health tech company is after a larger share of the $205 billion global orthopaedic industry after earning a rare European certification that gives it an edge over competitors.
Christchurch-based Enztec makes orthopaedic equipment, precision instruments that surgeons around the world use in what is a booming industry. With an ageing population of Baby Boomers expecting knee and hip replacements to keep them mobile in their old age, the industry is expected to expand.
Regulations around the industry are extremely stringent with the European Union now requiring medical supply companies to achieve highly complex Medical Device Regulation (MDR) certification. It's a process that took Enztec more than 15,000 hours and one which has so far defeated most major competitors, giving the New Zealand company a major advantage.
Enztec's CEO Iain McMillan believes only two companies have achieved the highly sought-after certification worldwide.
"Sizeable multibillion-dollar companies are absolutely stunned that we have achieved it and they haven't. The scale of the opportunity for us is massive."
Those new opportunities include international companies, without MDR approval, approaching Enztec for help to complete the development of new orthopaedic instruments.
"They're giving us partially finished instruments and asking us to take them to the market," McMillan said.
"This is an absolute pipeline-opening event for us in terms of creating opportunities. Innovating in that regulatory space by being way ahead of the market is absolutely going to drive demand."
The company has experienced rapid growth over the past five years and, despite Covid-19, experienced 30 per cent growth this year with a turnover of $11 million. Most of that business is export – 40 per cent to North America, 20 per cent to Europe, 17 per cent to the UK and 20 per cent to Australia.
Enztec's next target market will be Asia, focusing on China, Singapore, South Korea and Japan. Cracking those markets will involve still more regulatory work, McMillan said, with every country taking a different approach.
"The Asian regulatory space is exceedingly complex."
Enztec made good use of the Covid-19 lockdown period, tasking staff to work on meeting the MDR certification involving thousands of pages of new regulations.
"It is a much more stringent control framework to stop patients having medical misadventures, keep patients safer and better outcomes."
It was a move that paid off, giving Enztec an advantage over its international competitors.
"It creates an extraordinary opportunity for us to ramp up supply of our orthopaedic surgical instruments and to get a jump-start on our competitors in the next one to two years," McMillan said.
The company has recently relocated to a 2000sq m factory and has invested $3m in new equipment. McMillan is about to hire his 70th staff member and expects to take on more by the end of the year.
Enztec originally made a wide range of surgical instruments when it launched 25 years ago but when the Baby Boomer growth market became obvious, the company narrowed its speciality to instruments used for hip, knee and shoulder surgery.
With an increasing number of complex surgical procedures available and a higher expectation of mobility as that generation aged, McMillan says the demand will continue to increase.
Enztec's instruments are in fact given away by large medical supply companies like Johnson & Johnson, and Smith & Nephew that supply orthopaedic joint parts.
Knee and hip implants had become commodities, he said.
"What makes a difference is how well the surgeons can put them into a patient. That's what gives patients really good outcomes."
Production of the instruments is "massively quality controlled", McMillan said.
Every instrument is designed to be sterilised and reused repeatedly. Engineers were constantly working on the designs to ensure the tools were more efficient, lighter, effective and easy to use.
Staff were sent around the world to observe the different techniques used by surgeons in different countries.
"A big part of our job is to understand those regional techniques."