BoneSupport, a Remarkable Growth Story in Healthcare

Uncover the potential of this promising Swedish small-cap

BoneSupport is at the forefront of innovation in bone health and orthopedic treatments. Founded in Sweden, this biomedical company is dedicated to developing and commercializing advanced bioactive bone graft substitutes that improve the quality of life for patients suffering from bone-related ailments.

This is currently one of the most impressive growth stories, with a 46% CAGR projected between 2023 and 2026. But what exactly does this company do? What are its products and future prospects? What risks and opportunities lie ahead? Let’s dive in and explore!

Company overview

The current product portfolio of the company revolves around CERAMENT. It is a synthetic bone void filler. There are currently 4 different types of CERAMENT products:

• CERAMENT Bone Void Filler. This product is used for bone defects and is designed to be replaced by natural bone over time.

• CERAMENT G. It Combines the bone void filler with gentamicin, an antibiotic, to prevent infections while promoting bone healing, especially in cases of bone infection.

• CERAMENT V. Similar to CERAMENT G but combined with vancomycin, another antibiotic, offering an alternative for infection management in bone defects.

• CERAMENT Bead Tray. It is a tray with beads of product for local delivery for surgeons. It is sterile and intended for single-use

The company reports 2 categories, CERAMENT CBVF (CERAMENT Bone Void Filler) and CERAMENT G+V. The first category also contains sales from application tools like the CERAMENT BEAD TRAY.

There are 2 major geographies for the company: North America (NA) and Europe + Rest of the World (EUROW).

From 2017 to 2022, the company achieved a robust revenue CAGR of 20.6%. However, the projected revenue CAGR for 2022 to 2026 is expected to soar to around 54%. This significant uptick in growth is largely driven by the North American market, particularly the success of the CERAMENT G product. Remarkably, CERAMENT G in North America wasn’t even on the market six quarters ago, yet it now accounts for approximately 40% of the company’s revenue.

The solid 28% growth in the EUROW region is completely overshadowed by the impressive 67% year-over-year growth in North America.

With hundreds of abstracts and studies conducted by scientists worldwide, CERAMENT is consistently outperforming its competitors, which explains its increasing market share.

Another important point: the gross profit margin exceeds 90%. Once fixed costs are covered, the net profit margin will significantly increase.

Total addressable market and market share

The company estimates the current Total Addressable Market (TAM) to be approximately 3.8 million procedures, excluding dental procedures.

Here is a breakdown of the company's market share in the extremities market at the end of 2023 (as it is not yet positioned in the spine segment):

• Europe. 2.4% of the 390,000 total procedures / 7.0% of the 132,000 synthetic procedures

• US. 2.9% of the 380,000 total procedures / 10.7% of the 103,000 synthetic procedures

The company is currently gaining market share and is growing faster than all the major orthobiologics companies.

Pipeline and growth opportunities

To fuel its growth, the company is heavily investing in R&D, with expenses increasing by 39% in Q2 2024 compared to the previous year.

The primary focus is on the Spine segment, which represents an even larger market than the Extremities segment, with 2.2 million procedures versus 1.5 million. Given the dynamism of the U.S. market, the first market authorization submission for Spine CERAMENT BVF will be in the U.S.

Another significant growth opportunity lies in the upcoming U.S. market authorization for CERAMENT V, expected in Q1 2025.

Additionally, the company is exploring new applications and combinations of CERAMENT to enhance its therapeutic effects.

These growth opportunities are further bolstered by positive tailwinds, including favorable patient demographics and a growing trend towards synthetic bone graft substitutes, where the company already holds a strong market share.

Before diving into the company's metrics, SWOT analysis, and fair price estimation, let's first address the primary risks associated with the company.

Key risks to consider