What changed in this filing

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Item 1. Business

2023-03-31 compared with 2022-03-11 · 94 added, 197 removed, 534 unchanged (35% of the section changed)

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• Pain Treatments is comprised of non-surgical joint pain injection therapies as well as peripheral nerve stimulation (“PNS”) products to help the patient get back to their normal activities.

• Surgical Solutions is comprised of bone graft substitutes (BGS) to fuse and grow bones, improve results following spinal and other orthopedic surgeries as well as ultrasonic medical devices used for precise bone sculpting, remove tumors and tissue debridement, in various surgeries including spine and neurosurgery;

• Restorative Therapies is comprised of an Ultrasonic bone healing system for fracture care, skin allografts and products used to support healing of chronic wounds as well as Advanced Rehabilitation devices designed to help patients regain leg or hand function due to stroke, multiple sclerosis or other central nervous system disorders and orthopedic conditions impacting extremity function.

• Surgical Solutions is comprised of bone graft substitutes (“BGS”) to fuse and grow bones, improve results following spinal and other orthopedic surgeries as well as minimally invasive ultrasonic medical devices used for precise bone sculpting, removing tumors and tissue debridement, in various surgeries.

• Restorative Therapies is comprised of a bone healing system, skin allografts and products used to support healing of wounds as well as devices designed to help patients regain leg or hand function due to stroke, multiple sclerosis or other central nervous system disorders.

Financial information regarding our reportable business segments is included in Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 14.

Segments of the Notes to the Consolidated Financial Statements within Part II, Item 8.

Financial Statements and Supplementary Data of this Annual Report.

Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 8.

Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 14.

Segments of this Annual Report.

Our verticals and the products within each vertical are described in additional detail below under “Our products.”

COVID-19 update and outlook

Refer to Part I, Item 1A.

Refer to Item 1A.

Risk Factors and Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of the effects of the global COVID-19 pandemic on our business in 2021 and of its expected impact in 2022 and beyond.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of the effects of the global COVID-19 pandemic on our business in 2021 and 2022.

Our growth strategy

We intend to pursue the following strategies to build a market-leading and customer-focused company centered on our three verticals, Pain Treatments, Surgical Solutions and Restorative Therapies, and to continue to grow our net sales and Adjusted EBITDA:

• Continue to expand market share in HA viscosupplementation .

• Continue to expand market share in Hyaluronic Acid (“HA”) viscosupplementation .

We intend to increase sales of our HA viscosupplementation therapies and extend our market leadership in this category by building on our unique positioning as the only company to offer a one, three and five injection treatment regimen.

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We intend to grow our presence in the surgical solutions market and expand our reach into the operating room in both ambulatory surgical centers (“ASCs”) and hospitals.

In the near-term, we plan to maintain and selectively expand our profitable product lines by adding to our U.S.

distributor base in an effort to reach significantly under-penetrated markets.

Over time, we intend to launch product line enhancements and invest in the development of next-generation surgical solution therapies to continue to grow our market share.

• Expand indications for use for our Exogen system .

We are focused on generating incremental clinical data and peer-reviewed publications to expand our indications and continue to grow our market leading share.

We are currently underway with the B.O.N.E.S.

clinical studies, which are aimed at generating data to support label expansion in additional bone types and expanded reimbursement for the treatment of fresh fractures in patients at risk of nonunion due to certain comorbidities, such as diabetes or obesity.

Table of Co n tents

In the near-term, we plan to maintain and selectively expand our profitable product lines by expanding our direct surgical sales team over time.

We intend to launch product line enhancements and invest in the development of next-generation surgical solution therapies to continue to grow our market share.

• Invest in research and development.

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We collaborate with academic centers of excellence, leading contract research organizations and other industry groups to complement and expedite execution of our research and development programs and minimize fixed costs.

• Pursue business development opportunities.

Consistent with our track record of acquisitions of Bioness and Misonix and strategic investments in CartiHeal and Trice Medical, we intend to continue to pursue business development opportunities in the medium term that leverage our significant customer presence across orthopedics, broaden our portfolio and increase our global footprint.

We will continue to search for clinically differentiated and cost-effective products and technologies that also balance our portfolio in terms of risk and time to market.

• Opportunistically grow our international markets.

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We plan to selectively expand to new markets and intend to pursue further opportunities in the Asia Pacific markets.

In particular, China represents an attractive and exciting market given its large and aging population as well as its rising middle class.

Misonix Acquisition

On October 29, 2021, we acquired Misonix, Inc.

(Misonix) in a cash-and-stock transaction (Misonix Merger).

Misonix manufactures minimally invasive surgical ultrasonic medical devices used for precise bone sculpting, removal of soft and hard tumors, and tissue debridement, primarily in the areas of neurosurgery, orthopedic surgery, plastic surgery, wound care and maxillo-facial surgery.

Misonix also exclusively distributes skin allografts and wound care products used to support healing of wounds.

At the closing of the Misonix Merger, we provided merger consideration totaling $525.3 million, including cash of $183.0 million, the issuance of 18,340,790 shares of our Class A common stock and the assumption or settlement of Misonix stock options having a value of $27.6 million.

The remaining consideration consisted of Misonix debt and other liabilities that benefited the seller which we repaid in full.

The acquisition includes the entire portfolio of Misonix products as well as its research and development pipeline.

The cash consideration was funded through taking on additional debt as well as the use of cash on hand.

Bioness Acquisition

On March 30, 2021, we acquired Bioness, Inc.

(Bioness), in a cash transaction (Bioness Merger).

Bioness is a global leader in neuromodulation and advanced rehabilitation medical devices through its innovative peripheral nerve stimulator (PNS) therapy and premium advanced rehabilitation solutions.

The Bioness Merger gives us access into two large and growing markets:

PNS and the advanced rehabilitation market.

We believe both of these markets offer attractive growth opportunities driven by demographic trends and the need for safe, effective, treatment options for the many patients suffering from post-surgical pain, stroke, multiple sclerosis, traumatic brain injury, spinal cord injury and cerebral palsy.

We estimate Bioness medical devices address total global market opportunities approaching $8 billion per year.

Bioness advanced rehabilitation solutions have a broad portfolio of offerings, including proprietary electrical stimulation exoskeletal devices for both the upper and lower extremities, robotic gait and fall safety systems, and high-tech, interactive software learning and recovery assessment platforms.

These products play an essential role in helping patients regain mobility due to stroke, traumatic brain injury, multiple sclerosis and osteoarthritis, and are used by physical or occupational therapists in a clinical setting or by the patient at home, with the guidance of a clinician through telemedicine.

Bioness PNS Systems are designed to help patients suffering from pain after surgery on an extremity, which affects over 16 million patients each year globally.

As consideration for the Bioness Merger, we paid $48.9 million in cash at closing and we expect to pay an additional $15.5 million of contingent consideration related to the achievement of certain key milestones.

The acquisition included the entire portfolio of Bioness products as well as its research and development pipeline.

The up-front consideration was funded exclusively through the use of cash on hand.

For additional information regarding the Misonix and Bioness Mergers, including associated risks and uncertainties, refer to Part I, Item 1A.

Risk Factors—Risks related to our business — We may be unable to complete proposed acquisitions or to successfully integrate proposed or recent acquisitions in a cost-effective and non-disruptive manner and Note 4.

Acquisitions and investments of the Notes to the Consolidated Financial Statements within Part II, Item 8.

Financial Statements and Supplementary Data included in this Annual Report.

Table of Co n tents

We offer a diverse portfolio of products to serve physicians spanning the orthopedic continuum, including sports medicine, total joint reconstruction, hand and upper extremities, foot and ankle, podiatric surgery, trauma, spine and neurosurgery, in the physician’s office or clinic, ASCs or in the hospital setting.

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Pain Treatments

Our joint Pain Treatment products are non-surgical alternatives created to work with the body’s biological processes, providing a natural lubricant into the joint that relieve mild to moderate pain, improves mobility, and helps the patient get back to their normal activities.

Our joint Pain Treatment products include peripheral nerve stimulation (“PNS”) and hyaluronic acid-based (“HA”) products for knee osteoarthritis.

Our HA products are designed to work with the body’s biological processes, providing a natural lubricant into the joint, that relieve mild to moderate pain, improves mobility, and helps the patient get back to their normal activities.

Our PNS product targets peripheral nerve pain at its source without drugs and its small profile allows the system to be implanted in many locations on the body, depending on patient needs.

Durolane is an FDA-approved sterile, transparent and viscoelastic gel that is a single injection therapy that is indicated in the United States for the symptomatic treatment of OA in the knee in patients who have failed to respond adequately to conservative non-pharmacological therapy and simple analgesics.

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We currently market GELSYN-3 in the United States.

SUPARTZ FX is an FDA-approved sterile and viscoelastic solution of HA that is administered as a five injection HA viscosupplementation therapy.

SUPARTZ™ is an FDA-approved sterile and viscoelastic solution of HA that is administered as a five injection HA viscosupplementation therapy.

It is indicated for the treatment of pain in patients with knee OA who failed to adequately respond to conservative nonpharmacological therapy and simple analgesics.

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We currently market SUPARTZ FX in the United States.

Table of Co n tents

Our PNS system is a permanent option that provides relief for chronic peripheral pain including:

Our StimRouter® Peripheral Nerve Stimulation (“PNS”) system is a permanent option that provides relief for chronic peripheral pain including:

Nerve Pain, Neuroma, Neuropathic Pain, Post-Stroke Shoulder Pain and Neuralgia.

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StimRouter is programmed with up to eight different stimulation programs from which the patient is able to select, turn off/on and increase or decrease the stimulation intensity.

Development and clinical pipeline for Pain Treatments (including investments)

We continue to look for and execute on opportunities to expand our Pain Treatments portfolio through business development, product extensions and new market development.

An off-the-shelf aragonite implant designed for implantation into osteochondral defects in the knee currently under development by CartiHeal (2009) Ltd.

(CartiHeal), which is subject to our exclusive rights as described below.

The Agili-C implant received breakthrough device designation from the FDA in the fourth quarter of 2020.

We believe Agili-C is the only product in clinical development in the United States as an off-the-shelf scaffold implant that is designed to regenerate hyaline cartilage and subchondral bone simultaneously.

The associated surgical procedure is similar to osteochondral allograft implantation, but is a single-step process and is easier, faster and more cost-effective.

We believe this is the first cartilage repair technology to be tested in trials designed for regulatory approval in the United States in non-OA and OA patients, potentially unlocking applications for millions of patients with knee OA and cartilage defects.

We also believe Agili-C will enable the treatment of cartilage lesions in a significant population of OA patients, including those younger, active patients for whom available treatment options are limited.

We believe the FDA’s grant of breakthrough device designation in the fourth quarter of 2020 for the treatment of an International Cartilage Repair Society (ICRS) grade III or above knee-joint surface lesions(s), with a total treatable area of 1-7cm2, without severe osteoarthritis (Kellgren-Lawrence grade 0-3) is a promising development, as such designation may help patients receive more timely access to Agili-C by potentially expediting its development, assessment and review by the FDA.

On January 12, 2021, the Centers for Medicare and Medicaid Services (CMS) issued a final rule under which a breakthrough device designation by the FDA also provides a streamlined pathway to national Medicare coverage for a period of four years, beginning as early as the FDA approval for the product.

In November 2021, however, CMS rescinded this rule in its entirety, and stated that it plans to work with the FDA and other stakeholders to develop a new process to cover innovative devices that benefit Medicare patients.

We believe Agili-C may also have the potential for broader indications for use in other joints, providing entrance into the global market for cartilage repair products.

On July 15, 2020, we entered into an Option Equity Purchase Agreement (Option Agreement) and made a $15.0 million equity investment in CartiHeal, a privately-held company headquartered in Israel and developer of the proprietary Agili-C implant for the treatment of joint surface lesions in traumatic and osteoarthritic joints.

CartiHeal submitted the non-clinical module of the PMA in January 2021 and submitted the final, clinical module of a Modular PMA in the August 2021 seeking FDA approval.

In September 2021, CartiHeal achieved pivotal clinical trial success, as defined in the Option Agreement, for Agili-C.

In accordance with the Option Agreement and upon Board of Director approval, we deposited $50.0 million into escrow for the potential acquisition of CartiHeal.

If additional support is needed to complete the CartiHeal product study in response to FDA feedback, we will purchase an additional 338,089 of CartiHeal Series G Preferred Shares for $5.0 million.

We have an exclusive option to acquire the remaining equity in CartiHeal, which may be exercised at any time up to and within 45 days following notice of the FDA approval for Agili-C.

In addition, upon the same FDA approval, CartiHeal may exercise an option within 45 days that requires us to complete the acquisition of the remaining equity in CartiHeal.

A placental tissue injectable biologic for knee OA currently in clinical development.

Based on our preclinical evidence, we believe the MOTYS formulation holds potential for mitigating OA joint pain while protecting damaged cartilage and promoting anti-catabolic and pro-anabolic events that could ultimately result in delayed disease progression in OA.

We have completed extensive in vitro and in vivo studies comparing the effect of MOTYS to the clinical standard of care (steroid injections).

In these preclinical studies, MOTYS provided non-inferior pain relief effects to a steroid and showed superiority in protecting cartilage and in promoting new tissue formation.

Table of Co n tents

We began selling MOTYS in the cash pay market during the fourth quarter of 2020 as human cells, tissues and cellular and tissue-based product (HCT/P) pursuant to a temporary FDA policy of enforcement discretion.

Following the end of this temporary enforcement discretion policy on May 31, 2021, we were required to cease selling MOTYS and will not be able to resume sales of MOTYS in the United States unless and until such time as we obtain approval of a Biologics License Application (BLA).

Following completion of necessary clinical trials, we plan to pursue submission and approval of the required BLA for this product.

On October 29, 2020, we received FDA allowance to proceed with clinical studies under our investigational new drug application (IND).

We began randomized clinical trials for MOTYS in the first quarter of 2021 to support submission of a potential BLA to the FDA for the use of MOTYS in pain treatments.

We have completed enrollment and 6 months follow-up of all patients in our Phase I study with no material safety findings as assessed by an independent clinical safety review board.

Expected completion of this 12 month study is the fourth quarter of 2022.

In parallel, we have initiated an international Phase II dose finding clinical investigation.

Following national and local regulatory approvals, recruitment has started in Canada and Australia.

Study completion is expected in the first quarter of 2023.

An investigational bio-inductive collagen implant for regeneration of tendon tissue in the rotator cuff.

Preclinical evidence developed in a sheep model suggest that the material was well tolerated, rapidly integrated and promoted the formation of new tendon tissue at the bone tendon interface.

Further to those encouraging findings, we have initiated a pivotal Good Laboratory Practices sheep implantation study through a collaboration with a prominent academic investigator.

The results of this study, together with other ongoing test results, will be part of the request for 510(K) clearance submission, planned for the fourth quarter of 2022.

On August 23, 2019, we entered into an exclusive Collaboration Agreement with Harbor Medtech Inc.

(Harbor) to develop and license the rights to commercialize a woven-suture-collagen composite implant product, PROcuff, for the regeneration of tendon tissue.

This Collaboration Agreement was terminated on June 8, 2021, and we have acquired all rights to the product.

Developmental and clinical pipeline for Pain Treatments

The TalisMann® Pulse Generator and Receiver (not yet cleared by FDA) is an accessory to the StimRouter® PNS system and is designed to provide more powerful stimulation to the targeted peripheral nerve, potentially enabling physicians to address chronic pain of a peripheral nerve origin in larger, deeper, or damaged nerves.

TalisMann has a small profile and is attached to the StimRouter lead intraoperatively and pocketed under the skin after the StimRouter lead electrodes are placed near the targeted peripheral nerve.

Trice Medical, Inc.

On August 23, 2021, we made a strategic investment in Trice Medical, Inc.

Trice is a privately held company that develops and commercializes minimally invasive technologies for sports medicine and orthopedic surgical procedures.

Trice combines its handheld arthroscope and portable ultrasound visualization technologies with its surgical devices to treat a range of sports medicine and orthopedic conditions, including tendinopathy, planter fasciitis and carpel tunnel, in order to improve patient recovery time, reduce pain, minimize scarring and move surgical procedures out of higher cost points of care.

Trice’s established and growing presence in sports medicine and orthopedics is directly aligned with our strategy of expanding our offerings.

Our investment resulted in exclusive sales and distribution rights to Trice’s products outside of the U.S.

and a seat on the Trice board of directors.

We also entered into a co-development arrangement to explore the integration of Trice technologies with our current and future PNS products in order to accelerate the adoption of both of our products.

Surgical Solutions

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Our products are designed to improve bone fusion rates following spinal and other orthopedic surgeries, including trauma and reconstructive foot and ankle procedures.

Our portfolio is also comprised of minimally invasive surgical ultrasonic medical devices.

Our portfolio is also comprised of surgical ultrasonic systems.

These products are used for precise bone sculpting, removal of soft and hard tumors, and tissue debridement, primarily in the areas of neurosurgery, orthopedic surgery, plastic surgery, wound care and maxillo-facial surgery.

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OSTEOAMP is an allogeneic bone graft that is available in multiple formats (fibers, putty, sponge and granules) that is processed with bone marrow cells to maintain the wide array of growth factors present in native bone.

We currently market OSTEOAMP in the U.S.

We currently market OSTEOAMP in the United States.

We launched OSTEOAMP Flowable in 2021, which is designed to be moldable and easy to use, with a convenient, ready to use syringe.

Additionally, a customized cannula-based delivery system is currently in development, which will enhance handling properties of the device further enabling use in minimally invasive surgical procedures.

FDA 510K submission for this device is planned for the fourth quarter of 2023.

EXPONENT provides an osteoconductive scaffold with osteoinductive potential while providing optimal handling characteristics indicated for posterolateral spine procedures.

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EXPONENT is highly malleable and easy to mold and pack into the surgical defect.

Donor bone is sourced from AATB-certified and FDA-registered tissue banks in the U.S.

Donor bone is sourced from AATB-certified and FDA-registered tissue banks in the United States.

All tissues are screened for the standard panel of infectious viruses.

We currently market EXPONENT in the U.S.

Table of Co n tents

We currently market EXPONENT in the United States.

PUREBONE provides a natural osteoconductive scaffold that facilitates cellular ingrowth and revascularization which is indicated for orthopedic, neurosurgical and reconstructive bone grafting procedures.

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Demineralized PUREBONE formats provide osteoinductive potential to recruit and differentiate bone-forming cells.

Donor bone is sourced from AATB-certified and FDA-registered tissue banks in the U.S.

Donor bone is sourced from AATB-certified and FDA-registered tissue banks in the United States.

All tissues are screened for the standard panel of infectious viruses.

We currently market PUREBONE in the U.S.

We currently market PUREBONE in the United States.

SIGNAFUSE contains a synergistic combination of biomaterials that supports new bone formation which is indicated for standalone posterolateral spine, extremities and pelvis, as well as a bone graft extender in the posterolateral spine.

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The unique and synergistic combination of biomaterials in SIGNAFUSE is designed to help accelerate cellular activity and kickstart osteogenesis.

We currently market SIGNAFUSE in the U.S.

We currently market SIGNAFUSE in the United States.

INTERFACE is designed to facilitate a rapid biologic response that stimulates the bone healing process and is used for posterolateral spine when mixed with autograft, extremities and pelvis.

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INTERFACE is packed in a sterile, single use vial.

We currently market INTERFACE in the U.S.

We currently market INTERFACE in the United States.

OSTEOMATRIX+ is a synthetic bone graft with exceptional handling, rapid hydration and a biphasic composition for sustained performance used on the posterolateral spine, extremities and pelvis.

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Three-dimensional micropores enhance the flow and circulation of biological fluids.

We currently market OSTEOMATRIX+ in the U.S.

Table of Co n tents

We currently market OSTEOMATRIX+ in the United States.

CELLXTRACT is a bone marrow aspirate without dilution or centrifugation.

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CELLXTRACT, on the other hand, only requires one insertion point minimizing the risks to the patient.

We currently market CELLXTRACT in the U.S.

We currently market CELLXTRACT in the United States.

EXTRACTOR is a complementary and cost-effective solution designed to add needed cells and signals to aid in bone healing.

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An ergonomically designed handle allows the clinician to apply consistent pressure for greater control.

We currently market EXTRACTOR in the U.S.

We currently market EXTRACTOR in the United States.

Reficio Demineralized Bone Matrix (“Reficio DBM”) is a putty comprised of human demineralized bone matrix and a biocompatible bioabsorbable carrier, carboxymethylcellulose, mixed into a putty-like consistency for ease in surgical use.

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Reficio DBM can be used for extremities, posterolateral spine and pelvis.

neXus is a next generation integrated ultrasonic surgical platform that combines all the features of our existing solutions, including BoneScalpel, SonicOne and SonaStar, into a single fully integrated platform that we believe will also serve to power future solutions.

The neXus platform is driven by a new proprietary digital algorithm that results in more power, efficiency, and control.

The device incorporates Smart Technology that allows for easier setup and use.

neXus’ increased power has the potential to improve tissue resection rates for both soft and hard tissue removal, which we believe makes it a unique surgical platform for a variety of different surgical specialties.

The neXus Ultrasonic Surgical System (“neXus”) is a next generation integrated ultrasonic surgical platform that combines all the features of our existing solutions, including BoneScalpel, SonicOne and SonaStar, into a single fully integrated system that serves to power future solutions.

The neXus platform is driven by a proprietary digital algorithm that results in more power, efficiency, and control for the surgeon.

The device incorporates technology that allows for intuitive setup and use.

The neXus system allows for safe and efficient resection of hard and soft tissue, limiting collateral damage to adjacent tissue than conventional surgical instruments, and can be used in a variety of different surgical specialties.

In addition, neXus’ ease of use enables physicians to fully leverage neXus’ capabilities via its digital touchscreen display and smart system setup.

Our current ultrasonic applications, which are BoneScalpel, SonaStar and SonicOne, all work on the neXus generator.

Our current ultrasonic applications, which include BoneScalpel, BoneScalpel Access™, Sonastar and SonicOne, all work on the neXus generator.

This allows a hospital to access all of our product offerings on this all-in-one console.

We principally sell neXus in the U.S.

Table of Co n tents

The BoneScalpel is a state of the art, ultrasonic bone cutting and sculpting system capable of enabling precise cuts with minimal necrosis, minimal burn artifact, minimal inflammation and minimal bone loss.

The neXus Ultrasonic Aspirator System has been commercialized successfully in the United States, Canada, Europe and Australia.

The BoneScalpel® is a state of the art, ultrasonic surgical system capable of enabling precise cutsin hard tissue (e.g.

The device is also capable of preserving surrounding soft tissue structures because of its ability to differentiate soft tissue from rigid bone.

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We believe the BoneScalpel allows surgeons to improve on existing surgical techniques by creating new approaches to bone cutting, sculpting, and removal, leading to substantial time-savings and increased operation efficiencies.

In addition to BoneScalpel, the Company received 510(k) clearance for its neXus ® BoneScalpel ® Access ™ system in December 2021.

Specifically, the BoneScalpel Access handpiece and its accessories provides surgeons with a new option for confined spaces during minimally invasive surgery, enabling safe and powerful bone removal with maximum visualization.

In addition, BoneScalpel Access allows for en-bloc resection and the shaving and sculpting of bone, with built-in irrigation and aspiration with improved ergonomics for the end user.

The BoneScalpel Access handpiece represents best-in-class among ultrasonic surgical platforms, and surgeon feedback following the U.S.

market roll out has been positive.

The SonaStar System provides powerful and precise aspiration following the ultrasonic ablation of soft tissue.

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The SonaStar may also be used with OsteoSculpt ® probe tips, which enable the precise shaping or shaving of bony structures that prevent open access to partially or completely hidden soft tissue masses.

In addition to SonaStar, the Company received FDA 510K approval in July 2022 for its neXus ® SonaStar Elite ® handpiece and accessories, which combines all the features of soft and hard (including bone) tissue removal into a single fully integrated platform capable of operating at multiple frequencies, including the newly approved 36 kHz SonaStar Elite Handpiece.

While the neXus system can be used in many clinical applications including neurosurgery, the SonaStar Elite handpiece has been cleared for resection of tumors with varying consistencies ranging from soft to firm, including the removal of malignant and benign brain and spinal tumors.

The SonaStar Elite handpiece represents the latest innovation in our neXus ultrasonic surgical pipeline.

Launch of the product is planned for the fourth quarter of 2023.

Developmental and clinical pipeline for Surgical Solutions (including investments)

As we build the body of clinical evidence supporting our products, we continue to look for and execute on opportunities to innovate in our Surgical Solution portfolio.

To meet growing market demand and evolving surgical techniques, we continue to develop product extensions and adjust formulations on all of our surgical technology platforms, including developing new presentations of OsteoAMP, and further refining the Bonescalpel and Sonastar technologies to expand our ability to serve evolving surgical techniques.

On August 23, 2021, we made a strategic investment in Trice Medical, Inc.

Trice is a privately held company that develops and commercializes minimally invasive technologies for sports medicine and orthopedic surgical procedures.

Trice combines their handheld arthroscope and portable ultrasound visualization technologies with its surgical devices to treat a range of sports medicine and orthopedic conditions, including tendinopathy, planter fasciitis and carpel tunnel, in order to improve patient recovery time, reduce pain, minimize scarring and move surgical procedures out of higher cost points of care.

Trice’s established and growing presence in sports medicine and orthopedics is directly aligned with our strategy of expanding our offerings.

Our investment resulted in exclusive sales and distribution rights to Trice’s products outside of the U.S.

and a seat on the Trice board of directors.

To meet growing market demand and specifically the needs of surgeons, we continue to develop product extensions on all of our surgical technology platforms, including OsteoAmp and the neXus platform.

Restorative Therapies

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Our Restorative Therapies product portfolio is also comprised of Advanced Rehabilitation devices designed to help patients regain leg or hand function due to stroke, multiple sclerosis or other central nervous system disorders.

Table of Co n tents

EXOGEN® is an ultrasound bone healing system for the non-invasive treatment of established nonunion fractures and certain fresh fractures.

A nonunion fracture is considered to be established when the fracture site shows no visibly progressive signs of healing.

EXOGEN has been sold commercially for over 25 years and is the only FDA-approved device on the market for the accelerated healing of fresh, closed posteriorly displaced distal fractures of the radius and fresh, closed or grade I open long bone fractures.

EXOGEN has been sold commercially for over 25 years and is FDA-approved for the accelerated healing of fresh, closed posteriorly displaced distal fractures of the radius and fresh, closed or grade I open long bone fractures.

EXOGEN utilizes low-intensity pulsed ultrasound technology to stimulate the body’s natural bone healing process.

EXOGEN is used to administer treatment in a location of convenience with an easy to use interface that tracks treatment use and promotes compliance.

EXOGEN is indicated in the U.S.

EXOGEN is indicated in the United States.

for the non-invasive treatment of established nonunions, excluding skull and vertebra, and for accelerating the time to a healed fracture for fresh, closed, posteriorly displaced distal radius fractures and fresh, closed or Grade I open long bone fractures in skeletally mature individuals when these fractures are orthopedically managed by closed reduction and cast immobilization.

EXOGEN is marketed in the U.S., Canada, Europe and Japan.

EXOGEN is marketed in the United States., Canada, Europe and Japan.

EXOGEN is also approved for marketing in Australia, New Zealand, Saudi Arabia, Turkey and the UAE.

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TheraSkin is used on all external skin tissue wounds, including but not limited to difficult to heal diabetic foot ulcers, venous leg ulcers, dehisced surgical wounds, necrotizing fasciitis, burns, Mohs and wounds with exposed structures.

Therion is used as a cover and barrier for homologous use for wound care and surgical procedures.

Therion is a dehydrated and terminally sterilized chorioamniotic allograft derived from human placental membrane and is an HCT/P.

CryoLife processes and supplies Therion to us under a supply and distribution agreement that gives us exclusive rights to distribute the product in the United States.

CryoLife produces Therion using a proprietary process that removes the maternal-derived decidua cells from the placental membrane, leaving the amnion and chorion layers in their native configuration.

TheraGenesis ® is a Bilayer Wound Matrix and Meshed Bilayer Wound Matrix consisting of a porcine collagen sponge layer and a silicone film layer that provides a scaffold for cellular invasion and capillary growth for management of wounds including partial and full-thickness wounds, chronic wounds, surgical wounds, trauma wounds and draining wounds.

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We believe that SonicOne establishes a new standard in wound bed preparation, the essential first step in the healing process, while contributing to a faster patient healing.

Table of Co n tents

L300 GO is a functional electrical stimulation that produces measurable mobility improvements for patients living with foot drop and thigh weakness.

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Developmental and clinical pipeline for Restorative Therapies

In order to evaluate the effectiveness of EXOGEN in mitigating the risk of progression to fracture nonunion, and in an effort to obtain regulatory approval for expanded indications, we are seeking to supplement the body of clinical knowledge in an innovative population-based clinical development program, B.O.N.E.S., which stands for Bioventus Observational Non-interventional EXOGEN Studies.

The B.O.N.E.S.

clinical study design includes the parallel conduct of three independent study protocols which, taken together, are designed to prospectively include more than 3,000 EXOGEN-treated patients presenting with certain risk factors to be observed over time and propensity matched to one or more untreated controls extracted from a real-world health claims database provided by Truven Healthcare Analytics, generating a total sample size of at least 6,000 patients.

The program involves the concurrent execution of three studies on pre-specified anatomical locations, such as the tibia, scaphoid and fifth metatarsal, with the objective of determining if the use of EXOGEN mitigates risk of fracture nonunion in predisposed patients.

Table of Co n tents

We submitted a supplemental PMA to the FDA in December 2020 seeking approval of an expanded indication for EXOGEN, specifically, for the adjunctive treatment of acute and delayed metatarsal fractures to reduce the risk of non-union.

This PMA supplement was based on and supported by clinical data in metatarsal fractures from the ongoing B.O.N.E.S.

In April 2021, we received a letter from the FDA identifying certain deficiencies in the PMA supplement that must be addressed before the FDA can complete its review of the PMA supplement.

The deficiencies include concerns about the data and endpoints from the B.O.N.E.S.

study, and requests for re-analyses of certain data and provision of other information to support the findings.

We are in the process of performing re-analysis of the data as requested by the FDA and are remaining engaged in discussions with the FDA to address the agency’s concerns.

In addition, in December 2021, we completed the follow up of all patients in the scaphoid fracture portion of the B.O.N.E.S.

We plan on submitting a PMA supplement for this indication in the fourth quarter of 2022.

We can give no assurance that we will be able to resolve the deficiencies identified by the FDA in a timely manner, or at all.

Consequently, the FDA’s decision on the PMA supplements may be delayed beyond the time originally anticipated.

Moreover, if our responses do not satisfy the FDA’s concerns, the FDA may not approve our PMA supplements seeking to expand the indications for use of EXOGEN in metatarsal and scaphoid fractures as proposed.

Sales and marketing

Our expansive direct sales and distribution channel across our product portfolio provides us with broad and differentiated customer reach, and allows us to serve physicians spanning the orthopedic continuum, including sports medicine, total joint reconstruction, hand and upper extremities, foot and ankle, podiatric surgery, trauma, spine and neurosurgery.

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Our sales team and distributors work directly with our physician customers on a frequent basis.

Product revenue

Products from our Pain Treatments, Restorative Therapies and Surgical Solutions verticals are sold by direct sales teams in the United States and a complementary distributor team for Surgical Solutions.

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(Johnson & Johnson), and Sanofi S.A, OrthogenRx Inc.

and for peripheral nerve stimulation specifically.

we compete with SPR Therapeutics, Nalu and Stimwave.

and for peripheral nerve stimulation specifically we compete with SPR Therapeutics, Nalu and Stimwave.

Our Surgical Solution products compete with products from Medtronic, DePuy Orthopaedics, Inc.

(Johnson & Johnson), Stryker Corporation, NuVasive, Inc., SeaSpine, Inc., Orthofix Medical Inc., Zimmer Biomet Holdings, Inc.

(Johnson & Johnson), Stryker Corporation, NuVasive, Inc., Orthofix Medical Inc., Zimmer Biomet Holdings, Inc.

and Globus Medical Inc., Johnson & Johnson, Integra Life Sciences, Inc., and Söering.

Our Restorative Therapies compete with products marketed by Orthofix Medical Inc., Zimmer Biomet Holdings, Inc., DJO Global Inc., MiMedx, Integra Life Sciences, Organogenesis, Hanger Orthopedics, XFT Medical, Rewalk Robotics, Ekso Bionics, Aretech LLC and DIH Medical.

Our Restorative Therapies compete with products marketed by Orthofix Medical Inc., Zimmer Biomet Holdings, Inc., Enovis, MiMedx, Integra Life Sciences, Organogenesis, Hanger Orthopedics, XFT Medical, Rewalk Robotics, Ekso Bionics, Aretech LLC and DIH Medical.

We strive to protect and enhance the proprietary technologies, inventions and improvements that we believe are important to our business, including seeking, maintaining and defending patent rights, whether developed internally or licensed from third-parties.

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We also rely on trademarks, trade secrets and careful monitoring of and contractual obligations with respect to our proprietary information to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

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Patents, trade secrets, assignments and licenses

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Although in the aggregate our intellectual property is of material importance to our business, we do not believe that any single patent is of material importance to our product portfolio.

As of December 31, 2021, we owned forty-five issued U.S.

patents and twelve pending U.S.

As of December 31, 2022, we owned 113 issued U.S.

patents and nine pending U.S.

patent applications relating to our material products.

We also owned seventy-five issued foreign patents and thirty-eight pending foreign patent applications directed to our material products.

We also owned 161 issued foreign patents and 50 pending foreign patent applications directed to our material products.

Our patents and patent applications as of December 31, 2022 directed to our material products are summarized below.

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patents are expected to expire between 2025 and 2029, and the foreign patent is expected to expire in 2025.

We own one issued U.S.

patent, one pending U.S.

patent application, eight issued foreign patents, and ten pending foreign patent applications directed to our OsteoAMP product, including foreign patents and patent applications in Europe, Asia, Canada and Australia.

We own two issued U.S.

patents, ten issued foreign patents, and eight pending foreign patent applications directed to our OsteoAMP product, including foreign patents and patent applications in Europe, Asia, Canada and Australia.

The issued U.S.

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We also own ten issued U.S.

patents and ten issued foreign patents in Australia, Canada, Europe, and Japan directed to our StimRouter system.

patents and twelve issued foreign patents in Australia, Canada, Europe, and Japan directed to our StimRouter system.

patents are expected to expire between 2026 and 2031, and the foreign patents are expected to expire between 2028 and 2030.

We also own twenty-one issued U.S.

patents, three pending U.S.

patent applications, forty-three issued foreign patents, and eight pending foreign patent applications directed to our L300 system, including foreign patents and patent applications in Australia, Canada, Europe, and Japan.

We also own twenty-two issued U.S.

patents, two pending U.S.

patent applications, fifty-one issued foreign patents, and five pending foreign patent applications directed to our L300 system, including foreign patents and patent applications in Australia, Canada, Europe, and Japan.

patents are expected to expire between 2026 and 2037, and the foreign patents are expected to expire between 2026 and 2037.

The pending patent applications, if issued, are expected to expire between 2026 and 2037, without accounting for potential patent term extensions and adjustments.

We also own eight issued U.S.

patents, six pending U.S.

patent applications, twelve issued foreign patents, and thirteen pending foreign patent applications directed to our Vector Gait and Safety System, including foreign patents and patent applications in in Australia, Canada, Europe, and Japan.

We also own fourteen issued U.S.

patents, three pending U.S.

patent applications, sixteen issued foreign patents, and nine pending foreign patent applications directed to our Vector Gait and Safety System, including foreign patents and patent applications in in Australia, Canada, Europe, and Japan.

patents are expected to expire between 2033 and 2038, and the foreign patents are expected to expire between 2034 and 2036.

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patent and one pending U.S.

patent application and five pending foreign patent applications directed to our TalisMann product, including foreign patent applications in Australia, Canada, Europe, Japan and one pending Patent Cooperation Treaty application.

patent application and four pending foreign patent applications directed to our TalisMann product, including foreign patent applications in Australia, Canada, Europe, Japan and one pending Patent Cooperation Treaty application.

patent is expected to expire in 2039.

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patent applications directed to our BoneScalpel product.

Our patents and pending patent applications directed to our material products are further detailed in Exhibit 99.1 to this Annual Report on Form 10-K.

We own registered trademarks for Bioventus, Bioness, BITS, Bonescalpel, Cellxtract, Durolane, Exogen, Exponent, Gelsyn-3, LiveOn, L300 Go, Misonix, Ness, Ness L300, Nexus, OsteoAMP, Osteofuse, Prohesion, PureBone, SAFHS, Signafuse, Sonastar, StimRouter, TheraSkin, Therion and Vector Gait and Safety System in the United States.

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Our patents and pending patent applications directed to our material products are further detailed in Exhibit 99.1 to this Annual Report.

We own registered trademarks for Bioventus, Bioness, BITS, Bonescalpel, BoneScalpel Access, Cellxtract, Durolane, Exogen, Exponent, Gelsyn-3, LiveOn, L300 Go, Misonix, Ness, Ness L300, neXus, OsteoAMP, Osteofuse, Prohesion, PureBone, SAFHS, Signafuse, Sonastar, SonaStar Elite, StimRouter, TheraSkin, Therion and Vector Gait and Safety System in the United States.

Trade secrets

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Our manufacturing facilities and processes are subject to periodic inspections and audits by various federal, state and foreign regulatory agencies.

Our products include components manufactured by other companies in the United States.

Our products include components manufactured by other companies in the United States and elsewhere.

Some of our products and product components are manufactured exclusively by single-source third-party manufacturers, pursuant to multi-year supply agreements and may include minimum order volumes.

We work closely with each of our manufacturing partners and provide them with a forecast, which enables them to better capacity plan and sequence their production efficiently.

We partnered with and MTF exclusively manufactured and supplied MOTYS to us while we pursue a BLA for the product.

MTF was responsible for obtaining and storing all materials, including all tissue materials, required for the manufacture, testing, handling, packaging, labeling, release and delivery of the product to us.

We may encounter difficulty in obtaining materials, supplies and components adequate for our anticipated short-term needs.

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The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, and import and export of medical devices and biological products to ensure that such products distributed domestically are safe and effective for their intended uses and otherwise meet the applicable requirements of the FDCA and PHSA.

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Regulation of Medical Devices

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The FDA’s 510(k) clearance process usually takes from three to twelve months, but often takes longer.

FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence.

The FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence.

In addition, the FDA collects user fees for certain medical device submissions and annual fees for medical device establishments.

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If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate approval from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping requirements.

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In addition to clinical and preclinical data, the PMA must contain a full description of the device and its components, a full description of the methods, facilities, and controls used for manufacturing, and proposed labeling.

Following receipt of a PMA, the FDA determines whether the application is sufficiently complete to permit a substantive review.

If FDA accepts the application for review, it has 180 days under the FDCA to complete its review of a PMA, although in practice, the FDA’s review often takes significantly longer, and can take up to several years.

If the FDA accepts the application for review, it has 180 days under the FDCA to complete its review of a PMA, although in practice, the FDA’s review often takes significantly longer, and can take up to several years.

An advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the approvability of the device.

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• post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.

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Certain of our products are regulated as HCT/P.

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The guidance also indicated that the FDA would exercise enforcement discretion, using a risk-based approach, with respect to the IND application and pre-market approval requirements for certain HCT/Ps that had been marketed without marketing authorization, including, among others, lyophilized amniotic products, for a period of 36 months from the issuance date of the guidance to allow manufacturers to pursue INDs and/or seek marketing authorizations.

Under this approach, FDA indicated that high-risk products and uses could be subject to immediate enforcement action.

Under this approach, the FDA indicated that high-risk products and uses could be subject to immediate enforcement action.

In July 2020, the FDA extended its period of enforcement discretion to May 31, 2021.

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Regulation of Drugs and biological products

Certain of our products or product candidates, such as MOTYS, are regulated by the FDA as drugs or biological products, also called biologics.

In the United States, the FDA regulates drugs under the FDCA, and its implementing regulations, and biologics under the FDCA and the PHSA and their implementing regulations.

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• FDA review and approval of the BLA or NDA to permit commercial marketing of the product for particular indications for use in the United States.

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Prior to beginning clinical trials of a new drug or biologic product in the United States, an IND must be submitted to the FDA.

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complete withdrawal of the product from the market, product recalls, fines, warning letters, untitled letters, clinical holds on clinical studies, refusal of the FDA to approve pending applications or supplements to approved applications, product seizures or detention, refusal to permit the import or export of products, consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs, the issuance of corrective information, injunctions, or the imposition of civil or criminal penalties.

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In addition, the FDA closely regulates the marketing, labeling, advertising and promotion of drugs, biologics (including Section 361 HCT/Ps) and medical devices.

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Until May 25, 2021, medical devices were regulated by Council Directive 93/42/EEC (the “EU Medical Devices Directive”), which has been repealed and replaced by Regulation (EU) No 2017/745 (the “EU Medical Devices Regulation”).

Our current certificates have been granted under the EU Medical Devices Directive whose regime is described below.

The majority of our current certificates have been granted under the EU Medical Devices Directive described below.

However, as of May 26, 2021, some of the EU Medical Devices Regulation requirements apply in place of the corresponding requirements of the EU Medical Devices Directive with regard to registration of economic operators and of devices, post-market surveillance and vigilance requirements.

Pursuing marketing of medical devices in the EU will notably require that our devices be certified under the new regime set forth in the EU Medical Devices Regulation when our current certificates expire.

Pursuing marketing of medical devices in the EU will notably require that all of our devices not currently certified under the new requirements set forth in the EU Medical Devices Regulation receive such certification when the current certificates expire.

Medical Devices Directive

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In particular, there will be a new audit by the notified body before it will renew the relevant certificate(s).

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Medical Device Regulation

The regulatory landscape related to medical devices in the EU recently evolved.

The regulatory landscape related to medical devices in the EU continues to evolve.

On April 5, 2017, the EU Medical Devices Regulation was adopted with the aim of ensuring better protection of public health and patient safety.

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• strengthens rules for the assessment of certain high-risk devices, such as implants, which may have to undergo a clinical evaluation consultation procedure by experts before they are placed on the market.

Devices lawfully placed on the market pursuant to the EU Medical Devices Directive prior to May 26, 2021 may generally continue to be made available on the market or put into service until May 26, 2025, provided that the requirements of the transitional provisions are fulfilled.

Devices lawfully placed on the market pursuant to the EU Medical Devices Directive prior to May 26, 2021 may generally continue to be made available on the market or put into service until their EU Medical Devices Directive certificate expires, provided that the requirements of the transitional provisions are fulfilled.

In particular, the certificate in question must still be valid.

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An FSCA may include the recall, modification, exchange, destruction or retrofitting of the device.

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The advertising and promotion of medical devices is subject to some general principles set forth in EU legislation.

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The aforementioned EU rules are generally applicable in the European Economic Area (“EEA”) which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland.

Legislation has been approved to extend the transition dates for the EU MDR to 2027/2028.

Despite the extension, the notified bodies that are responsible for implementing the EU MDR guidelines must still adopt these changes into their current framework of procedures, which could take additional time.

Other countries

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Unlike the AKS, the Stark Law is violated if the financial arrangement does not meet an applicable exception, regardless of any intent by the parties to induce or reward referrals or the reasons for the financial relationship and the referral.

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The Federal False Claims Act (“FCA”) prohibits a person from knowingly presenting, or caused to be presented, a false or fraudulent request for payment from the federal government, or from making a false statement or using a false record to have a claim approved.

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In general, we must comply with all reporting requirements for any drug that is separately reimbursable under Medicare.

The SUPARTZ FX product is reimbursed under Medicare Part B and, as a result, we provide ASP data on this product to CMS on a quarterly basis.

Our SUPARTZ FX, Gelsyn-3 and Durolane products are reimbursed under Medicare Part B and, as a result, we provide ASP data on this product to CMS on a quarterly basis.

Several states in which we operate have also adopted similar fraud and abuse laws as described above.

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Violation of any of these laws or any other governmental regulations that apply may result in significant penalties, including, without limitation, administrative civil and criminal penalties, damages, disgorgement, fines, additional reporting requirements and compliance oversight obligations, in the event that a corporate integrity agreement or other agreement is required to resolve allegations of noncompliance with these laws, the curtailment or restructuring of operations, exclusion from participation in government healthcare programs and/or individual imprisonment.

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Foreign Corrupt Practices Act

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Bone growth therapy devices are currently exempt from this competitive bidding process.

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Outside of the United States, the pricing of medical devices and prescription pharmaceuticals is subject to governmental control in many countries.

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Other countries may allow companies to fix their own prices for products, but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions.

Consolidated Appropriations Act

In July 2022, in connection with the Consolidated Appropriations Act, 2021 (“CAA”), the Centers for Medicare and Medicaid Services (“CMS”) began utilizing new pricing information the Company reported to it pursuant to the newly adopted reporting obligations to adjust the Medicare payment to healthcare providers using our Durolane and Gelsyn-3 products.

Employee and Human Capital Resources

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(“Continuing LLC Owner”).

Refer to Note 1.

Organization of the Notes to the Consolidated Financial Statements within Part II, Item 8.

Financial Statements and Supplementary Data of this Annual Report on Form 10-K for additional information about the organizational transactions completed as part of the IPO.

Refer to Part II, Item 8.

Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 1.

Organization of this Annual Report for additional information about the organizational transactions completed as part of the IPO.

Available Information

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Our SEC filings are also available on the SEC website at www.sec.gov .

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business