Surgical is Back

“The Surgical business had a problem and it wasn’t hard to diagnose,” said Andrew Hosmer, Vice President of Sales, Surgical. “The losses were outpacing the new business we were bringing onboard.”

Today they have received some attention for their two quarters of double digit growth, but this comes after several quarters of missed expectations across the board. Case in point, looking back to 2016 the business brought on only one new synthetic distributor this despite having completed the BioStructures acquisition in 2015 which provided Bioventus with several synthetic options for surgeons.

“It’s competitive out there and we were not selling the full portfolio,” said Andrew. “We needed to accelerate the acquisition of new customers and ensure we were selling more of the surgical orthobiologics solutions Bioventus has for its customers.”

New Strategy Development

In 2017, the business looked at its people, its processes and its plans, and developed a new approach around the strategy of: Land and Expand. “This was not very complicated,” said Andrew. “We wanted to land more accounts and go deeper in those accounts with more surgeons and more products.”

To execute the strategy the Surgical business needed the right people in the right places and needed to improve processes. As you would expect some personnel changes were part of it. The business needed buy-in from its people and needed people that could be effective in this marketplace supporting this strategy. Open territories were filled with Area Sales Managers with a proven track record of working closely with, and getting the most of, distributor partners and their hospitals.

“We also worked hard on making sure the new team members were trained on both our products and our strategy,” said Andrew. “We worked to ensure all Surgical commercial employees saw opportunities for development and we have been able to raise our bar and retain our best.”

In 2017, the team went ahead with a focus on new distributor acquisition knowing it would lead to new accounts. The distributors targeted were those that sold allograft and synthetic solutions. The business slowly began to show an increase in new distributor activity in 2017 and last year brought in $6 million in new distributor business. Yet that was no cause for celebration.

“We began to realize in 2017 was that the new business was not enough,” said Andrew. “For all the new business brought on, we were losing legacy business at a faster rate. It wasn’t until 2018 that new growth outpaced legacy loses but was only enough to drive 1% year-over-year growth.”

More Needed from the Team

The commercial team realized its top distributor business was declining. Deep analysis revealed Bioventus was still too reliant on the distributor to manage relationship with accounts. The team was learning about RFPs too late in the process and didn’t have the account presence to adequately defend their position.

With little control of the business, they began to tweak the strategy a bit during the second half of 2018. This included using the help of employee representatives serving in the capacity of advisors and the creation of a new go-to-market model centered on account ownership. Instead of relying on what the distributors were telling the team, Bioventus Surgical began fostering stronger relationships at target accounts and improved the ability to control the situation.

In addition, the corporate accounts team was expanded from two to four and a target set of hospitals and top 35 Individual Delivery Networks (IDNs) was created. These targets account for 70% of the current business. This list of targets is where the Surgical commercial team works to form deeper relationships with these customers to drive sustainability and execute on its strategy of selling the broader portfolio.

“The Regional Directors of Surgical including Pete Gioia, Curt Frund and David St. Pierre kept their teams focused and upbeat,” said Andrew. “In 2017 and early 2018, the key performance indicators were being achieved but the overall sales numbers were still being missed. They stayed the course and kept working their plans. It took longer but we could see it start to pay off.”

Today the Surgical team continues to become a stronger player at the account level with more surgeons using more of the portfolio. They are executing on the strategy the business was founded on, to become a portfolio provider of orthobiologic solutions for surgeons and hospital systems. Retaining key people and working cross functionally between sales, marketing and corporate accounts is now more effective and most of all, this hard work has delivered improvement in the overall numbers.

In Q4 2018, the Surgical business missed its budget but was up 10% over prior year and in Q1 2019, it was above budget and up over prior year by 18%. The net/net is two quarters of impressive double digit growth.

“We continue to grow our business and the launch and early sales of OSTEOAMP Select Fibers has given us additional lift in Q2. We are also doing a better job sustaining legacy business by hanging on to our accounts and making more saves because we are working with the right people,” said Andrew.

“The strategy and execution are paying off and we will continue work and refine our plans. While we are optimistic, the surgical business remains a volatile space. Our commercial team knows this is no time to get comfortable and we are driving harder now than ever before.”