SI-BONE, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This filing reports annual results; standalone fourth-quarter financial figures are not provided in the supplied filing text.
Business context
SI-BONE develops and sells minimally invasive implant systems and instruments for sacroiliac joint fusion, pelvic fixation and pelvic trauma. Its product family includes iFuse, iFuse-3D, iFuse-TORQ and, launched in 2022, iFuse Bedrock Granite. Revenue is concentrated in implant sales, predominantly in the U.S.; the company reported more than 75,000 procedures performed since iFuse launched in 2009.
Financial performance and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $106.4 million | $90.2 million |
| Gross profit / gross margin | $90.7 million / 85% | $79.7 million / 88% |
| Operating expenses | $150.3 million | $131.4 million |
| Loss from operations | $(59.6) million | $(51.7) million |
| Net loss | $(61.3) million | $(56.6) million |
| Net loss per share, basic and diluted | $(1.79) | $(1.71) |
| Net cash used in operating activities | $(41.7) million | $(39.5) million |
- Revenue increased 18%, driven mainly by higher U.S. case volume, an expanding sales force and more active surgeons. U.S. revenue was $98.8 million; international revenue was $7.7 million.
- Gross margin fell three percentage points. Management cited lower average selling prices and procedure/product mix, facility mix, and higher costs associated with new implants and instrument trays.
- Sales and marketing expense rose 15% to $107.7 million; R&D expense increased 10% to $13.6 million. Stock-based compensation totaled $23.1 million.
- Cash and cash equivalents were $20.7 million and short-term investments were $76.6 million at year-end, together $97.3 million, versus $147.0 million a year earlier. Operating cash use and investment in property and equipment contributed to the cash decline.
- Year-end long-term borrowings were $35.2 million; the company reported compliance with debt covenants. Current assets were $137.6 million and current liabilities $21.2 million.
Material changes, outlook and risks
- In 2022, the company launched iFuse Bedrock Granite, received FDA clearances expanding iFuse-TORQ indications and Bedrock use, and secured a CMS New Technology Add-on Payment of up to $9,828 for eligible Granite cases, effective October 1, 2022 for up to three years.
- Management said existing cash and marketable securities were expected to fund operating expenses and capital needs for the next 12 months and beyond, while warning that future revenue, pandemic effects, economic conditions and spending could increase capital needs. It expects continued operating losses and R&D investment; no numerical revenue or earnings guidance is provided.
- In January 2023, SI-BONE refinanced its SVB term loan with a $36 million term loan and obtained a $15 million revolving credit facility; no revolver amount was outstanding as of the filing date. The term loan matures in 2027, and principal amortization begins in 2025.
- Key risks include continued losses, supply-chain and inflation pressures, dependence on a concentrated product family and limited suppliers, reimbursement and pricing uncertainty, competition, and adoption of newer products. The company also highlighted the November 2024 expiration of U.S. patents covering the original iFuse triangular design.
- Clinical evidence and reimbursement policies may evolve; SILVIA follow-up and the SAFFRON trial were ongoing, with results expected in 2024. The company disclosed no material legal proceedings. Its auditor issued an unqualified opinion on the financial statements; management assessed disclosure controls and internal control over financial reporting as effective, with no auditor attestation required because SI-BONE is a smaller reporting company.
Investor verification checklist
- Confirm current cash runway against ongoing operating cash use, planned investment and the company’s continued-loss outlook.
- Track gross-margin trends, average selling prices, procedure mix and the increasing share of procedures performed at ASCs.
- Review progress in sales and adoption of Bedrock Granite and iFuse-TORQ, including eligible use of the CMS add-on payment and clinical-trial outcomes.
- Assess supplier concentration and capacity, particularly reliance on RMS for iFuse-3D and iFuse-TORQ, and monitor inventory growth and supply constraints.
- Monitor payor coverage and reimbursement changes, competitor entry, and the effects of the 2024 patent expiration for original iFuse design features.
- Review the terms, interest costs, covenants and repayment requirements of the January 2023 refinancing and revolving facility.