Carlsmed Showcases Personalized Spine Fusion Gains, Cervical Expansion and Medicare Tailwinds at Needham Conf

Key Points

• Carlsmed’s aprevo platform digitally plans and 3D‑prints patient‑specific fusion devices on demand and has expanded from lumbar into cervical, increasing the U.S. addressable market to more than 800,000 procedures and roughly a $16 billion opportunity.
• Published two‑year aprevo lumbar data showed a 74% reduction in reoperations versus stock devices, while early cervical results report ~80% of levels achieving sagittal alignment within 3° and >90% achieving coronal alignment.
• Reimbursement momentum includes three new CMS DRGs and a cervical NTAP that can add up to $21,000 per case, as Carlsmed exits the year with $50.5M revenue, guides $70–75M for the year, and reports mid‑to‑high‑70% gross margins alongside growing surgeon adoption.

Carlsmed NASDAQ: CARL used its presentation at Needham’s 25th Annual Healthcare Conference to highlight progress in its patient-specific digital surgery platform, recent clinical outcomes data, and evolving reimbursement landscape as it expands from lumbar into cervical spine fusion.

Personalized spine fusion platform and market expansion

CEO Mike Cordonnier described Carlsmed as a “digital-first” medtech company focused on improving outcomes and lowering costs in spine surgery. The company’s aprevo platform uses preoperative imaging and surgeon inputs to create a patient-specific virtual model and surgical plan, which is then used to 3D print customized fusion devices on demand and deliver them “just in time for the surgery,” Cordonnier said. Postoperative data is collected to compare the plan versus what was achieved and to continuously train the algorithms used in planning.

Cordonnier said Carlsmed initially focused on lumbar spine fusion, which he characterized as “north of a $10 billion market” with “north of 400,000 addressable procedures” annually. The company launched its cervical platform in the fourth quarter of last year, which Cordonnier said adds roughly another $6 billion in addressable market and expands the total U.S. patient opportunity to more than 800,000 annually across lumbar and cervical indications.

Clinical data: lower reoperations and alignment targets

Cordonnier pointed to recently published clinical results as a key differentiator. He said two-year data for aprevo lumbar technology, published in Global Spine Journal in December, showed a “74% reduction in reoperations at two years” versus stock devices. Cordonnier said the technology enables surgeons to “program the specific correction of the spine into the interbody fusion device,” aiming for more predictable correction and a more durable outcome.

In cervical fusion, Cordonnier emphasized challenges related to bone quality, noting that roughly “one in three” ACDF patients have osteopenia or osteoporosis and experience a “4x greater rate of revision for adjacent segment disease.” He said Carlsmed’s cervical approach focuses on alignment and a broader surface area for fusion in patients with softer bone.

Discussing early cervical data presented at CSRS, Cordonnier said nearly 80% of personalized aprevo levels achieved targeted sagittal alignment within three degrees, and more than 90% achieved coronal alignment within three degrees.

Reimbursement tailwinds and proposed Medicare changes

Management highlighted what it sees as supportive reimbursement dynamics. Cordonnier said CMS issued three new DRGs in 2024—MS-DRG 426, 447, and 450—that provide elevated reimbursement to hospitals for certain inpatient procedures using aprevo lumbar technology. He also said CMS issued a New Technology Add-on Payment (NTAP) for the aprevo cervical platform in October of last year, providing “up to an additional $21,000 reimbursement” on top of existing DRGs.

In response to a question about CMS’s proposed fiscal 2027 IPPS DRGs, Cordonnier said the company was “really excited” about the direction of Medicare reimbursement. He said under the proposed rule, aprevo procedures would map to DRGs 523, 524, or 525 depending on complication and comorbidity level, which he described as “a significant increase in total dollar reimbursement.”

On payer mix, Cordonnier said Carlsmed is “about a 50/50% mix between commercial pay and Medicare today,” and characterized commercial reimbursement as favorable because procedures are paid on existing CPT codes and DRGs.

Commercial growth, surgeon training, and new product catalysts

Cordonnier said the company exited last year with 253 trained surgeon users, adding more than 100 during the year. He cited a “big spike in the fourth quarter,” when the company added 29 new surgeons, attributing the momentum to a larger commercial organization and expanded medical education efforts. At ISASS, Carlsmed hosted a medical education event led by Richard Menger that drew about 100 surgeons who were not current users, Cordonnier said.

Carlsmed also discussed upcoming product and platform additions. Cordonnier said the company began a limited market evaluation for “aprevo bilateral,” a posterior approach requested by surgeons, with a full commercial launch planned for the back half of the year. He also described the “corra platform,” which adds personalized fixation via cervical plating, including multilevel ACDF plates and individual segmental plates, with commercialization expected to support increased utilization.

On coverage, Cordonnier said the company uses a hybrid sales model with direct sales focused on new account acquisition and independent agents supporting case coverage. He said Carlsmed had 12 direct territories and “more than 100 independent agents contracted to cover the case,” adding that the company expects to grow sales territories about 50% this year after a similar expansion last year.

Financial commentary: revenue trajectory, margins, and operating model

Cordonnier said Carlsmed exited last year with $50.5 million in revenue and “north of 75% gross margins,” and reported fourth-quarter revenue of $15.2 million with nearly 77% gross margin. He said the company provided revenue guidance of $70 million to $75 million, representing 44% year-over-year growth.

Asked about margins, CFO Leo Greenstein said gross margin durability was supported by operational improvements made in the third quarter of 2025. He said average revenue per procedure remains largely driven by aprevo lumbar and is expected to be in the “high $20,000 range,” while management expects gross margins to remain in the “mid to high 70%s” as the business scales.

Greenstein also contrasted Carlsmed’s capital profile with traditional spine companies, citing the platform’s on-demand model and reduced need for made-to-stock implant trays and instrument sets. He said this allows the company to focus capital on innovation and growth.

Looking further out, Cordonnier said the company believes personalized spine surgery can become the standard of care for fusion and said it also sees applications in arthroplasty, including future R&D investments in cervical arthroplasty as part of a broader strategy spanning fusion and non-fusion procedures.

About Carlsmed NASDAQ: CARL

We are a commercial-stage medical technology company pioneering AI-enabled personalized spine surgery solutions with a mission to improve outcomes and decrease the cost of healthcare for spine surgery and beyond. We are focused on becoming the standard of care for spine fusion surgery. The aprevo Technology Platform consists of artificial intelligence (“AI”)-enabled software solutions, and interbody implants that we custom design for each patient's unique pathology and vertebral bone topography, and single-use surgical instruments (the “aprevo Technology Platform”).

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