I don’t want to go too far into the weeds on that, but typically, then what happens is you submit, let’s call it, for all intents and purposes, a device description. You explained to the FDA what your device does, how it works, all of the details of the device. And the FDA, as you can imagine, with receiving a piece of paperwork that’s many tens, if not more than, I don’t know how many pages it was, probably 50 to 100 pages describing your product. That’s a lot of information for them to digest. So, you then engage in this process of going back and forth on how the device works, how it functions, there’s questions — just really high-level questions about what the product does, right? So, to-date, we have had three formal FDA pre-submission communications, and we have a fourth plant in April.
And really what this back and forth has been intended to do is just help the FDA, first of all, just understand how our product works, which, as you can imagine, is a pretty involved process. This a very complex piece of equipment. It’s not just kind of a quick here’s how it works, then they understand everything there is to understand about it. So, there’s a learning curve and process that has to happen. And you start to present to them various aspects of your verification and validation plan, how you intend to test the system. You show them the technical equivalence claims that you’re making. You show them how the safety compares to your predicate. And there’s a back-and-forth communication. So, what’s been established so far with the FDA is that our system has the same intended use as the predicate and our predicate has basically been accepted.
We have — I would say, it’s a 510(k) submission that’s been pretty well-established. Management never got a formal written yes or no from the FDA, it still haven’t regarding clinical data. The FDA is typically very reluctant to give you in writing a yes or no answer before you do a 510(k) submission. So, it’s a pretty subjective process where management has to — and the team have to try and deduce from clues and kind of, in some instances, somewhat vague responses what the best course of action is. The FDA has not overtly said, you need to run a clinical trial, they’ve just given us areas of how we were concerned about this and then we respond to their concerns and there’s this back and forth and it’s very difficult to know exactly where the FDA — how they feel about your device.
They really do try and hold back from giving you a firm opinion until they absolutely have to, which is once you submit. So, there’s a lot of strategy that goes into this. So, I just want to kind of lay the groundwork to help people understand. The goal of our next April meeting is — our assessment, I’ll just give you management’s assessment. At this point, management’s assessment is that the risk of the FDA after we submit with our current, let’s call it, our Gen 1 system, the risk of the FDA asking for a clinical data request after we submit, in our opinion, it’s still too high with what we’re calling our active embodiment. Now, it’s not because the FDA has said you need to run a clinical trial. This is a subjective assessment that, as a management team, we try and weigh the risks to benefits.
So, the goal of our next meeting is to specifically obtain feedback related to our verification test plan as well as a clinical trial protocol that we put together that would involve running a clinical trial on a target population outside of the U.S. Now, we’ll get into kind of why we’re thinking about doing that in a moment. But right now, we’re kind of getting to the point where I would say, if we were to do everything perfectly in terms of the verification test plan, it would be largely derisked in terms of knowing what the FDA wants to see in our 510(k) submission. We brought in a very long way. The FDA understands our product, they would understand the verification and testing plans and all the ways that we’re going to test the system and including the clinical trial test protocol that would have the number of patients, the endpoints, the follow-up time, all of that detail.
So, that’s really where we’re going to have a very clear understanding of what it will take to submit a fully derisked 510(k), assuming the active version of the device. Now, obviously, as you start to go back and forth with the FDA, the reason of a clinical study is of so much significance is because Monogram is an oligopoly, right? The orthopedic market is highly consolidated. The top four players account for 75% of the market, and the top robotics player has almost 90% market share in orthopedic robotics and had 75% market share in press-fit implants. It’s not easy for new market entrants to come into oligopolies. It’s — there’s scarcity of capital and these large companies understand this. So, getting funding for a clinical trial, which can have a significant cost, now it’s not an astronomical cost, but it’s a significant cost.
But to give you some framework for that, our CRO estimates that the cost to run the clinical trial would be somewhere in the order of $30,000 to $40,000 per surgery that we would need to run on the order of 90 to 100 surgeries with three to six months of follow-up depending. So that would give you some scale. It’s not so much even the cost of running the clinical trial itself and paying for those surgeries, the big challenge is the number of sites that the FDA would request. So, if you, let’s say, had a three-site trial, you need to have inventory for three sites. And the biggest challenge that we have in our industry is the lead-times to procure implants is significant. This is why we exist. We want to have a just-in-time 3D-printed implant model.