🦷 Investing in the end of wisdom tooth surgery

Deal flow in the crowdfunding space has been hot lately! This week I’m deep-diving into TriAgenics, a startup that is aiming to put an end to wisdom teeth removal surgery.

• 🦷 Wis-dumb teeth: Wisdom tooth surgery sucks, let’s get rid of it

• 🏰 Industry Gatekeepers: Can TriAgenics get past the club bouncers?

• 💸 The Opportunity: Revenue figures that start with a ‘B’

TriAgenics Fundraise Page | Triagenics Offering Circular

WISDUMB TEETH

90% of Americans get their wisdom teeth removed.

That’s higher than the percentage of people that own a smartphone, have a driver’s license, or use a credit card.

For such a ubiquitous occurrence, one would think that we’ve perfected the procedure.

Not quite - we’re still knocking people out and yanking the tooth out of their mouth.

Extracting wisdom teeth takes over an hour, is expensive, and leaves the patient recovering for 1-2 weeks. Not to mention all the complications that can occur - my fiancé had to have her jaw purposefully broken by the dentist so that they could access her impacted wisdom teeth.

Leigh Colby founded a dental practice in 1995, owning it for 20 years before selling the business. As part of his experience, he began developing an alternative process to wisdom teeth removal and called it Zero3 TBA.

Colby’s new process took a radical approach of preventing the wisdom teeth from ever forming, eliminating the need for painful surgery years later.

In the first step, a device pinpoints the tooth bud (where the molar grows from). A plastic guide that fits over the patient’s teeth is then created - this shows the dentist exactly where to perform the final step of the process. A small puncture will then be made in the tooth bud tissue with a device that gently warms the area.

While gentle, this pinpointed warming blocks the formation of a tooth in that tooth bud. A video on the procedure can be seen → here.

Colby has tested the procedure on pigs, as they share very similar molar structure to humans. All in all, Colby treated approximately 200 swine tooth buds to make sure his new process worked as intended.

The trials were a perfect success, with 100% of piggy patients showing no molars growing in the treated areas.

Having proven success in animals, Colby’s procedure seems like a clear winner against the current treatment of wisdom tooth removal:

INDUSTRY GATEKEEPERS

Gatekeepers in this industry - DENTISTS

In theory, Colby could cure cavities for life and his treatment would never see the light of day if dentists uniformly pushed backed against it.

Luckily, I don’t think that will be the case with Colby and his company. Zero3 TBA is a safer, better experience for the patient. But there are financial incentives on top of that that should really help push the rollout of the new procedure.

And as Warren Buffet has said many a times, ‘show me the incentive, and I will show you the outcome’

Zero3 TBA is designed to be administered to children 6-12, as the intention is to block the growth of wisdom teeth before it starts. Right now, wisdom teeth are typically removed in the late teens and twenties.

Pediatric & general dentists are currently bringing in minimal revenue from wisdom tooth extraction, as more than 80% of wisdom teeth extractions are outsourced to oral surgeons. But with Zero3 TBA, they could add wisdom teeth prevention as a whole additional revenue stream for their practice.

The procedure is extremely easy to administer, takes roughly 30 minutes, and is a better experience for the patient. I’m extremely optimistic that dentists will see the quality of care & financial benefits with this one.

Gatekeepers in this industry - INSURANCE

Insurance companies are the next gatekeeper in the industry - if they won’t cover it, the % of patients that opt for the procedure will go down drastically.

Insurance companies currently cover removal of wisdom teeth. To me it makes sense for insurance companies to cover something that has had a 100% success rate in order to prevent a potentially higher-cost surgery in the future.

And since there are more complications that can arise from wisdom teeth removal (infection, dry-socket), it makes even more sense to sponsor the one-time treatment early on.

Gatekeepers in this industry - FDA

As a medical device, TriAgenics will need FDA 510(k) approval in order to bring Zero3 TBA from pigs → humans.

TriAgenics has actually had some difficulties with FDA approval in the past, a matter I brought up with Colby. He cited that they had pitched the improper wing of the FDA - a mistake on their part but not a knock to the procedure itself.

Colby has since brought on a regulatory consultant to help push their approval with the FDA, and is confident that they will be granted approval.

Over 64% of FDA submissions get disapproved, so I am of the mindset that this will not be a walk in the park. However, they’re treating it very seriously with the addition of the regulatory consultant, and so I believe it’s a risk I can live with.

Gatekeepers in this industry - PARENTS

Ah yes, the final boss…parents.

With parents, I believe there are two main concerns:

1. Is this new procedure safe?

2. Why pay for something now, when it can be done 10 years from now?

I think if dentists are recommending it and explaining that the procedure is minimally invasive, I think the first concern will essentially vanish.

The 2nd is a bit more concerning, but I still think that 30-50%+ of parents would still opt for the minimally invasive procedure now as opposed to a surgery later.

Gatekeepers Roundup

All in all, here are the risks I associate with each ‘gatekeeper’ in this industry.

• Dentists - 2/10

• Insurance - 3/10

• FDA - 6/10

• Parents - 3/10

THE OPPORTUNITY

Revenue figures that start with a ‘B’

TriAgenics has a massive market opportunity, and I want to contextualize it with dollar amounts.

Each year, there will be nearly 5 million children eligible for this procedure. Conservatively assuming 30% of those opt for Zero3 TBA, we’re looking at 1.5M patients.

TriAgenics charges the dentists $350 per tooth, so we can think of that as $700 per patient.

That’s $1.05B in revenue. Incredible.

TriAgenics is estimating 70% profit margins, which would rank higher than even some SAAS businesses. If we conservatively project 60% margins into this model, that translates to $630M of profit flowing in.

These are rough projections, but demonstrate that there is clear path for TriAgenics to be valued at well over $1B. And yes, they have a portfolio of patents to fend off any copycats in the space.

TriAgenics is raising at a $33.87M valuation on StartEngine.

At that valuation, I believe that the risk-reward is well worth it and will be adding it to my portfolio as a core holding. If you would like to check out the TriAgenics fundraising page, I’ll link it below!