Regenexx, a 12-year-old Colorado company that has pioneered nonsurgical therapies for treating orthopedic injuries and arthritis has merged with Des Moines-based Harbor View Medical and today announced it has chosen Des Moines as its corporate headquarters.
The privately owned company operates more than 40 affiliated clinics in the United States in major markets that include New York City, Chicago and Los Angeles.
It specializes in orthopedic regenerative therapies using injections of adult stem cells in joints. The company has also affiliated with a handful of overseas clinics that offer its procedures, most recently Mumbai, India.
Over the past two years the company has recruited several of Greater Des Moines’ largest employers to offer the treatment to their employers through their self-funded health plans, a model that it now plans to expand nationwide.
Harbor View Medical, originally founded as a specialty clinic dealing with opioid addiction, became an affiliate of Regenexx several years ago and found a need for nonsurgical regenerative therapies. As part of the transition, the merged company has named Jason Hellickson as its chief executive officer. Hellickson, a retired Holmes Murphy & Associates shareholder, became a venture capital investor in Regenexx after having had a successful Regenexx procedure done on his injured shoulder and lower back.
With current annual revenue of about $10 million, Regenexx hopes to reach sales in the hundreds of millions of dollars annually. The company’s business plan calls for building out its national affiliate clinic network, and simultaneously creating a national network of large employers with self-funded health plans to offer the procedures to their employees.
“We are building out these clinics in a partnership approach around the country,” Hellickson said. “We plan to open 10 new clinics per year over the next five to seven years.”
Currently there are approximately 45,000 orthopedic surgeons in the United States, who perform between 6 million and 12 million surgeries annually, Hellickson said. “Our procedures can eliminate the need for surgeries in roughly 50 percent of those cases,” he said. “So there’s tremendous potential for growth.”
With the model that it pioneered in Greater Des Moines, Regenexx has found that when employees are provided an opportunity to have a nonsurgical procedure paid through their employer’s health plan, 99.9 percent of them choose it over surgery, Hellickson said. Without insurance coverage, about 33 percent opt for the procedure.
The company’s south-side office at 6151 Thornton Ave. currently has a corporate staff of about 15, in addition to its Regenexx Des Moines clinic staff. Hellickson said the company has enough leased space to double the number of corporate staff.
He said Regenexx isn’t currently seeking state or local economic development incentives for its expansion, focusing on the groundwork for the merger and expansion.
Regenexx will continue to lead its affiliate program and research and development activities from its office in Broomfield, Colo. Dr. Christopher Centeno, who pioneered the company’s patented procedures, will continue in his role as chief medical officer at the Broomfield office. Centeno will also continue research work in orthopedic regenerative medicine.
“We look forward to continuing the build-out of Regenexx clinics, streamlining affiliate networks of more than 50 clinics nationwide, and adding additional clinics in major metropolitan areas including Chicago, Atlanta, Dallas, Philadelphia and Charlotte under Jason’s helm,” Centeno said in a statement. “We’re excited about the experience and enthusiasm that Jason brings to Regenexx.”
Hellickson, who retired from Holmes Murphy in 2012, discovered Regenexx when he needed further orthopedic treatment for his shoulder and lower back. He opted for the Regenexx therapy after vowing never to go through another shoulder surgery. He subsequently learned that the company was raising capital and decided to underwrite the investment through his own venture capital firm.
“In doing so, I realized that my background with Holmes Murphy had a potential asset for Harbor View and ultimately Regenexx, in helping self-funded employers add these Regenexx procedures to their self-funded health plans,” he said. “No one had done that before, and I knew that if we could do that, we would have a significant impact on the clinic, which it did.”
Among the major Greater Des Moines-based organizations that now offer Regenexx as part of their health plans are Meredith Corp. — which became Regenexx’s first corporate client in early 2015 — along with Hy-Vee Inc., ITA Group, Kemin Industries, Polk County and a number of other companies.
Harbor View Medical was originally founded as a specialty medical clinic to partner with St. Gregory Retreat Center to help patients avoid or treat opioid addictions. To read a 2012 story about Harbor View Medical, click here.
“What they found out that is that the Regenexx procedure had great potential to treat not just those folks, but anybody with orthopedic events,” Hellickson said. “And the outcomes were so significant that they then expanded the business to really treat not just the patients from St. Gregory’s but also patients throughout Des Moines and Iowa. There was a great deal more potential for the Regenexx procedures than what we were addressing.”
Regenexx has subsequently attracted venture capital from a number of investors, among them John Pappajohn, and by late September plans to close on its next funding round to raise $10 million, Hellickson said. “We feel very comfortable with our ability to raise that capital,” he said.
Ric Jurgens, retired chairman of Hy-Vee, is among a growing list of Greater Des Moines executives who have benefited from the Regenexx procedure. Jurgens, who suffered daily pain varying from “sharp to agonizing” in his heel for the past 35 years, is now pain-free and has been able to walk full rounds of golf for the first time in years, he said.
In addition to the pain relief from what he refers to as a “miracle procedure,” the injection procedure costs considerably less than having surgery, he said. “At that time I didn’t do the math; I just wanted it fixed,” he said. After the heel surgery, he inquired about having the procedure done for his painful wrist, with similar good results. Jurgens said he knows a number of other executives locally who have had success with the procedure.
“I think (the merger and headquarters announcement are) terrific news for Des Moines,” Jurgens added.