Wednesday, December 16, 2009

What's Going On at the Wave?

Recently, TSB was speaking to one of our sources on the Street. Word is that Spine Wave is burning through capital faster than you can say $18 million in revenue for fiscal 2009. TSB wants to know what our readers have heard. It's quite obvious that Captain LoGuidice aka Jack Sparrow has surrounded himself with all his former Medtronic/US Surgical henchmen and are paying themselves like they were running a $200 million dollar company. You would think that after seven years in the making we wouldn't start asking: "Is that all there is?" TSB wants to know what our readers have heard?

12 comments:

  1. I can't speak to the burn rate but they are certainly dangling big carrots out there for "A players" who want to come on board. Unfortunately the expectations are unrealistic and the pink slips come quick for "non-performers". It would seem the leadership has no perspective of what it takes to truly enter a hyper-competitive market such as spine. Or maybe it's desperation?

    The company was (is) built on Staxx which are the wafers designed to provide controlled distraction for fusions and height restoration for kyphoplasty/vertebroplasty. Certainly a clever design but not one that seems to be translating in to recurring revenue outside of paid consultants. The primary reason is that distraction and height restoration with their system is not reproducible, which begs the fundamental question, "Why should I switch to your product when I am getting good results with what I have?" Interbody distraction can be attained with distraction paddles and/or scissor style distractors applied to the screw heads prior to rod placement and PEEK impalntation. NuVasive even has a proprietary insert-and-rotate PEEK that provides some distraction without all the instruments. So, Spine Wave, what can you do for me that the big dogs can't?

    As for the kyphoplasty/vertebroplasty Staxx application the same predicament exists; height restoration is not reproducible. Additionally the large diameter of their introducers for this percutaneous procedure are alarming for physicians who are used to using 11 and 13 guage instruments. This limits their application to the lower lumbar, which is problematic when close to half of all compression fractures occur near the thoracolumbar junction.

    Spine Wave has a product portfolio that will open a few doors and garner a few trials but nothing that will, as they say in this business, flip the business.

    As a side note to TSB, in an earlier comments section you alluded to your desire to stay topical so here is a topic for you; how have the recent NEJM articles reshaped the vertebral compression fracture market (kyphoplasty/vertebroplasty)? Both NUVA and OXIF Spine have made very vocal declarations about aggressively entering those markets via acquisition or organic development. Has this changed in light of the new data????

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  2. Sorry, I meant OFIX, not OXIF.

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  3. Aren't they paying their distributors 50%? How long can they sustain that?

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  4. I do not know exactly about the burn rate, but SW actions do suggest that this would be true.

    SW has brought on distributors, and left most of the direct salesforce out to dry. They will cut territory away from direct sales force, which they made sign "non-compete" agreements to distributors that have no such agreement. Not very ethical! Most of the direct sales force are not making the type of compesation (55-80k)near industry average. SW can not give the FX product away and do not have the mechansisms in place to train the current potenial customers. In one case SW moved a high volume surgeon that the direct salesperson developed to a start up distributor. This distributor is allowing surgeons to "invest" in his distributorship.So Lake and Lojack will blo@ any surgeon or distributor that can bring them business. I do not believe they are paying 50%. I have heard 22% on some items, but have moved up the commission (38%) on pedicle screws up since most of the distributors are not selling this "me too" product. They currently have 10 direct reps ( was 16-18 at one time) and just as many managers, (not including Lake and Skinner). Most of the managers have very little or any spine experience, but they are willing to do anything to grow business at the cost of the sales farce (not a typo). There is no criteria as to the management hires, a former manager with Allez spine with 1.5 years of spine and medical device experience ( i wander what she is good at?). A former Styker biologics rep, etc. (no hardware experience besides SW) If this is such a great opportunity. Then why have SW lost two managers in just the last 5 days. One to Nuvasive the other medical outside spine (smart fellow). A midwest rep and Southwest rep left also for Nuvasive. I think we would all agree that Nuva will not acquire poor talent at this stage. The mid and upper management have shown no leadership or creativity other than repeating " we want more sales!" which L&L learned at US surgical. Lake and Lojack are like Bob "dag gummitt" Bowden. Great 10-15 years ago, but the game has pasted them by! I am sure that L&L and the managers are making fair $, but thats where it ends. These bastards are screwing the others at SW. What worked then does not always work today. To bad they lack the charactor and ethics to work with the people that would like to help them build a winning team. I would be at the very least honorable if SW would realease the saleforce from the N/C so that they can go work for some real compesation and not be threaten to be sued if they do.

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  5. My mistake, xspine is paying 50% on pedicle screws not spine wave.

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  6. It's BIG red flag when their OWN consultants "paid to play" aren't using their implants 100% of the time - meaning if they get "paid to play" and they choose not to play, STAY AWAY!! I suspect Spine Wave to be in major trouble VERY soon...

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  7. Stack it up baby!

    Dont be jealous y'all!

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  8. SW doesn't seemingly have many "pay to play" surgeons as many smaller companies do. I'm told many surgeons have had interest but apparently they have kept that circle tight. Therefore no big red flag.
    Don't millimeters count in spinal surgery?? You hip and knee readers should be looking at the other headlines. Posterior/paddle distraction and rotating with the same size implant are not ideal for nerve roots. Staxx is not quite revolutionary however as stated above it seems to get evals and that's not easy to do with contracts and pay-offs - nowadays.
    Kypho is a tough market but with a unique and larger approach addressing the thoracic AND lumbar areas they need clinical support to demonstrate correlations.
    SW seems to be keeping information close to the vest but above mentioned recent events might change perspective...

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  9. Look at all the speculation about Spine Wave! I say touché to them for keeping their information private - ah, the luxury of a privately held firm. My guess is that Sr. Management isn't paying themselves half as much as people think. They're a start-up, by nature they burn through capital, but that doesn't mean they aren't doing the right things. I hear they are heavily investing in R&D - what a novel idea! As far as the VP of Sales, Nick Lake, the above comments and TSB's previous speculations (8/09) couldn't be further off the mark. I worked for him during his MDT/Sofamor Danek days and he is the most honest & hard working executive you'll find in this industry. Anytime I hear about him now he's in the field, even doing cases, so he knows the score on the street. If I could buy into this company, I'd take the bet. Can't say that about a lot of medical start-ups these days!

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  10. Sounds like a glaring endorsement from someone's best friend. What was in the Kool-Aid?

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  11. The diatribe posted by the ex-employee there in Dec was sad, very sad

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  12. MH has no clue?

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