Sunday, January 31, 2010
Recently there has been a rash of people blogging about a controversial company called the Laser Spine Institute. TSB would be interested in knowing if anyone has had any experience with these facilities. Located in Arizona, Florida, California, and Pennsylvania this institute claims to use minimally invasive, endoscopic laser assisted procedures as a modality of treatment for various spinal maladies. Considering that during my tenure within the industry I have come to know many spine surgeons on a national basis, I am not familiar with this group. Any feedback would be welcomed by our patient readers. Once again, thank you.
Recently, TSB was traveling with a principal of an early-growth stage company when this person exclaimed; "its amazing what we have done to ourselves as an industry." I would have loved to use the word "principle" but in all honesty, there are very few people in spine that possess the guiding sense of the requirements and obligations of right conduct. Years ago, spine was a well respected industry, one that focused on delivering innovative technologies that really made a difference in the clinical outcomes and the quality of life for those that needed it the most, the patient. With over one hundred companies, the industry is beginning to exhibit massive gridlock, where executive management teams resemble the United States Congress lacking in true leadership by bringing old values and strategies of self-preservation. The truth is that the industry is as dysfunctional as we have ever seen it. Somewhere along the way, the industry lost its moral compass by throwing aside the clinical and ethical obligations "of doing the right thing" by wanting to play in a game that few are qualified yet many long for. Based on conversations that TSB has had with colleagues held in high esteem because of their integrity and love of the industry, the belief is that the defining moments were the development and sale of Charite to DePuy and Spine Solutions, aka ProDisc, to Synthes. True innovation does not last very long.
Up until then, many companies were developing products incrementally enhancing their respective portfolios willing to build a business based on common sense and realistic financial forecasts. Suddenly, in one fell swoop, the game was on. Charite was brokered by former U.S. Surgical employees and Spine Solutions, gave us an introduction to a former Wall Street analyst turned merchant banker. With the sale of those technologies came entrepreneurial fever. The common theme heard was "if they can do it, why can't we?" Not only did this change the mind set of industry professionals and surgeons, it open the door to every private equity and venture capitalist around the world. With innovation came the craze to patent any and every idea that one could come up with. This was reinforced by the Michelson victory over Medtronic Sofamor Danek. With innovation, we were introduced to deal making. Today, our market is glutted and will be gutted because of our ability to imitate, rather than to innovate. The only true innovation comes from those companies that have the ability to come up with a better marketing spin. How does one develop another pedicle screw, another cervical plate, another zero-profile device, another cage, or biologic when it doesn't truly change the clinical outcomes? Simply, by the art of the deal.
Suddenly, everyone had to be in on the deal. Everyone had an idea. Products were churned out regardless of innovation or not. We heard the words; first generation, second generation, third generation, fourth generation. All this with no retrospective data. It was pure marketing at its best. The more capital that was taken in, the more we had to learn that nothing on Wall Street or by investors was done long-term, life became a short-term race. Today we pride ourselves as an industry that is constantly under scrutiny by the Department of Justice, an industry where we applaud a CEO who started a company by stealing his former employers IP and employees, conspiring against it. And, we applaud its success. Shameful. Many of you call it genius, I call it criminal. An industry where the leading question in an interview is, "how much revenue can you bring within a certain period of time, meaning how many surgeons do you own." Where distributors buy surgeons business by either hiring their brother-in-law, or kicking money back to the surgeons under the table. Where surgeons no longer want to be surgeons, but want to be distributors, where hospital CEO's are in bed with companies. Where an employee is no longer an asset but a commodity, treated disrespectfully because those that lead have no idea of what their doing.
It's become quite evident that we are in a race. The question is, "are we in a race with ourselves or is it a race with time, before someone has the wherewithal to put on the brakes?" Where are the Howard Beale's of the spine world that have the intestinal fortitude to stand up and yell, "we're mad as hell and we're not going to take it anymore." The fact is that we have become a see nothing, do nothing, hear nothing industry. TSB wants to know what our readers think?
Saturday, January 30, 2010
The timing could not have been worse. As NuVasive was getting ready to kick off their NSM this week, the market was reacting to concerns as to what is happening in the spine industry and specifically XLIF. TSB received many unusual calls from investors concerned about what was going on at the company. With a 52 week high of $45.06 and a low of $24.17 one can understand why NuVa has investors wondering.
I'm sure as all the NuVa employees were sitting anxiously awaiting the arrival of the Emcee, the old 70's song "Everything Is Beautiful" by Ray Stevens was playing in the background. It was a great year for Lukianov and his band of gypsies. There was a lot of chest pumping and high fives along with confidence that 2010 will be the year of the Purple People Eaters. PT Barnum and Barney would be proud. Revenue guidance for 2010 of 30-35% growth or $480-$500 million takes some "cohonies" considering that the guidance for the industry has been adjusted by the analysts to meet the challenging environment in the healthcare industry, let alone the economy. As "cockey" as Lukianov is, he should go to bed praying that the insurance industry doesn't further continue to sink its teeth into coverage for XLIF. We are sure that if he is as savvy as he is, NuVa is in the war room weighing every option in the event the worm turns. Potentially, a request can be made by the carriers to modify the ICD-9 and CPT Codes for this procedure. NASS has already jumped into this melee to defend its members and NuVa. Would we expect otherwise?
But here is the bigger question: Will surgeons that are pressed by the insurance industry want to defend every XLIF procedure that they perform to ensure that their post-op dictation match the definition of an ALIF? TSB finds it hard to believe that no-one hasn't been denied reimbursement for XLIF when Lukianov himself stated in his conference call that this is a "local" not national issue, but that's old news and we all know that Alex can perform the aztec two-step better than anyone in the business. Regardless of the "dog and pony" act, analysts need to calm down since NuVa is not going anywhere. If they have one achilles heel, it is that XLIF has carried the burden of getting this company to where it is. And you know what my grand-daddy use to say, "you can only milk one cow for so long and then you run out of milk." If NuVa is as intelligent as we believe they are, they are looking at the option of using the Xtreme lateral approach for lumbar disc arthroplasty and how to beef up their portfolio. Let's face it, outside of XLIF what else is there?
You know what they say, "he isn't making $9 million a year because he's stupid." TSB wants to know what our readers have heard on the street? In addition, we would love to have some surgeons weigh in on the debate.
Friday, January 29, 2010
On January 28th, 2010, RSB Spine LLC (aka Robert S Bray) announced that the FDA had issued clearance on the company's 510(K) filing to commercially market the InterPlate C-PS and L-PS interbody spacers.
Mike O'Neal, President of Paradigm Devices (the real Paradigm) stated that RSB now provides distributors with a full-line of modular interbody implants offering a complete array of material and mechanical loading options that are code compliant. Available in titanium and PEEK, RSB now provides independent distributors with an opportunity to compete in an ever increasing market segment. When one analyzes the Zero-P market it is obvious that many companies are moving at the speed of light. What was once a barren landscape has become promiscuous, multiplying faster than a rabbit. Bang, Bang, Bang one after another there is a glut of Zero-P products. Products like the InterPlate are rounding out the distributors product portfolio enhancing their ability to spark interest in another option for cervical and lumbar devices. As Rocky once said, "Hey Bullwinkle, you wanna see me pull a rabbit out of my hat? Presto! The RSB InterPlate. TSB wants to know what our readers think of this product.
TSB Alert to our Readers:
Recently, one of our followers indicated that Blue Cross/Blue Shield has been denying coverage for spine procedures in the New England Area. Has anyone including surgeons, patients, or industry professionals experienced any denials? If you know, please let us know.
OTW's Walter Eisner was able to land an interview with Dave Stassen founding manager of Split Rock Partners regarding the recent demise of Disc Dynamics. Stassen acknowledged that this was the third or fourth company in SRP's portfolio that had to cease operations because of their inability to get through the FDA. He is quoted as saying, "investors have dropped $300-$400 million" down the hole because of the FDA. Hmmmm? Sounds like sour grapes. Why?
Regardless of their size, one has to wonder who was doing the due diligence on behalf of SRP when they invested in this technology? The one thing we have learned is that just because you have made millions doesn't mean that you can beat the house. Hopefully, the VC's have learned that their lesson. VC's are very interesting people. When one looks at their backgrounds they are brilliant people holding law degrees and MBA's from pedigree schools, unfortunately, having a blue blood education is not a prelude to understanding emerging technologies and the potential challenges in bringing them to the market. I am sure SRP has made some wonderful investments, but the question must be asked, "what were they thinking when they invested in DD? A colleague of TSB's informed us that when they originally saw Steve Healy present at an investors meeting in 2006 or 2007, the skeptic light bulb immediately went off in their head about this product. I know, many of our readers will question our monday morning quarterbacking motivations, yet, hope springs eternal for many investors
Is it really a travesty that American patients won't get access to this technology? As one of our commentators stated, "could it have been that the FDA was concerned with the potential carcinogenic effect of this polymer? Mr. Stassen forgets that regardless of his financial interest, the FDA's responsibility is to regulate the safety and efficacy of medical devices. It is also of interest that Stassen claims that patients in other parts of the world "are getting outstanding results." Have any of our readers wondered why there has been an exodus of clinical trials to foreign countries where regulatory and medical guidelines are lax and patients become real-life guinea pigs. Many of our clinical meetings have become circus acts with surgeons providing the audience with pictures at an exhibition. Sometimes it reminds you of a foreign film festival
It's noble of Stassen to acknowledge that DD shares "some" of the responsibility. The only saving grace that has come out of this exercise is that there will be no bankruptcy proceedings Mr. Stassen forgot that "those who fail to plan, plan to fail." It's always easier to blame someone else than look at yourself in the mirror and just admit, it was a bad investment to begin with. TSB wants to know what our readers think?
Wednesday, January 27, 2010
Recently, TSB was speaking with a few surgeons about their experience with the STALIF-C and it seems that this device is not as easy to implant as is claimed by Centinel Spine. Implantation of the PEEK device is not the difficult part of the procedure, its a bear getting the screws into the vertebral body. So the question must be asked, are these implants a viable option for the spine surgeon if it complicates the procedure? How much bigger does the incision have to be to accommodate screw placement? In addition, TSB has heard that surgeons have been concerned about the complexity of inserting the LDR Vertebridge ROI-C. Surgeons have reported they do not like the way it feels upon insertion and that it is destructive to the endplates.
If any of our surgeon readers or industry professionals have had any experience with these devices, TSB and our readers welcomes your feedback. It seems that everyone has jumped on the bandwagon in developing these products, yet, the reality may be that an old-fashioned cervical plate and interbody device may be the way to go. TSB wants to know what our readers think?
Recently, TSB has spoken to a few colleagues that have been interviewing for new jobs with early growth stage companies. One of the challenges of the interview is determining whether the organization and the culture that it exudes can mesh with your experience and personality. Synergy is important if you are going to survive. Identifying a company's strategic objectives and how they intend to tactically execute can be the most important task during the process. There is a difference between needing or wanting a job, and establishing a career path. Hopefully, as you go through this process, the prospective employer and employees that interview you are being transparent. Sometimes there is a fine line between what is real, and what is fantasy.
Some of the questions that you need to be concerned with is how long has the company been in existence? This will provide you with a snap-shot as to its longevity, and how it relates to execution. Is the company managed by the original founders, and what are their backgrounds? Have they ever run a company? Do they strike you as leaders or micro-mangers, and do you believe they have what it takes? What is the company's revenue stream? This will allow you to assess the compound annual growth rate (CAGR) in relation to execution capabilities. Ask for sales revenue from the previous year to the current year, and analyze whether its expectations meet the realities of the marketplace? What type of intellectual property do they own, or have pending? If you must, sign a confidential disclosure agreement (CDA). Remember, the reason they are interviewing you is because you have a special set of skills that they need. This is a two-way street. How is the company financed? Is the company self-funded or is the company funded by private equity? Remember, getting into an organization that is undercapitalized is a kiss of death. If they are attempting to raise capital, ask how long have they been doing it. This can be a barometer as to what potential investors think of the person or people running the company. Don't be afraid to ask these questions. This will allow you to do your own due diligence. How many new products have they launched within the last year, and what is on the horizon? Is there innovation or stagnation? What type of marketing platform does the company have? Is it unique or is it more of the same? Do they want to get to know who you are? Why would you want to work for someone that doesn't take the time to get to know you? This is very important considering that you are on a date, and it may take a few more interviews before either party intends on committing to one another.
Getting hired is like getting married. You have to trust one another, while learning to live with each other's idiosyncracies. Look around the office and observe how the employees interact with one another. Do you get a sense of camaraderie? Some of the best resources are your friends within the industry. If you have any reservations about the company, its better to walk away. Remember, looking for a new job is like gambling;
"You got to know when to hold 'em, know when to fold 'em, know when to walk away, know when to run, you never count your money when you're sitting at the table, There'll be time enough for countin', when the dealings done."
Monday, January 25, 2010
Many of our readers have an idea about TSB's position on the current state of affairs with healthcare and as it relates to our industry. Fundamental changes must be made to tort reform, the power of the insurance industry, stricter guidelines and transparency within our industry, physician compromise, and patients being held accountable for managing their own health. Yet, what has opened up as a fight to control healthcare cost on the east coast in New York City between United Healthcare (the real evil empire) and Continuum Healthcare a consortium of five NYC hospitals could potentially affect 25 million people across this country.
Hospitals and United are in a bitter dispute over contract rates and United's demand that the hospital's notify the insurer within 24 hours after a patient's admission. If the hospital failed to do so, the reimbursements will be cut in half. This is meant to improve quality of care and allows for case managers to jump in right away.
Many of you know that the insurance industry is not in the business of providing healthcare, they are in the business of risk management. In many ways, the government has realized in order to minimize the cost of healthcare, they too must be in the risk management business, and many of us are unhappy. Yet, this dispute signals the beginning of ratcheting up of controls intended to cut costs. But could the insurance company be the only culprit in this calculating strategy, or, are the companies attempting to keep the premiums low to avoid being taxed on expensive plans?
William Golden, United's NY Chief Executive, was quoted as saying; "tension had been fanned by a greedy and intransigent hospital system." Isn't it interesting who is calling the kettle black? United Healthcare, you know the home of backdating stock and providing former CEO's with golden parachutes valued at over $300 million dollars, is complaining that they need to make healthcare affordable. Affordability usually means less access, procedural controls, and spending less on subscribers that have paid into a failing and falling system. While other insurance companies sit on the sidelines and carefully watch this unfold, what are we doing about it? It's time that the people start coalescing to protect our future. If the physician's are too weak to unite in an attempt to challenge the anti-trust laws, its time that the people's voice be heard.
With the rising cost of devices, pharmaceuticals, hospital operation costs, and union contracts it is becoming difficult to provide healthcare for people in inner cities across this country. Dr. Sam Ho Ho Ho, United Healtcare's Chief Medical Officer said that " the insurer's position was not motivated by money, that this was an attempt to improve outcomes." We must admire Dr. Ho for his ridiculous analogy using the quality of workmanship an automobile mechanic may perform on your car in comparison to what any physician and hospital provide. If the patient has a medical necessity, isn't it appropriate that the physician along with the hospital be compensated for their work?
Not only is there an attempt to implement this policy in NYC, it is happening in Oklahoma City, and Tennessee. Many of our readers believe that it is the governments intent to socialize medicine, when in reality it is the insurance industry's ultimate plan to socialize medicine by controlling what can be done, when can it be done, and who will do it. Physicians are so oblivious that the industry's intent is to make them employees of the insurers. Many of us ask the question; how does this impact us? Not only will this impact you in the future, it will also impact your ability to sell in hospitals at a reasonable price to earn an affordable living? The fact remains, the more the hospitals are squeezed, the more we will be squeezed.
So what can you do? The best way to send a message is to have your company start shopping around for a different insurance provider. If you have United, look at your options. Hurt them where it hurts the most, in their pocketbook. Call your Congressman or Senator and tell them to get off their soft asses, and start putting together a healthcare plan that is affordable and benefits the hard working people of this country, and not every special interest group on K Street. Call them and tell them you want to know which special interest groups are they taking money from and tell them its time to stop the madness. TSB wants to know what our readers think?
Friday, January 22, 2010
On December 20th, 2009, TSB wrote about Bacterin and posed the question whether this company would survive. Upon publishing that blog, many of the comments that were posted discussed the many "nefarious techniques" that the company employed in manipulating their distribution model. At that time some of you discussed how Bacterin had their direct reps going in and undercutting their distributors, along with using account information on your scrubs to deal directly with your customers, or having their customer service girls contact your customers and undermine your relationships.
Well readers, guess what, there's something in the air up in Big Sky Country. TSB heard from a l'il birdie that the boyz form Bozeman are up to their dirty little tricks again. You have to wonder what's going on at a company that can't pay its reps their expense checks and then hold a NSM in the City of Lost Wages, and weeks later, notify their direct salespeople that they are terminated and if they want to stay on board they can do it as a 1099.
You gotta love our industry word spreads faster than the H1N1 Virus.
Sometimes people wonder why TSB has a forum like this blogspot. Well, its a platform so that we the people can keep this industry accountable for the many irresponsible and idiotic things that people and companies do without thinking about the repercussions. Inglorious Basterds? Could it be that SS Colonel Hans Landa is running this operation? Maybe its time to call in Lieutenant Aldo Raines and his eight cohorts to teach these boyz a lesson? TSB wants to know what our readers think we should do?
Thursday, January 21, 2010
Let's use an example:
Over the years, Stryker has undergone multiple stock splits. If you compare the historical price of Stryker stock to those values of the present day stock this would not accurately reflect performance. For this reason, one must compare the "split-adjusted" share price.
Hypothetically, when Stryker went public the cash price for Stryker stock was $10, after four years the share price appreciated to $50, then Stryker's management decided that a 2 for 1 share split was appropriate, reducing the share price to $25. As years went by, Strykers stock rose to $50 per share and according to Stryker's policy the stock was split each time the stock reach $50. Let's say that the company split its shares four times since going public.
The share price has then appreciated much more than 2.5 times from $10 to $25 dollars. In actuality if the stock had undergone four 2 for 1 splits, therefore, one original share would be worth $400. So if you bought one original share and held it you would have 16 shares. So even though the current share price is $25, one original share is worth $400 per share, and therefore appreciated 40 times. This is called a "tenbagger" an elusive investment that many investors look for.
Examples of tenbaggers are blue-chip stocks like Stryker, General Electric, Exxon, WalMart etc..... These are considering once in a lifetime investments. So what's the big brouhaha about this investigation? It seems that a double standard potentially exists when it comes to private investors unloading stock versus insiders. Robbins Umeda will have a difficult time proving their case, yet when one performs due diligence on this company it seems that they do their legal homework before jumping off the bridge. In all likelihood certain accounting improprieties will be exposed, Stryker will reach a settlement with the shareholders, and deny any culpability in its employees actions. Let's wait and see considering that the only people that will be making money are the vultures representing the shareholders and Stryker.
Wednesday, January 20, 2010
Robbins Umeda a San Diego, California based law firm specializing in representing investors in shareholder derivatives and securities fraud class actions has filed a lawsuit on behalf of Stryker shareholders that had purchased or acquired Stryker stock between January 25th, 2007 and November 18th, 2008. The lawsuit seeks to recover from Stryker and certain of its officers for damages that the shareholders may have suffered as a result of the officers mismanagement of the Company.
The investigation concerns questionable statements made by the the Company during this time line regarding its business success and profitability as well as whether the Company had cut corners on its operational costs by failing to document and maintain adequate quality controls over its product manufacturing. The violations allegedly entail insider trading whereas the insiders took advantage of their 52 week high of $75 dollars per share split adjusted in November 2007 generating more than $300 million in proceeds prior to the stock's 52% decline to $36.11 on November 20th, 2008. If you would like more information regarding your rights contact Lauren Levi @ 800.350.6003. Looks like there's trouble in paradise or a little trouble in Strykerland. TSB wants to know whether our readers believe there was a little manipulation of the books by the Stryker Mafia. Based on Robbins Umeda's track record and specialty, they love these types of cases.
Captiva Spine: Pivotec Lumbar Interbody Fusion Device
Choice Spine: Anterior Cervical Plating System
Custom Spine: Pathway Ivb/Vbr
Globus Medical: Patriot Transcontinental Llif Spacer
K2M: Modification to Caspian Spinal System
Lanx LLC: Modification to Lanx Spinal Fixation System
Life Spine: Stand-Alone Spacer
Medtronic: Modification to CD Horizon Spinal System
Stryker Spine: Xia 4.5 Spine, AVS Pl PEEK Spacer
VTI: InterFuse Invertebral Body Fusion Device Model 9076
Tuesday, January 19, 2010
Are they reeling against the ropes? Could this be the next "Thrilla in Manilla?" No, " it looks like (Teddy Pendergrass God rest his SOUL) another spine TKO. " In 2000 Disc Dynamics secured $65 million to fund the development of DASCOR, a disc arthroplasty system.
DASCOR received its CE Mark in Europe and was sold on a limited basis in Europe over the past three years. Unable to obtain FDA approval to commence a pivotal study in the U.S., it seems DD has exhausted all possible funding and with its operating funds depleted, DD commenced a wind down of its business effective December 31st, 2009 and has terminated all of its employees and discontinued all financial support of clinical studies.
$65 million? Hopefully, some of those prudent investors will have learned their lesson. IST, Archus, Vertebron, Inion, Pegasus, and now Disc Dynamics.
"lookin' back over the years, we've all shed some tears
Told ourselves time and time again, this time we're gonna win
But another fight, things ain't right, we're losin' again
Takes a fool to lose twice, and start over again
Think I better let it go, looks like another spine TKO
$65 million? No wonder the CEO left when he had the opportunity. How many more crazy ideas will we see where investors will throw millions of dollars at companies that are run by people that do not posess the skills nor business acumen to bring a venture to fruition? TSB wants to know what our readers have heard and what they think the residual fallout will be for many of the companies that are underfunded?
Saturday, January 16, 2010
Recently, OTW wrote an article about NASS "flexing its muscle" on behalf of NuVasive by notifying the five insurance carriers in question that supposedly have denied reimbursement on the basis that XLIF is investigational and experimental. TSB says "supposedly" since most of us are still confused as to what Alex Lukianov meant in his investors conference call when he said; "this is a local problem, not a national problem." If one has the H1N1 virus in Seattle, but it hasn't spread to Atlanta, is it a problem or not? As some of our colleagues have stated, "where there's smoke, there always is a fire, at least a little one.
But with that said, NuVasive should not have to be defending this procedure as investigational and experimental. A pre-emptive strategy is in place but they still have challenges with the carriers because they now will scrutinize the cost of this procedure. The problem lies in the marketing of this procedural system and there in lies the confusion with the insurance industry. Sometimes too much voodoo marketing comes back to bite you in an area below the equator.
Ironically, NASS has jump into the melee by writing a reasonable letter on behalf of its members and NUVA. So at least the market and the analysts can get back to some semblance of normalcy. Sometimes these people just love to manipulate the market considering that there have been reports of "shorting" NUVA's stock.
As we move into the new year, Lukianov has set the "bar" at a level that may be a bit harder to clear by his sales management team. Ever wonder why this company has such a high attrition rate? With reports coming out of Europe that there is some customer discourse, inventory concerns and the onus of convertible debt, the question remains, can NUVA continue to rely on XLIF and Osteocell (old technology with a new spin) to hit those numbers? TSB wants to know what our readers have heard on the street?
Friday, January 15, 2010
As more people look for alternative treatments to the back pain, one topic that has not received much attention is pain management. There are a myriad of diagnoses that are in order to identify what is the primary, secondary or tertiary reason someone needs medical care for back pain. Since it is human nature to seek conservative treatment before opting for surgery, the spine industry has seen an influx of new therapies and entrants. No longer is the orthopedic and neurosurgeon the primary gatekeeper, today we see more and more anesthesiologist (aka pain managers) and interventional radiologist participating in the patient's modality of treatment. With new markets come new opportunities. Why? Because physicians look for newer and potentially better ways of addressing pain, along with newer avenues to supplement their income. No different than you and I. Yes, readers while the Wall Street analysts focus on the legacy companies, 2010 can become the year of Pain Management.
Pain Management has evolved from hot and cold therapies, the advent of TENS units, electrical bone stimulators, and chiropractic care. Even in today's world we see more and more physicians aligning themselves with chiropractic care in their offices or centers. These are only a few modalities that aide patients in alleviating pain. We have more invasive procedures being performed by interventional radiologists and anesthesiologists in some cases with the assistance of orthopedic and neurosurgeons. As this dynamic unfolded, we have more and more physicians looking to perform surgical procedures in twenty-three hour stay ambulatory surgery centers or pain management centers.
Recently, TSB wrote a blog entitled; "Is it Nu, Is it Tru, does it Loc and does it Fuse?" The blog centered on the introduction of facet fusion dowels and a rectangular wedge that had been exhibited at NASS. The reader response was overwhelming. Some intelligent, some adversarial, some beyond the sublime. But regardless of your personal opinions about people involved in this market, it seems that these little companies are picking up more and more traction in today's uncertain healthcare environment. These companies included NuTech, TruFuse, VertiLoc, Facet Fusion Technologies and even Bacterin has entered the fray (I believe they were involved with the original NuTech). In addition, word on the street has been that even NuVasive is looking at this market.
There is much controversy surrounding this modality of treatment. These allografts are manufactured out of cortical bone since it is very difficult to machine cancellous bone due to its spongy nature. In addition, most of us continue to obsess about fusion. If it doesn't fuse the facet, it's not doing its job. Along with these companies we have seen US Spine, Trans1 and Facet Solutions offer alternatives to facet pain management. So the question must be asked of our readers, are these companies going away? Or, are they taking advantage of an entirely new market that has the potential to grow regardless of how in-the-box many of us are in our thought process.
Considering that the facet has features similar to other joints in our body, is the only alternative fusion, or are we looking at this in the wrong way? The company that comes up with the best access instrumentation for percutaneous implantation and implant design could be the winner in a race that none of us know what the final outcome will be. TSB wants to know what our readers think?
Thursday, January 14, 2010
It was reported today that a federal judge sentenced Mark Kabins for his role in the so-called Medical Mafia conspiracy in the City of Lost Wages. Kabins will spend five years on probation with home confinement for the first six months and pay Melodie Simon $3.5 million dollars for medical malpractice which resulted in her paralysis.
Kabins pled guilty last year to misprison of a felony, meaning he knew about the crime being committed but failed to report it. Of course he knew of the crime because he was an accessory and a co-conspirator.
TSB wonders what the Vegas Distributor for Blackstone/Orthofix will do for the next six months while Kabins stews at home. If you know of anyone in Vegas that needs back surgery spread the word, Kabins is a criminal. You know the old saying, what goes around, comes around.
"The expansion of Custom Spine's sales management team shows the company's dedication to future growth and providing the market with unique spine solutions."
- Lew Bennett-
This isn't a blog about the Thomas Friedman's best seller, this could be the story about a company that is delusional. Our readers must admit that it is "unique" that an octogenarian running a "me too" company is quoted as saying that CS is providing "unique spinal solutions to the market." Unique? The definition of unique is "having no like or equal, unparalleled or incomparable." Have any of our readers looked at the CS website? Not a very unique product portfolio. Lew, this company isn't Sofamor Danek thirty years ago and honestly your grasp on the English lexicon leaves much to be desired. Custom Spine is another one of those "me too" companies that we always write about. One analyst described it as " not much smoke and a lot of mirrors."
Why would a potential distributor want to work for a company that self-anointed itself "a pioneering leader in the spine market creating the next generation of surgeon friendly implants and instruments that provide superior performance." Donnie Deutsch were are you when someone needs a real marketeer? Word on the street was that they terminated their second largest distributor and replaced them with scrub techs at a bargain basement price, and reduced their largest distributors commissions by 10% in order to increase their operating income.
Another "me too" pedicle screw, a cervical plate that only has 5 degrees of superior/inferior angulation and more PEEK products, sounds like something truly unique and pioneering is going on at this company, it all likelihood, it is Lew himself. TSB wants to know what our readers think?
Tuesday, January 12, 2010
On October 30th, 2009, TSB reported that Trans1 (TSON) was on the clock in identifying a product that would compliment the AxiaLIF and help in gaining pull thru business. Recently it was reported that TSON and Life Spine had entered into a distribution agreement. In addition, TSON has reported that in all likelihood it will fail to meet its forecasted guidance for the Street for this quarter. Strategically, this should buy TSON some time in continuing their full court press in educating surgeons and addressing their challenges with AxiaLIF.
Contrary, to what many analysts have been saying, this decision should help TSON with some contingencies. Most analysts that we speak with continue to temper their exuberance about this company, in the same way that they are not that enamored with amount of convertible debt that NuVasive carries, but that's a different story for another day. The key to creating a successful synergy will be contingent on Life Spine's product, the Avatar, performing better than some of their other products. Product education will be the key for the 60 plus direct sales reps that sell TSON and there will definitely be a learning curve on the intra-operative nuances of the Avatar. In all likelihood there will be a transitional period before their sales people have the ability to generate sales. Yet, there is no guarantee that those surgeons utilizing AxiaLIF will want to use or like to use the Avatar.
Contingent on the structure of this licensing/distribution agreement TSON could win or it could potentially create turmoil within their sales ranks. TSON and Life Spine, one night stand or long term love affair? TSB wants to know what our readers think?
The BBC new reported on Monday, Januray 11th, that two genes have been identified by a consortium of scientist from Oxford University (England), the University of Queensland (Australia), and the University of Texas that have a strong connection to Ankylosing Spondylitis, better known as AS.
The disease can result in a person becoming fixed in a bent position looking down at their feet. The identification of these two genes (ERAP1 and IL23R) could help in developing a modality of treatment for this condition.
Currently treatment involves pain killers and physiotherapy although some patients are treated with costly antibodies. The study found six regions of the genome that were associated with AS. ERAP1 is thought to control inflammation while IL23R has been implicated in psoriasis and inflammatory bowel disease.
There are many theories as to what causes AS but understanding which genes involved could lead to a new treatment. Gene Therapy, the future of spine? Kudos to those scientist that labor behind the curtain hoping to make real advancements in spine care that will make a difference.
Sunday, January 10, 2010
It was announced on Sunday, January 10th, 2010 that Geff Yielding of Jacksonville, Arkansas was sentenced to 78 months imprisonment for his role in a healthcare fraud scheme that involved his now deceased wife Kelley (who died mysteriously the day before she was to testify before a convened Federal Grand Jury) in connection with the sale of ORTHOFIX bone stimulators and OSTEOTECH allograft bone graft to Baptist Health Medical Center, North Little Rock, Arkansas between 2003 and 2004.
Mr. Yielding was employed as a physicians assistant for Richard Jordan, a prominent Baptist Neurosurgeon. Yielding was able to dictate what products were ordered for use in surgery performed by Jordan. The commissions during that period totaled $380,000. Hopefully, this will send those scrub technicians, physicians assistants and operating room nurses a stern message. "You play, you will pay." Come on ladies and gentlemen, you know who you are. As this drama continues to unfold TSB and our readers await for the day that the DOJ elevates their commitment to clean up this industry by throwing some surgeons into jail.
Yielding will serve a minimum 80% of the 78 months since he was convicted of federal charges. Yes sirree, for those of you playing in this space any federal conviction requires a mandatory 80% of the sentence. In addition to jail time, Yielding is required to make restitution in the amount of $944, 995.84 (OUCH!) The sad part to this saga is that there is a child that not only was left motherless, but will be fatherless come March 10th, 2010.
TSB has to ask the FBI and DOJ what is taking you so long to put the other criminals behind bars. Stop pandering to the surgeons that continue to behave that they are beyond reproach starting their own distributorships while collaborating with other industry professionals. You know who you are, start looking over your shoulder. A double standard by the judicial system, TSB wants to know what our readers think?
Friday, January 8, 2010
"Stabilimaxx is a very sophisticated device, but unless deconstructed, it is challenging to explain."
- Ed Durkin, Marketing Consultant -
Hey Ed, this has to be the quote of the year. Not only is Stabilimaxx challenging to explain, it is challenging to manufacture, and it may be challenging to implant! You gotta love our industry. Press Release: Applied Spine Launches New Website. After how many years? 5 ? Applied Spine is at the point of announcing it has launched a new website. Panjabi needs to find the right people to get this product to the market. Thirty Days in the Hole. Could it be possible that by getting the patient involved in an interactive questionnaire, the patient will be able to convince their spine surgeon that they are a candidate for Stabilimaxx. Isn't that the surgeon's job? Oops! TSB forgot, consumer driven healthcare, the future of spine care in America.
Is the spine industry ready to take the next step in advertising where we become like the pharmaceutical companies listing the potential side effects of having back surgery with some of these devices? TSB wants to know what our readers think?
PS: The animations are nice.
Thursday, January 7, 2010
On January 6th, 2010, in an unprecedented self-serving promotional press release, Vertiflex a leading innovator (huh) of minimally invasive and motion preservation spinal technologies (totally delusional) announced that "two world renowned surgeons" were named as co-medical directors of the company. Scott "I've never seen a deal I didn't like" Blumenthal and Nick Shamie were named to this co-position to assist in the on-going trial of the Superion Interspinous Spacer designed for spinal stenosis.
Interestingly enough, not only has Dr. Blumenthal been a consultant for many a spine companies, he is now also a spine consultant for the Dallas Mavericks, God love the Blog Maverick. Of course a press release of this magnitude is always entertaining especially when someone, an authority no less, makes a blanket statement that Superion is generationally advanced over other alternatives. Can we have a little more depth and substance than that. Where is the evidence? Even Heidi Fleiss has more credibility.
TSB always finds self-promotion an art that can be practiced by some within the industry to unfathomable heights. It's interesting that no one in the industry has ever heard a public statement by any of these surgeons about Superion until they were hired to lend credibility to the product. Is it world renowned or is it another clown, TSB wants to know what our readers think?
Tuesday, January 5, 2010
Recently, TSB and a few colleagues were discussing how much spin goes into marketing many of our "me too" products. Yet, when we analyzed the visual quality of industry ads and websites we started to wonder where did we get all those "Shiny Happy People laughing meet me in the crowd......" Michael Stipe of REM must feel relief that our industry has built its marketing platform and websites on one of his songs.
Is there any creativity and originality in this industry? Considering the low cost of goods sold, general and administrative costs, along with cost of sales, this industry is quite profitable and provides a respectable ROI for investors. Yet, when it comes to creativity in marketing spine, the only grade that can be given is a big fat "F."
So why does this exist? An old mentor of mine once said, "imitation is the greatest form of flattery." If there is any truth to that comment most marketing people and companies cannot develop an innovative platform when it comes to selling product or creating a website. It seems most are "bogged down" in following the same formula. The Legacy companies or Spine Cartel are sterile in their presentation, and the early-growth stage companies are terrible. Shiny happy people smiling......... come on, you can't tell me that the result of back surgery is happiness. Maybe to some, but if I were a gambling man I would bet that the reason pain management has become such a huge industry is because unlike the subliminal message that these websites attempt to send, there are many people that have back pain. One of the smartest surgeons that TSB ever worked with said; "Once you have back pain, you'll always have back pain." So where is all this happiness emanating from? I'm just waiting for the day when someone has an elderly person doing a cart-wheel on their website. Hand-stands anyone? Skate-boarding?
Does anyone think that one day we will emerge from the "Still Life" genre of marketing in spine and start spending some of those profits on some real marketing? Can we enlist some real talent outside the industry when it comes to developing websites? My grand-daddy's favorite expression was, "cheap is expensive." TSB is awaiting for the day when some marketing genius finally starts to think out of the box. Isn't that what marketing is all about? Can anyone explain why there is so little innovation in spine marketing?
TSB wants to know what our readers think?
Biodegradable polymer implants have exhibited some success especially in small joints. Many researchers believe that magnesium has emerged as a primary candidate for biodegradable metal implants. Considering the magnesium is the eleventh most abundant element by mass in the human body, its ions are essential to all living cells where they play an important role in manipulating biological phosphate compounds like DNA , RNA and ATP. The only challenge that magnesium has presented is that it produces hydrogen which can prolong the healing process and could potentially harm the body. The advantage of biodegradable implants is that they dissolve upon fulfillment of their intended function. Obviously this minimizes the long-term problem like inflammation, or in the case of stents, restenosis.
The way magnesium works is that it offers greater strength than polymers and as it corrodes it releases inert ions. The Swiss (who else) Federal Institute of Technology in Zurich has developed a magnesium based glass that has not exhibited the release of hydrogen during its clinical trials. Jorg Loffler and his colleagues have identified a way to circumvent this challenge by adding zinc to the magnesium to form a magnesium based metallic glass. Herr Loffler has developed a rapid cooling process that permits more flexibility in the process quickly cooling the molten material resulting in an amorphous structure that he compares to that of window glass.
By exhibiting no hydrogen , the biocompatible metallic glass could actually serve as the basis for the next generation of biodegradable thickness, as much as 5mm in thickness. This could possibly be used for bone implants. It's like Alice in Wonderland peering through the looking glass. Could this be the future? TSB wants to know what our readers think?
Sunday, January 3, 2010
Recently, the WSJ ran the article "What Doctors and Patients have to lose under Obama Care." Since this summer, the current healthcare reform bill has been inspected, injected, detected, and rejected, by every special interest group and lobbyist along K Street. Yet the question still remains how does the U.S. manage to contain the cost of delivering medical care when it is forecasted that by 2012 we will be spending $4 trillion dollars annually on delivering it.
Depending on your tenure, cost containment in healthcare has been a concern for a minimum of thirty years if not longer. This article touches upon salient arguments made about the penalties and regulations that are aimed at surgeons in the current bill. A major concern is whether the Center for Medicare Services (CMS) should be given the ultimate authority in deciding when and how medical devices and drugs should be used and dispensed with, and how they should be priced on Medicare patients. Contrary to what some commentators have written, TSB is not a socialist considering that no government agency should have the right to dictate what the surgeon can do, but considering that CMS is the federal agency responsible for Medicare, they should have a right to say how much they are willing to pay for products, especially commodity products that really are not bettering the outcomes. It comes down to supply and demand. The economic model of price determination concludes that a competitive market price will equalize the quantity demanded by consumers, and the quantity supplied by producers, resulting in equilibrium of price and quantity. Quod erat demonstratum (QED).
What is disconcerting in this article is that the government is attempting to absolve itself from the same protection that it advocates for subscribers of private healthcare insurance, the appeals process. Obviously, Hays vs. Sebelius sets a precedent that Medicare cannot unfairly deny a patient if the treatment in question is deemed "reasonable and necessary." So the question must be posed to our readers whether the government should have the right to control which medical devices spine surgeons can use on Medicare patients? And, if the device does not improve the outcomes, does the government have the right to decide how much it will pay for these devices? Will this discourage innovation? Or, will it create an environment where inventors and investors will be conservative in how they choose to identify real innovation versus pure marketing before investing their capital? Let's use an example, if TSB launched a pedicle screw that really doesn't improve the outcomes, but offers the surgeon some "intra-operative flexibility" can the manufacturer justify charging more than the competition for the screw, considering that most operating room time is a fixed cost? Many of our readers cry out for free-market enterprise, isn't a by product of commoditization lower pricing? That's the free-market at work.
For years the general public has complained about the insurance industry, but what most Americans fail to understand is that United Healthcare, Cigna, Aetna, Oxford, et al, are not in the business of providing healthcare, they are in the business of risk management. Risk management involves the assessment, identification and prioritization of risks followed by coordinated and economical applications of capital to minimize the probability of unfortunate events, or to maximize profitability. Today, much to our chagrin, the government is attempting to address the healthcare crisis like the insurance industry, looking to minimize its risk.
If the author, Dr. Gottlieb of the American Enterprise Institute truly believes that we will inhibit innovation, all he has to do is look at our industry. Some of the small changes in innovation that he does speak of really amount to nothing more than pure marketing in spine. Innovation means introducing something new, but it also can mean introducing something that truly affects the clinical outcomes. Has the glut of "me too" products really changed the outcomes? We constantly hear people ask the question whether is it new, is it true and will it make a difference? Maybe, only one question needs to be asked; "Will it make a difference?" Because that's what really matters. In closing, Dr. Gottlieb makes it sound that the government will be the impetus for private insurers to take its cue from Medicare, yet, haven't private insurance companies behaved in this manner all along? TSB wants to know what our readers think?
Saturday, January 2, 2010
Recently Drue DeAngelis wrote an article on his website pertaining to Building Management Teams in Orthopaedics. Kudos to the new Orthopaedics and Spine News platform. The article is quite informative, yet, TSB believes that what he failed to discuss was that there is a distinction between what constitutes a great leader and a good manager. Whether you are hiring a CEO, Regional Sales Manager or Product Manager, leadership is important, especially in a start-up or early growth stage company. Leadership can make things happen at an accelerated rate if the right scenario exists. The culture and business model at these companies is different than being employed by an established organization.
Many start-ups have succeeded, yet, there have been many that suffer from what TSB calls the, "I can't get out of my own way syndrome." It's the endless enigma, Ego. The primary reason this occurs is because the individual(s) that started the venture does not have the necessary skills to run a company. There is a difference between developing a product and motivating people to execute. One takes engineering, scientific and listening skills (hopefully), while the other takes someone with a defined vision, knowing how to engage and inspire people, create accountability, build a plan, generate ideas and produce results. Essentially, it takes team work and empowerment. Resistance in a leader seriously compromises one's ability to embody the character traits and perform the functions of a leader and manager. What you learn in the spine business is that many times the job really doesn't go to the most qualified person. It can be argued that the best leaders are those that truly have the ability to think out of the box. Why? Because life's experiences have built a box around most of us. You become more fixed in your beliefs, habits, reactions and behavior. Most people are too busy, distracted, stressed out, unfocused and ungrounded. We are too mired in the past or the future. But it takes more than just thinking out of the box, it takes someone with integrity, clarity, transparency and the ability to be open-minded. The problem in most of these small companies is that the person(s) that started the company usually resists other ideas.
With that said, why do investors and board of directors look for people outside the industry? Could it be that they lack the ability to really gauge someone's skills? These individuals usually come from finance with no industry or people experience, or are even surgeons from our industry. As TSB has written on numerous occasions, it seems that we can't get out of the box in this industry because we are constantly rewarding people that bring the same tired principals and experience to the game. What once worked at a DePuy, Danek, or Medtronic fifteen years ago, or even one year ago, is not going to necessarily work at an early growth stage company because of the difference in culture, dynamics and minimal product portfolio. In addition, a leader at a small company is not a leader per se, but a worker bee. An early growth stage company needs leaders that have the capacity to wear multiple hats in the course of building the business. Just look at some of the companies that we have profiled over the last year. Seven layers of senior management for an organization that generates ten to fifteen million in revenue? Tell me that this isn't Einstein's definition of insanity.
So the next time you are looking for a candidate to fill a position ask yourself the following questions:
Does the candidate know their values and beliefs?
Is the candidate self-defined?
If hired, can the candidate develop a vision for the organization? Remember at that point the candidate may not even know what you have in the Intellectual Property pipe line.
Can the candidate connect their vision to a strategy and execute?
Is the candidate flexible and forward thinking?
Will the candidate be inspiring and credible, meaning do they know the business?
Is the candidate focused?
Do you think the candidate will be accountable yet be willing to take risks?
Will they facilitate personal growth to the team and its members by empowering them?
Can they be a thought leader?
Can they create a collaborative environment?
Does the person have a genuine interest in people?
Are they eager to learn and lead?
Do we ourselves know what we are looking for?
Do we ourselves have a defined strategy?
TSB is sure that our readers can come up with some more questions, but let's face facts, this isn't brain surgery, or, for that matter spine surgery. All it takes is a little time and preparation to find the right person for the job. Maybe Drue is right, you're better off letting someone with the DeAngels' experience handle the search for you. TSB wants to know what our readers think?