Tuesday, January 12, 2010

Trans1 and Life Spine: One Night Stand or Long Term Love Affair?

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?


  1. I don't really know if LifeSpine/Avatar is the right choice but they had to do something!

    TSON is the only "growth" company I'm aware of with at least 5 consecutive quarters of decreasing revenue. Nobody should be surprised that their market cap is +- the same as their cash position.

    I frankly thought they should have cobbled a full bag together the very second they got the cash from their IPO.

    Reimbursement "confusion" aside, the AxiaLif (aka the butt-bolt) is a sideshow product you can't build a company on. As a door opener for a portfolio - sure...

  2. Yikes, a direct sales force trying to sell a startup's pedicle screw system?

    Sounds like a little desperation or naivete at best

  3. A direct sales force selling a pedicle screw system?? If my facts are right didn't it worked well for IST....

  4. I heard that Disc Dynamics (Dascar) has already closed shop. That's 95 mil down the drain. Ouch!!!!

  5. Trans 1 and Life Spine is a match made in hell. Two leaders, one as ruthless as the next. I wonder who will be able to knife the other first? Stay tuned

    Dr. Spine

  6. Life SPine and other "Me Too" Companies.
    As a orthopedic specialist for over 20 years, I have seen it all. Life Spine, like so many others claim to be be the "6 Million Dollar Man" of medical...being faster better , oh yeah and cheaper. I always am amazed at these companies that say they don't have any of the red tape that the big companies do. Does this imply that the big companies are too big? Well they did get big for a reason, which is design robustness, detailed market and Risk analysis as well as design reviews.
    Most of these smaller companies try to leverage their vendors....buying from the cheapest guys in the US and China and opening a huge risk factor to poor products and controls and unforeseen risks.
    They keep their design cost down by copying everything under the sun from existing designs.
    While they claim to be fast, is their speed going to offset the Synthes and Medtronics name brand recognition and or huge network of people?
    What about designs and research?
    I ask, what is their value proposition?
    Is it superior research?
    Network of Surgeons?
    Technical expertise?
    Training and education for surgeons?
    Less invasive surgical procedures?
    Improved mobility and reduced healing times for patients?
    The only way these small guys are going to make it is through innovation, which means access to superior engineers, capabilities research and yes capital.
    In the end I believe that most of these smaller guys are fixated on market potential and hope to "fly around" the periphery like a mosquito and get enough attention to annoy one of the big 3 into purchasing them!
    Caveat emptor

  7. As a representative for the "little guy", I say "gottdamn... this is factual." I have fought "The Big Three" for 14 years. One can beat them on the individual level. I make a better living than 75% of all their reps. However... their top reps. are very polished and worth every dollar they receive.

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