Tuesday, March 16, 2010

Irrational Exuberance, Is It Running Its Course?

Recently, TSB posted asking our readers if they had heard anything regarding a company called Medical Dynamics? The initial response that we received was, "was this the best that we can do, considering that the AAOS was meeting in the Big Easy?" Based on some of our readers comments, and TSB's conversation with some of our "eyes on the street," there wasn't anything really earth shattering at this year's academy meeting.

TSB has never believed in attending the AAOS. Years ago, spine broke off and created its own venues. As one reader so eloquently stated, "there are way too many meetings in this industry." Besides, why would we attend a meeting that really caters to the reconstructive, sports, and trauma markets? But that's not what this post is really about. Today, we wanted to discuss the irrational exuberance that still exists within our industry, especially when one looks, or can't avoid looking at the stock performance of some companies over the last few weeks. How does one company's stock decrease, and then increase an estimated 63% on news that there were no reimbursement issues to begin with? Yet, another company can report that they have had one of their best quarters ever and the stock continues to "slog" along? Obviously, much has to do with the analysts' spin on what is hot and what is not. In addition, one must speculate as to how much of their own capital do they have invested in specific stocks?

Do any of our readers, let alone the analysts' understand the long-term strategy of some of these companies, and, is there a defined road map to where they are going? Or, will some of these companies continue to ride an existing product in hope of finding the next new, new thing for their portfolio? It is apparent that many of the early growth stage companies take umbrage when TSB asks the question, who are these companies? Some of our readers believe that it is an assault by TSB or the legacy companies on their existence and survival. Is it an attack on their freedom to operate, or are they responding to their vulnerabilities in a free market? Yet, it is evident that any business where you can sell a product and make fast money is going to attract some nefarious characters. In many respects we are a mirror image of those that create mortgage bonds out of sub-prime loans hoping to sell their portfolio to the larger investment houses. The problem that all these companies face is that they have been exposed as having much of the same thing, looking to operate in small markets, avoiding too much exposure.

It will be interesting to witness how many of these companies attend the next set of meetings. Minimizing one's expenditures has been important for many of these early growth stage companies in order to survive in the current economic climate. When OTW advertises asking the question, are there too many spine meetings, or, are there too few good spine surgeon meetings, you know they industry is pulling all stops to keep people spending their money. And if OTW is offering subscriptions at 30% off the current rate, are they looking for new subscriber's or is this a sign of the times? TSB wants to know what its readers have heard about the current climate in the industry? You voice, is the only voice that matters.


  1. OTW going to throw in a football phone if we order before midnight tonight? Though I am proud of you for going all of Monday without one OTW/Robin Young reference.

  2. I dropped my OTW subscription and they have contacted me at least 5 times to try and return. Definitely a sign of the times

  3. Robin Responds,
    yes, times are tough and everyone is squeezing the nickel till the Buffalo shits. OTW is doing fine, our 30% discount refers to subscribing to both OTW and OTM. But, the larger point is that we, like everyone, have to work hard for every dollar. We have to earn our reader's loyalty with strong content and strong writers. It's not easy. It's not for the faint of heart.

    In effect, every day we're unemployed and every day we have to prove ourselves.

    If we upset someone, like one of our advertisers, they can (and have) cut us off.

    We ALL play in a world that is essentially like a hockey game.

    My opinion.

    Definitely NOT anonymous,

  4. I want to thank you, Robin, for continuing to focus on the niche of this industry that matters to me....I think a lot of people forget what it was like before Tony Viscogliosi and others such as yourself began covering this market specifically.

  5. No, we have not forgotten what it was like. It was the time that people in the industry at large actually still focused on patients, instead of on patents, consulting contracts, PODs, buy-outs, in short, $$$$$$.

  6. This article is written like a 3rd grader wrote it. Do you ever proof read your work?

  7. "No, we have not forgotten what it was like. It was the time that people in the industry at large actually still focused on patients, instead of on patents, consulting contracts, PODs, buy-outs, in short, $$$$$$."


    Back then the Ray and BAK cages were the new thing, that was the best for patients?

    I find your comment ignorant.

  8. Interestingly, I find your comment ignorant to assume that Ray and BAK cages were the "new thing". Many of us remember the good old days as those when there was Sofamor-Danek, AcroMed, Synthes, and the newcomer DePuy-Motech. The cool new things were Polyaxial screws, the Z-plate, Harms Cages, the first cervical spine locking plate (CSLP), etc. Product sets were sold to hospitals and consignments were a "new thing".

    Back in those days it really was about making and selling cool new products in an exciting new field, and working closely with the leading spine surgery experts, whom you didn't have to pay, or pay much, to get their time. The logic of "build a better product or provide better service and the dollars will follow" never held more true in our industry than it did in those days. It still is the right business philosophy, but just much more difficult to pursue. Unfortunately.

    Anonymous is right. Robin and Tony, as well as the large corporations that have entered the market, have done great things for the "business" side of the business, but many of us remember the purity of this industry in its youth. It would be nice to see some elements of those days return.

    Sign me: Remembering...

  9. To anonymous 9.40

    The BAK cage at least was an innovative application of translational research and tried to provide a solution for a problem for which the existing solutions had some major drawbacks. I agree that the results were disappointing, and that that was recognized and made public later than it should have been. That may have set the stage for the 'speed' with which information on the potential side effects of products such as Infuse are being disseminated today. One can argue that the sale of the BAK cage for 10X sales was the beginning of the long slide. People I implicitly referred to in my comment include Roy-Camille, Cloward, Wiltse, Dubousset, Lin, Steffee, Shufflebarger, Nachemson, Heinig, Asher and more surgeons from those generations, who did put the patients first. But that was probably before your time.

  10. I remember back when APLD was new, that's about as far back as I go. That was BEFORE cages, btw.

    What I see is that spine surgery was stuck in a "fusion" mindset prior to the flood of new products ushered in by a critical mass of PATIENT NEEDS being seen by surgeons with entrepreneurial interests combined with MONEY from institutional investors.

    If you needed spine surgery, would you rather have to choose from what was available in 1989? 1999? or 2009?

  11. I love the defense of fusion cages as the APEX of our technological offering to patients.

    The lates 90's sucked to be a spine patient....

  12. Being "really old", I remember Cloward and many, many other surgeons putting in tons of autograft bone dowels with no plates and getting really good results. Not sure results are much better these days, other than no graft site morbitity issues and no collar.

  13. March 18, 2010 10:43 AM
    Anonymous said...

    So, you would choose technology from the 80's if it was your surgery?

  14. Yes. Mainly because in those days the indications to do surgery were much more strict. Surgery would be done because you needed it, not because it is so profitable to the ones doing it

  15. I think you are not really staying on point, forget abstract anecdotes.

    If it were YOUR surgery, and you, you know, being such an expert and everything, aren't going to just let someone DO something to you, you are going to have an opinion about it yourself, right?

    So, stick to the question:

    If you were planning YOUR surgery, would you rather select from technologies available in 1989? 1999? or 2009?

    The question was not, "which medical/legal/ethical environment do you want your medical decisions made for you in..."

    Which "menu" of options would you LIKE to be able to choose from?

  16. The menu of 2009, provided it still includes the options from 1989 and 1999, or even before. For example, for a single level ALIF I would opt for three or four truly sterilized and biologically inert tri-cortical blocks supplemented with some iliac crest cancellous bone harvested using a trapdoor technique, and no plates. That was already done in the 50'S.... The problem could be that there may not be many surgeons anymore who have the necessary training or skills to do this. From recent times I might add a good synthetic to expand the iliac graft, if necessary, but that would be it. I certainly would not want a disc.