Thursday, May 6, 2010

Everyone Wants to be like Mike

Our last post focused on the rise and fall of Trans 1. Ironically, on the day that TSB posted skepticism surrounding the future of this venture, OTW shot off a report that Mike Matson, Senior Analyst of Wells Fargo, raised his projections for this fledgling company from $24.9 million to $26.7 million For a stock that had a 52 week high of $8.74 and closed at $3.45, blue skies are not yet visible on the horizon. So let's go to the video replay.

In QI of '09 TSON finished with revenue of $8.7 million, QII '09 revenue was $7.9 million, QIII revenue was $6.9 million, QIV revenue was $6.3 million, QI '10 revenue was $6.7 million. I'll save our readers the fancy charts, we believe everyone can get the picture. Regardless of the growth in '09 in comparison to '08, it seems this company has taken three steps back to attempt to go one step forward. The potential investor must ask why? To quote every NBA player that is interviewed, "no doubt about it" reimbursement is the major issue. Yet, when one looks at the history of this company, something seems amiss. There doesn't seem to be continuity in the management team. 2010 has been a year of wholesale changes. TSON actually hired someone from Smith and Nephew to run sales. As Bart Simpson would say, Wazz up with dat? Then TSON hires a new President and COO, then a new CFO. If things are going so well, why the change? But the bigger question must be asked, "Why from SNN?" At best SNN has been a mediocre player that dabbles in spine with mediocre management.

Yet, Matson's job is to spin, sell, and make sound suggestions to the investment community on what to buy. I mean has anyone heard an industry's "go to guy" ever say that this stock or company is a dog at best, until some real revenue issues are resolved? That's not the nature of the Street, and maybe Mad Money Cramer would be the only one to comment, but when it comes to spine he doesn't know jack. TSB is sure that the smoke and mirrors behind Mike's (you don't mind if I call you Mike) call is to convince potential investors that this is a great technology to invest in, a stock worth buying, and a company with a stable management team.

TSB does not believe that QII sales will grow exponentially to offset the last three quarters. This pony isn't NuVasive. Unless there is an act of God (let me spell that with a capital G) don't expect sales to jump drastically in QII, with the summer on the horizon, TSB sees a summer slump due to the nature of the season. $26.7 will be a stretch but it can be achieved if the stars align themselves. So let's keep our eyes and ears on this company, and assess whether a remodeled management team can actually sustain, execute, and generate more revenue while it attempts to address a daunting task of resolving their reimbursement issue. One must wonder whether the infamous partnership between TSON and Life Spine is really going to pay off. At best Life Spine is just another "me too" company.

Wilmington, is a nice place to visit, especially in the summer. TSB must ask our readers will this company succeed or will TSON hobble along?


20 comments:

  1. Chirp, chirp, chirp...

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  2. Musk Man, it's clear you have an agenda against this company. Why else would you so frequently post about them.

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  3. No Agenda. Just reporting the facts. Question: How many times have we posted about them? Answer: Only when they have been in the news. Yet, it is interesting to note that TSB published the post about TSON and soon thereafter OTW published something. Coincidence? No need to have an axe to grind just analyzing the way this company is being managed. Besides: Do you believe everything that Matson writes? His job is to put a spin on all of these companies. Ever wonder what his portfolio looks like? It's taboo for an analyst to say anything realistic let alone anything negative. But you know what Sgt. Joe Friday once said; "Just the facts M'am, just the facts!"

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  4. Facts schmacts

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  5. Anonymous 12:50:

    Sound like a little sour grapes. What's a matter, y'all at TSON a little thin skinned?

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  6. Having worked at TranS1 in the past, I can only tell you this:

    The company can go nowhere but up, because they have hit rock bottom. Layoffs, reimbursement issues, poor management, the list goes on.

    Needless to say, I don't know that it can get much lower. Somebody needs to buy this dog of a company and put it out in the back yard. Keep the collar (the product) because it does have some value, but get rid of the incompetant layers of management.

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  7. It's interesting that people challenge TSB whenever we post something about a specific company. Yet, our readers fail to realize, that never once have we attacked the device, nor have we questioned the efficacy of the procedure. Our objective is always to leave that up to a court of public opinion, the readers, which we hope is made up of surgeons and industry related professionals. Those are the opinions that count, not some analysts who never has been in the trenches on a day-to-day basis. Yet, if our readers notice the above post what is the main point, incompetent layers of management. So why does a company fail or hit a point of inertia? It's always the people running the show, unfortunately, the foot soldiers are collateral damage. I guess some people don't have mirrors in their houses. Thanx Anonymous 2:54

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  8. Well said MM. The Titanic was the greatest technological achievement of its time... management was its problem.

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  9. MM, you can pretend to be PC and state just the facts. But you know full well that the bashing will begin with a TSON post. Thusly, you can pursue your agenda against this company by merely posting about it.

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  10. No bashing necessary. Their sales numbers and turnover speak for themselves.

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  11. AxiaLIF looks like a nice although somewhat detailed procedure, however without coverage and adequate RVUs it's dead in the water...

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  12. At least the changes in management are with solid people. Reali was at Stryker before he went to SNN. He is a solid citizen who should be able to turn things around. Time will tell.

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  13. TSON biggest internal problem? Two words..Rick Simmons (mini Ricky Ricardo). They have put him back in the closet, so their chances of success go to one in a million (so what I'm saying is they have a chance).

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  14. Someday, somewhere, someone in medical will figure out to have a blockbuster product it has to be better, faster, cheaper (or at least around the same price) and able to be revised. I think the Trans1 product is a novel innovative product/approach but they have yet to demonstrate that this product is better, faster, cheaper or revisable to most surgeons and all hospitals. In fact, it costs more, takes longer and has no long-term data/very little data to support its efficacy (I am talking about randomized prospective studies from authors who are not paid by the company with a statistically valid number). I have heard that revisions are very difficult although I have not seen one or spoken with a physician who has done one but I can't imagine how you would unscrew this device if there has been any bone on growth/fusion. For those that would ask, "why would you have to revise it if there was bone growth/fusion" I am guessing the answer is infection or pain. Add to this the company was hell bent on rolling out a direct sales force before they knew if the product would be well received for the obvious purpose of going public (see Conformis in Ortho) and they continued that failed strategy after they went public instead of buying revenue/profit generating "me too" products. Some company will buy them shortly for the IP and hopefully the product and sales force will be improved upon and this may end up being a viable product one day. Till that day, natural selection holds the future for this company and all the other companies this size as downward pricing pressures continue. Hospitals are businesses and they cannot afford to pay 10K+ for products they are not reimbursed for and lose money on, end of story and just because you get reimbursed in California or Texas doesn’t mean Alabama and Tennessee will pay for it!

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  15. Good to see a post with a positive attitude behind it - although a fair amount of it is not accurate.

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  16. So you're willing to state that the above post was positive, let's hear your why you believe it's not accurate?

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  17. Way to continue to stir the pot MM. Not much metal left on that ax.

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  18. This comment has been removed by a blog administrator.

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  19. what's the story on the new VP of Sales Dwayne Montgomery?

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    Replies
    1. Same asshole different company

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