Tuesday, July 20, 2010

Biomet Spine - Give Us Liberty or Give It Death!

On Monday, Biomet reported that sales from spine related products rose 1% to $62 million last quarter. During a July 13th earnings call Jeff Binder commented that the company was looking to place an emphasis on "highly differentiated" products. So what is Biomet leaning on in the short-term? Binder stated that the company was hoping that the Polaris (a deformity system), the Solitaire (an anterior system), and the Trivium (a derotational system) would stimulate lagging spine sales.

Supposedly, "upgrades are coming, and some pretty neat product ideas" will come to market later in the year. But the question must be asked, is Biomet a real player in the spine market when you compare it to other legacy companies? Binder whom is regarded as one of the "good guys" in the industry has his hands full at this company. He inherited a spine management team that was dismantled by Dane Miller on that Black Monday when he flew into New Jersey and terminated the likes of Pastena, Bracco and the rest of the clan that wasn't really doing anything except milking their time. Prior to that, EBI spine was viewed as a dog, and to this day many in the industry do not really view them as a threat. Binder is hoping that by integrating the Trauma division to Warsaw, Poland during the second quarter, this will allow those lucky enough to remain in Parsippany, NJ to focus their efforts on spine. The trauma people just don't know how good life can get in Warsaw until they get there. TSB would recommend that they stop over at Bob's for dinner and Spike's Beach Grill (Volleyball is in) and have a drink on TSB. But remember, always be aware of who is lurking around you, DePuy and Zimmer spies are all around.

With sales lagging primarily due to an inability to deliver sexy products, Binder stated that the numbers were affected by pressure on pricing in the overall market. Here's a word of advice for Binder. Spend some of Blackstone's, Goldman Sachs, KKR & Co., and TPG's money! Dane Miller was a great leader for his time. Unfortunately, Dane was one of the cheapest CEO's that TSB ever met. He knew how to take care of himself along with his lifelong buddies including nice Lear Jets and CC memberships at Stonehedge in Winona Lake. Pay your employees some more money, stop recruiting people telling them the cost of living is cheaper in Warsaw, and lastly do something with your trays and instruments. Marketing is about making something look sexy and expensive, even if it's a dog. Just look at Synthes trays and instruments. But that's been one of Biomet's achilles heel. In the end Binder's job is to position this company for a potential future sale, considering that was in the discussion as far back as late 2006 and early 2007.

Spine has always been the bastard stepchild for this organization, hopefully the powers to be can figure out what to do and spin this company off its balance sheets. TSB wants to know what our readers think?

17 comments:

  1. Synthes' trays and instruments? I always thought they were rather plain.

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  2. 8:48....I totally agree. I would never look at Synthes as a "marketing role model" in anything

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  3. He meant that Synthes instruments have always been something the surgeons like. more feel than appeal.

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  4. How legit is it that these guys are trying to bring the spine division out of the gutter and then sell it?

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  5. Wasn't that the original plan? Why would you move Trauma to Warsaw for consolidation and leave Spine in Parsippany? There are many hard working people in the field, but let's face facts, most of the people using their products are consultants.

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  6. Think so huh? They don't have much of a presence in the Midwest by us. Could be a trap for a solid distributor to flip to them right now and build the business just to have the carpet pulled out from under them.

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  7. It is fishy they would bring a division like Trauma which is on its way back so to speak back home and leave the struggling spine division in NJ!

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  8. If sales are lagging because they are unable to deliver sexy products, then they need to get a new staff of engineers that are capable of delivering innovative products into the marketplace.

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  9. Their Spine products have sucked since they have had spine. I worked for EBI about eight years ago and trying to sell Omega, Spinelink and Vuelock was very difficult and I don't think their products have gotten much better. If your not getting paid by Biomet or you don't really love your representation objectively why would you use these products. Half their revenue in spine is from stimulators which puts their hardware numbers at about 120 million. Off the top of my head that is about twelth in spine hardware sales. Biologics suck too, Pro Ossteon anyone? Oh well, they still have stimulators. Anyone want to buy a twenty year old technology whose revenues are on there way down.

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  10. At least leaving the spine division in NJ will have some bargaining power. Who the hell wants to live in that 'pit of northern Indiana? They can go on and on about cost of living and supposed proximity to Chicago (try that drive in the dead of winter) but fresh faces out of good colleges who are the future of companies generally do not want to be in a sleepy hollow like Warsaw or Ft. Wayne

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  11. MaxAn! it's sharp rings and profile at full angulation...talk amongst yourselves. Or on this blog, whichever.

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  12. The problem is that there are eighty or ninety little spine hardware companies all selling pretty much the same thing out there. The only thing Biomet has in spine that few others do is stimulators, but their execs don't understand the technology, nor do they care about it. Given all that, Biomet has a long way to go to make itself stand out at all.

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  13. Is MaxAn back on the market? At last checked it had been pulled.

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  14. It is still kicking, I never saw a lapse of it's use. Why was it pulled?

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  15. Sincere apologies if it wasn't pulled. Was under the impression that it had been within the last few months. Perhaps I am thinking about their other plate system,Vuelock???

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