Wednesday, July 28, 2010

Once again, XLIFTS NuVasive!

NuVasive announced QII 2010 revenue of $119.6 million which was an astounding 35% increase over the $88.5 million for QII in 2009, and a 9.6% increase in revenue over QI of 2010 which was $109.1 million. With two quarters under their belt Lukianov has upped his prediction estimating $485 to $500 million by year end. Given that most of NuVa's products are "me too," it seems that XLIF and Osteocel have grown some big shoulders this year carrying the weight of the Big Bear's predications.

Considering that the guidance for this industry has been downgraded by every analyst under the hot summer sun, and the industry has been slow and flat (TSB is starting to sound like Tom Freidman), kudos must go out to the NuVasive Regional Managers and sales people that continue to accept the Czar's challenge. Talk about putting a bit of pressure on the troops, wait until winter comes. This may be NuVasive's greatest challenge since Adolf Hitler declared his intent to hit the USSR on August 11, 1939. If they continue their campaign to move up the ladder, the Czar must reward his troops with jeweled Faberge eggs and bottles of Chateau 1982 Pauillac. If Lukianov truly believes in patronage, you know what they say, "to the victor belongs the spoils." Besides a nice relaxing dinner at Dolce Pane E Vino would be worth it.


  1. It does not take exceptional sales reps and regional managers to sell the hottest product on the market. It's like saying Apple has sold 3 million iPads because of the local 20 and 30 somethings working in their retail stores. The popularity is based on word of mouth, novel product appeal and exceptional training of surgeons. Reps and managers are an afterthought.

    The rest of the industry is catching up with the XLIF platform. I give it 2 years before competitive companies take back NuVa's significant market share.

  2. Although a great number by most companies standards, this fell short of Nuvasive forecasts quite a bit

  3. Anonymous 9:04

    You must be Mrs. Lukianov coming to the defense of the Czar. It still takes a village to raise a child, or was the saying, never drink alone, you never know when you'll need a ride home. Regardless whether the product is hot, it still takes commitment and drive to make it happen, and I've never seen one person do it alone.

  4. NuVa clearly has a strong leadership team at the top and is one of the most powerful marketing forces this industry has ever seen, but I agree with 9:04 in the sense that this is hardly the accomplishment of the sales reps and people "on the ground".

    The Xlif if a great procedure and NuVa has manhandled the market because of that, but these sales numbers are far short of what was predicted. This can only mean ratcheted pressure on the sales folks to sell from the "me too" bag and thats going to be a tougher road than what they are used to. As a competitor of NuVa I am in awe of its marketing and PR machine withought a doubt, but not impressed in the slightest by the reps or "clinical specialists" (In my area at least). Just an honest opinion.

  5. I find it funny how every slobbers over NuVa and the brillance of it. Has anyone stopped and thought that this was a procedure looking for a patient? I have been in this industry for a long time. Degeneration of the lumbar spine usually went from the bottom up. That is until Xlif came out. Now fusions are needed at L1-2, 2-3 on virgin spine. I cannot be the only one who thinks this.

  6. obamacare will change that

  7. don't take to much credit away from the sales reps. Their role is critical to the companies success. XLIF is by far the toughest procedure to coach a surgeon through. The training is intense and having a good rep is essential. As far as the regional guys they just pound the reps to hit their numbers, run their trays and get p.o.'s in at the end of the month. overrated as far as I'm concerned. Good company but they ride the reps way to hard and they are not compensated nearly enough.

  8. You think the managers ride them hard. How about the surgeons who ride their barbie doll reps driving porsche 911s?

  9. I am a competitor to Nuvasive, but a competitor that has a great deal of respect for what they have accomplished over the past few years. Lets be honest, they have succeeded in creating a cult following through a technology that was ready for its time. Senior management has done a masterful job guiding the ship through an industry that has certainly known more robust times.
    I am not a talented market analyst that follows trends and financial results on a daily basis, but I am what most would consider an old dog in the spine industry. Been at it for nearly twenty years now. I am too busy racing the race to worry too much about things I can not control.
    What I have been seeing recently concerning Nuvasive's reps, local business and financial announcements is interesting to me and tells my gut that something is up.
    During recent interviews of successful Nuvasive reps(looking to make a change!) I learned that corporate staff is razor thin and thinning, sets are very difficult to get from loaners, and even more so for consignment. The flow of new product is dramatically slowing. Again, these are Nuvasive guys saying this, not me. They have all said that the floor is shaking and it appears the company is being shaped up for sale.
    Why would these guys want to sell? The monopoly has dried up. Competitors have launched their systems that are taking chunks out of Nuvasive's market share. The BIG BOYS will drive further cuts in NUVA's share through compliance deals and restrictive vendor decisions at hospitals. Then there is pricing pressure. The most recent spate of RFPs that we have responded to have included cap categories for lateral approach devices. The average price cap has been about $3500 per device. Can we all say "oouch"! That will definitely rain on a Nuvasive senior manager's parade.

    The Nuvasive senior management has a responsibility to share holders and its board to maintain strong financial results. They know, considering the lack of diversity in their product sales, that this is going to become much more difficult in months and years to come. Growth is going to slow dramatically.
    What did our dads tell us growing up about investing? Buy low, sell high. No when to hold em and know when to fold em. My bet is that senior management fears a serious threat to the overall lasting value of their company. Stock has taken an absolute pounding the last two months. Don't buy now, more bleeding to come. They are probably looking pretty good about now to any company looking to enter the lateral market (Stryker?) that also has a little cash laying around.

    I wish I had a crystal ball and knew what would play out. Whatever happens, the Nuvasive Team has had an incredible run and they should be very proud of their accomplishments. Excellent work guys. What ever you decide to do with the company in the near, or distant future, you have been a most respected adversary.