Tuesday, November 30, 2010

Do Not Pass Go, .........

If anything 2011 could be the beginning of a new legal era in spine.   Michael Huggins, Tom Higgins, Richard Boehner, and John Walsh could become the first white collar defendants sent to jail under the 1975 Park Doctrine which would hold them responsible as corporate officers whether they intended to break the law or not.  On Tuesday, November 30th, 2010 Synthes put closure by pleading guilty to dozens of crimes related to their unauthorized tests on some 200 spinal surgery patients, three of whom died on the operating room table.

In 1975 the SOTUS upheld the conviction of John Park, the President of Acme Markets Incorporated, on the theory that people that manage businesses that make and sell products that are regulated by the FDA have an affirmative duty to ensure the safety of the product.  The Court concluded that the government can criminally prosecute a corporate officer who is in a responsible relationship to some illegal activity by the company even though that officer did not personally engage in, or even know about that activity.

In the past 15 years there have been very few pure Park cases in which the government solely charged a misdemeanor against a company official on the ground that due to the official's position of responsibiltiy, within the company, the official should have prevented or corrected the deficiency.  But the question must be asked, is this an opportunity for the Department of Justice to prove to the industry, once and for all, that the Park Doctrine is not a paper tiger?  Recent changes to the Sentencing Guidelines could spell some jail time for Mssrs. Huggins, Higgins, Boehner and Walsh.  Considering that Synthes/Norian had documented violations harsh penalties could await those that have already plead guilty to misdemeanor charges.

But the bigger question that must be asked is why didn't the government go after Mr. Famous (#7)?   After consulting with attorneys regarding this case, the consensus seems to be that all four individuals will in all likelihood do some time.  Judges and prosecutors frown upon cases where innocent people die.
Maybe Wyss will get some Judge out of retirement to cut these boys a break, but then, maybe not.  You know what TSB says, it's a new dawn, a new day.

Monday, November 29, 2010

2011 A New Decade In Spine

"Business demands a docile government and unrestrained corporate freedom, there must be balance."
                                                            - TSB -

2010 will be remembered as the year that spine was brought back to earth.   Just like Ziggy Stardust, the industry was technologically promiscuous, almost drug induced. glutting the market with more versions of me too products in hope of windfalls only to destroy a once thriving industry with its own gluttony.  What precipitated the changes that have taken place in the spine?  As the industry enters a new decade, an autopsy on the last ten years is quite revealing.  Our bloggers know that commoditization and capped pricing have become the norm, rather than the exception.  Some companies are holding strong, despite a decrease in revenue due to the economy, and, third party payor denials. The next few quarters will tell a compelling story for those companies. Here are some concerns you have expressed during the past year;
  • Are we developing products that improve clinical outcomes, and benefit patients?
  • Has healthcare economics re-aligned growth expectations?
  • Have our wages/salaries really increased in the past ten years?
  • Why are surgeons and investors concerned with how much money salespeople earn?
  • Will the government step in and outlaw POD's?
  • Have stem cells become the industry's derivatives?
  • When did this transformation really begin?
The years leading up to 2010 have provided the spine industry with many "so-called" breakthrough technologies.  And no fellow bloggers, we are not talking Blackstone Medical type breakthroughs, that corrupted, and shifted practical ethics in spine.  If there ever was an albatross that lingers around the industry like a bad stench, it's name was Blackstone Medical, indicative of the efforts that Orthofix made to distance itself of any association to a sordid past.  The effective demand of the market has been to identify technologies that enhance outcomes, yet at the end of the day, the financial objective is to  make those that lead the crusade, rich.  It's time that some industry executives spare us their stories of how a personal injury changed their life, and sent them on a mission to heal the sick, and feed the hungry. That my fellow bloggers was another lifetime.  Today, profits take precedents over outcomes.  

For better or worse, the crossroad in spine was 1999, when the Viscogliosi Brothers acquired Pro Disc from Aesculap AG.  This marked the first time an investment banker/ research analyst took the reigns of a spine company.  The efficacy of fusion was being hotly debated, and, the Europeans were years ahead utilizing newer technologies, materials and methods.  One has to express cynicism when industry executives decry socialized medicine, but rely on Europe, South America and third world countries to test drive their products on foreign lab rats.  Without them, where would the U.S. market be?  Total Disc Arthroplasty was not only going to return patients to early mobilization, it was touted a superior alternative to fusion.  U.S. investors and surgeons jumped on the bandwagon.   Tony Viscogliosi was quoted as saying, " the Pro Disc will transform spine surgery by replacing a high percentage of fusion procedures with disc replacements."  Just like the Great White, Wall Street and the investment community circled the waters.   By Viscogliosi's estimates, the total disc market would grow to $3 billion dollars by 2008.  Was that anything like his vision that one day we will have one rep for one surgeon?  From God's mouth, to our ears, the race was on.  All of a sudden there were more private equity investors than a roomful of cockroaches, when the lights go on in a New York City restaurant in the middle of the night.  This ushered in an era of investment greater than the California Gold Rush of 1849.  Like any paradigm shift, the new new thing was to leverage others capital to increase one's wealth, and, with that came demands that the spine industry assimilate the persona of financial markets rather than behave like a healthcare oriented industry.  What the oracles of Wall Street failed to grasp was, that healthcare unlike finance, has broader oversight and regulation in the form of third party payors and the FDA, rendering it impossible for quants to create algorthims with super computers that could erase product development protocol and approval guidelines.  Many of these people believed that their money and power would change the rules of the game.  The benefits of TDR is still debatable, contingent on appropriate patient profiling and advancement of disease.   What we have learned is that an industry that was once built on long-term results became short-term oriented.  Things had to get done faster than ever before, witnessed by the constant complaint that the FDA has too much oversight in commercializing products.  Today, product development is in a transitory state.   Dynamic Stabilization is DOA, witnessed by the "For Sale" sign that pioneering Applied Spine threw up earlier in the year.  If Panjabi can't get it done, who can?  Disc Motion Technologies cannot raise capital to keep its posterior disc and dynamic system afloat.  BMP's are under attack as being too expensive in an ever increasing hostile cost environment, and even ISP devices are under scrutiny.   All one has to do is look at facet fusion technologies and wonder how long can this scam go on?  The last few years have led to more failures than success stories with a cadre of start-up and  early-growth stage companies folding while those that survived are in a holding pattern, flying on vapors.  The industry is moving away from hardware and looking for software as an alternative to fusion.

Spine industry stasis.  Essentially, there has been an inactivity in emerging technologies in spine since the total disc.  Since the inaugural stem cell meeting at the Chicago Airport in 2006, stem cell mania has picked up momentum, with more capital being invested in development, marketing, and commercializing what many argue is old technology with a new spin.  Like derivatives, stem cells have a value based on expected future movement as an asset.  The industry is looking to replace BMP's, TCP's, and other biologics with stem cells, in hope of a tremendous payoff.  Spine surgeons are much more fixated with stem cells in comparison to general orthopedists.  The ultimate goal of those leading the crusade is to convince clinicians, third party payors, and hospitals that stem cells are the golden goose.  Unfortunately, stems cells continue to look like an exotic derivative.  Companies are hoping that by leveraging its underlying value it will lead to pull thru revenue.  In essence, companies are hedging their futures on the new new thing.

A concern that we hear from many of you, is that you are making less money, or,  you are earning the same amount that you did five years ago, while our illustrious CEO's continue to line their gilded pockets, behaving as though nothing has changed.  Some have even asked employees to forgo their salary for a period of time, until they can raise more money.  If there is any truth to those rumors, those individuals should be ostracized by the industry for behaving with such arrogance.  The same way that the American political system has been hijacked by special interest, our industry continues to be hijacked by the same CEO's, that are laughing all the way to the bank.  During the third quarter of 2010 only 33 companies in the entire U.S. went public, there isn't another Apple or Microsoft ready to explode in the spine market.  Rumors of certain spine companies going public is comical.  The investment community is not infusing capital into companies that continue to design and manufacturer more of the same.  Banks and investors are more interested in exploiting the day-to-day movements of the market by focusing on trading.  If we are interested in containing the ever rising cost of healthcare, why aren't we developing products that allow us to streamline cost, while allowing us to maintain our profitability?

As for surgeons complaining about how much sales people earn, TSB doesn't feel the need to even address this issue.  If surgeons believe that we are making so much money, they should become salespeople instead of surgeons.   Between being concerned with our earnings and starting POD's, class warfare is here to stay.   Bowie sang;

Ziggy played guitar jamming good with weird and gilly
And the spiders from mars, and he played it left hand
But made it too far, became the special man, then we were Ziggy's band.
It's a new dawn, a new day!

Thursday, November 25, 2010

Thanksgiving Greetings

Fellow Bloggers,  it's been a week since we posted on the blog.  Fortunately, we are working on an interesting expose on the industry.  One aspect of this future post is that we are looking to ensure that most of what will be written is accurate.  But with that said, TSB would like to take this time to wish each and everyone one of our readers a Happy Thanksgiving.

Please take the time out to give thanks with your family and friends for the ability to break bread and don't forget about those less fortunate.  For as different as our opinions may be, hunger should not exist in the greatest country in the world.   There isn't anything better in life than great food, good libations and family and friends.

Enjoy the Day

Wednesday, November 17, 2010

Memorandum from ISASS

Tom Errico, M.D., the acting President for the International Society for the Advancement of Spine Surgery (ISASS) published a memorandum to its members regarding changes to the spine fusion insurance reimbursement policy for lumbar fusions.  ISASS has learned that effective January 1, 2011, Blue Cross/Blue Shield of North Carolina has issued a more restrictive policy effective lumbar fusion procedures.

This restrictive policy may make it more difficult for patients suffering from low back pain due to spondylolisthesis to receive their needed surgery.  The criteria includes;

  • Patients with degenerative Spondylolisthesis who don't have as much leg pain as back pain
  • Patients with Isthmic Spondylolisthesis that is not progressive but nonetheless painful
  • Patients where fusion for Spondylolysis may be necessary beneficial in situations where there is no slip and only back pain
  • Patients where fusion is the only procedure that will relieve pain and immobility associated with DDD after 6 months of exhaustive conservative measures that failed.
ISASS has reached out to all the legacy companies to enlist their lobbying efforts with BC/BS of NC.  TE welcomes your thoughts on this policy.  E-mail your thoughts to Kristy Radcliff, Executive Director @ ISASS.  kristy@isass.org.  

Question to our readers, how long are doctors going to run from filing a legal challenge to the anti-trust laws that continue to handcuff their efforts in fighting the Orwellian changes that continue to kill the delivery of healthcare in this country, and their ability to be paid for their services?  You know what TSB says, sometimes when your back is against the wall, its time to roll up your sleeves and kick some ass, the question is do the surgeons have the ability to do that?

Monday, November 15, 2010

Down For The Count, 1, 2, 3, 4, 5, 6, ......Default, Default

The dictionary defines the word default as a failure to act, an inaction or neglect.  In business, it usually mean a failure to meet one's financial obligation.  On Monday, November 15th, Paradigm BioDevices Incorporated announced that it filed a lawsuit in the U. S. Dictrict Court of Massachusetts against Viscogliosi Brothers, LLC, Viscogliosi & Company, LLC, Paradigm Spine, LLC, Centinel Spine, Incorporated, and Anthony "Tony" Viscogliosi and John "BBQ" Viscogliosi alleging successor liability, willful and tortious interference, unfair competition, malicious business practices, fraud and the default of a United Kingdom High Court order to pay monetary damages that were awarded to Paradigm BioDevices.

A major concern of anyone buying a business should be whether or not the buyer (VBrothers) would be exposed to any of the sellers (SurgiCraft's) liabilities, meaning, were the V Brothers exposed to SurgiCraft's liabilities?  Successor liabilities usually exist when there is a stock purchase instead of an asset purchase, meaning if the buyer (V Brothers) purchased a business by acquiring the common stock, in this case SurgiCraft's, or the partnership interests in a partnership, or the membership interests in an LLC, the V Brothers would step into the shoes as the owner of that entity.  So if this rule applies, the question must be asked, were the Viscogliosi Brothers aware of the contingent liabilities that SurgiCraft had?  And, did the Viscogliosi Brothers structure the purchase transaction as an asset based purchase?  The other Successor Liabilities would include; Product Line Successor Rule, Failure to Comply with Bulk Sales and liabilities pertaining to taxes.  These liabilities don't seem to apply, yet, one doesn't know unless they know all the claims in the suit.

Tortious interference occurs whenever a third party acts to intentionally and willfully interfere and break an existing contract between two parties causing damage to the relationship between the original two parties.  In this case PBD and SurgiCraft.   If the V Brothers assumed all liabilities, a U. S. Court will not only determine if they violated these allegations, but, also whether they were complicit in fostering a climate of unfair competition and fraud which usually encompasses an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsities for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damages.

Based on comments made by Mike "Punchy" O'Neill, President and CEO of Paradigm BioDevices, "All the parties involved were and are acutely aware of the financial obligations due PBD in the event of the termination of our contract due to a change of control."  The allegations claim that an elaborate scheme was cooked up by Centinel Spine, its Directors, and related interested parties to circumvent these obligations, breach the PBD contract and defraud us of our rightful compensation due PBD as ordered by a English High Court.

Seems like this bout will have more intensity than the Pacquiao - Margarito fight.  The question is, who will be on the Margarito end,  and whom will have bruises dotting their face standing for the final count?  Everyone knew this was coming, maybe its time to start selling seats.  If TSB is a betting man, I'm placing my money on O'Neill in the ring.   Bob Arum, where are you when we need a real promoter in spine?  TSB wants to know, who are readers are placing their money on?

Saturday, November 13, 2010

The Blame Game - Weekend Op-Ed

Within the last few days and weeks,  NuVasive, AlphaTec, and Trans 1, have reported quarterly earnings much to the dismay of the Street.  I guess we could give ATEC an ever so-slight reprieve for exhibiting euphoria over 2% growth. Yet, it's been a difficult year in spine, let alone the healthcare industry.   Most companies have lowered their guidance accordingly as the U.S. economy and healthcare continue to grind to a halt.  Based on the last few investor calls, it seems that the industry is revitalizing an old game called, The Blame Game.   No fellow bloggers, this isn't the game that is broadcast weekly on BBC radio hosted by Tim McGarry, nor is it the thirty minute 1999 MTV version.  Yet, as Mr. McGarry would say, "Welcome to The Blame Game, the show where there are more cheap shots than at a student union bar."  The victim is corporate America.   The culprit is?  Corporate America.  The enemy is the Big Bad Insurance Industry.  Today, spine stands at the proverbial fork in the road, and anyone that appreciates baseball would know the old Yogism, when you come to the fork in the road, take it.  So we must ask our bloggers is, whom do we blame for this temporary potentially permanent derailment?

CEO's like Dvorak, Lukianov, Randall, and Kuyper must be reading each others press clippings.  I mean imitation is the highest form or flattery, yet it breeds indifference.  The new mission statement is "our sales have been adversely affected by a higher rate of insurance denials for lumbar surgery."  These fellas must be practicing Ohm's law, whereby the current through a conductor between two points is directly proportional to the potential difference across two points and inversely proportional to the resistance between them.  Playing the blame game , or the crying game never works.  It's a proven fact that  people who blame others for their mistakes or failures usually lose face, or status, and, eventually perform worse than if they "fess up" to their failures.  For argument's sake, let's say that we are in for a rough ride over the next few years, are we going to become an industry of excuses?  If so, will this stunt our already declining ability in being creative and innovative, eventually reducing our productive risk taking?  Could it be that there is a blame virus being spread throughout the industry?  Remember the old saying you can't make Beef Wellington out of Bullshit.

The germ that these so-called leaders are spreading is protecting one's ego and more importantly one's self.  This germ may be going viral.  These difficult times will either bring out the best or the worst characteristic traits in these people.  Hopefully, the industry as a whole is learning something about itself, like how to avoid making some of the same mistakes that we have made, by putting ourselves in this position.  Complacency is sinister.  The temptation is to point your finger at someone else.  Could these individuals be showing signs of insecurity, a chink in their armor?  Truly powerful leaders are man enough, or woman enough, to state, "the buck stops here."  It's time to redirect your organizations.  But the question is, do you have the ability to think out of the box, now that you have become slaves to the Street?   That's the question that many of these leaders must answer.  Are they willing to roll the dice and force the shareholders of these companies to make short-term sacrifices to preserve their long-term viability?  Could the Blame Game create a cascading effect?

It's actually entertaining to listen to some of these power players discuss educating and working with the insurance industry.  How much more do you want to kiss the ass of an industry that rapes and pillages healthcare.  Rather than kissing the ass of the insurance industry, maybe its time to mobilize against it.  But then playing the blame game, is no different than playing the crying game, and you know what Boy George sang;

Why there are heartaches, why there are tears, and what to do to stop feeling blue when love disappears.........

So the legacy companies will re-align their guidance and eat some humble pie, while the start-ups and early-growth stage companies will downsize their sales force, cut the budgets on research and development, surgeon training and travel.  Sounds like some people are looking for survival, could be an appetite for destruction

Welcome to the jungle we got fun and games
We got everything you want
Honey we know the names
We are the people that can find whatever you may need
If you got the money honey We got your disease
In the jungle, Welcome to the jungle, watch it bring it to your knees

Friday, November 12, 2010

Don't Take Me Alive

Finally, one of our bloggers has opined about a concern that many industry professionals in spine, let alone the orthopaedic market, have been concerned about for many years.   Why do sales reps dress in operating room scrubs when they go to work?   TSB must concur with this blogger.  Never in the history of my career have I left the house in scrubs, nor, have I made a sales call in scrubs.  I mean common, WTF?  That's why they put those clean scrubs in the doctor's dressing room, dude and dudettes.  Besides, the girls don't look sexy with their pumps in scrubs.  On numerous occasions TSB has written about the untimely death of the art of selling.  Much to the readers' dismay, we have been accused of being outdated, or out of touch.  What has happened to our sense of professionalism?  TSB's granddaddy always said; "people judge you as they see you."  Unfortunately, this isn't just an indictment of the sales rep, this is an outright indictment on the lax attitude that those that run these companies promulgate.  Laissez-faire equals lazy sales people.  Cover your case, and go home.  Money, Money, Money.  Then we wonder why companies are cutting back on commissions and investors have total disdain for salespeople, and would like to cut us completely out of the picture.  But who created this culture?  The Stryker's, the Danek's, the Synthe's, the DePuy's.  TSB sees many of these make belief/wannabe surgeons standing in line at Starbucks every morning or running around the hospital.  To top it off, some of these people  do not even change when they get to their next account.  How aspectic is that technique?  Do some of you know what that word even means in the English lexicon?

The reason selling has died is because with the advent of consulting fees and under-the-table deals we no longer sell product, we buy business.   Let the first company that doesn't do this throw the first stone.  But remember what Donald Fagen once sang:

Can you hear the evil crowd, the lies and the laughter, I hear my inside, the mechanized hum of another world, where no sun is shining,  no red lights flashing, here in this darkness, I know what I've done, I know at once who I am.....  I'm a bookkeeper's son, I don't what to shoot no one,  don't take me alive.

Tuesday, November 9, 2010

A Marriage Made in Heaven

On Monday, November 8th, 2010, Synthes USA (SUSA) announced that it had acquired Anspach Incorporated, a West Palm Beach, Florida based company known for its high speed pneumatic and electric powered tools for neuro, orthopaedic, spinal and ear, nose and throat surgery.  Having visited Anspach on numerous occasions, Synthes acquired much more than state-of-the art powered tools.  Anspach corporate headquarters now provides Synthes a satellite office where cadaver labs can be offered for the Southeast, Southwest and Mid-Atlantic Regions.  But this is really only a small benefit of this acquisition.  Today, Synthes now offers one of the most comprehensive power tool portfolios with a power tool division with close to $200 million dollars in sales.

Looks like the Almighty Stryker better start looking over its shoulder, there's a new sheriff in town and his name ain't Reggie Hammond.  Is this the new Syntes (love that lisp)?  In addition, they have bought some nice shoulder instruments, considering that they have been attempting to get into the shoulder market over the last few years.  This organization has done a wonderful job of assimilating itself into the American culture of buying, rather than developing their own products, especially when it is cheaper to gobble up a leading company rather than develop it organically.   But what does it say about R&D at Syntes?  You know that new generation of engineers, love sitting in front of a computer rather than being in surgery.  Will they become the next T-Rex in the industry, gobbling up anything that's worth their cash.  You be the judge.  TSB wants to know what our readers think.

Get in On, Bang the Gong, Get it On!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Thursday, November 4, 2010

Hey Big Spender, Spend a L'il Time with Me

The minute you walked in the joint, I could see that you were a man of distinction, a real big spender

Good looking so refined, say wouldn't you like to know what's going on in my mind, so let me get right to the point, I don't pop my cork for every headhunter that I see

 Hey big spender, spend a little time with me.....

No fellow bloggers, TSB is not looking for some Sweet Charity, neither am I looking for Bob Fosse to choreograph some dance step....... TSB is writing on behalf of the many complaints that we have heard from industry professionals that are out of work, either looking for a new opportunity, or just checking out the job market.  Can we talk?  Are there any intelligent search firms or headhunters out there capable of doing their job in an organized and coherent manner.  You know, follow-up with phone calls to update the potential candidate as to the status of their interview or search?  What's wrong with you people, does TSB need to start outing some of you incompetent organizations.

How ridiculous is it when a candidate who has had multiple interviews, calls the recruiter to find out the status of their interview, and, the recruiter snaps back that they should take it incumbent upon themselves to follow up with the company.  No less, the imbecile is on the floor of NASS.  Hey dip shit, it's your job to do the leg work.  Just like the company is your client, the candidate is your meal ticket........hello!  How about this one, a fellow blogger notified us that a major search firm out of Philadelphia calls them up for one job, and then three weeks later calls them up for another job that doesn't even meet their skillset.  What's wrong with you people, didn't you vote for Proposition 19?  If you didn't, you should have because many of you people are walking around stoned.  Recently, one of our bloggers applied for a job only to be told that the hiring company was not interested in pursuing him without looking at his qualifications because he had previously worked at a company that they did not like.  WTF is that?  Don't sweat it, non of us would want to work for a dirt bag like that.

Stop with the "Linked In" BS.   That's got to be the biggest farce going around.  Just log on and read some of the non-sense that is bandied about on that platform, and you legitimize much of what we write about.  So in the spirit of debate, TSB wants to know your story, who has helped and who just plain sucks the life out of you?

The Sandbaggers? You Be the Judge

Bloggers of the spine world, during the late 70's and early 80's there was a British tele drama called the Sandbaggers.  The Sandbaggers were a highly trained group of MI6 officers trained in espionage and deception.  Well never fear, a real life sandbagging may be in the works emanating from the Garden State .  It seems that on May 12, 2010 there was a contract law suit filed on behalf of Tom Errico, M.D., against the Almighty Stryker Corporation (always say that with reverence), in the Southern District Court of NY.

The impetus for the suit lies in the minutiae of Stryker's acquisition of the Flexi/CerviCore TDR from Dr. Errico.   Like in any acquisition of this magnitude, there are always provisions and milestone's attached to remuneration paid in multiple tranches.  Word on the Street is that Stryker seems to be dragging its feet, or sandbagging with the PMA submission.  Could this be a deliberate act of deception on their part?  Could this be attributed to the disc being an albatross around Stryker's neck?  Where's Dennis Stripe and Mike (da Bulldawg) Manelli when you need them?  Haven't these parties traveled down this road before?  If I'm Errico, I need to cash out, stop dreaming up of more innovations, get on my yacht "the Stugotz" and go fishing.  Sometimes a man's got to know his limitations.   Looks like someone may be in for a haircut at Stryker.  You know what they say, "a deal is a deal, regardless."

It seems with the holiday season upon us, the gift of giving is being exacerbated by one law suit after another in our industry.  I guess at least the lawyers are making money.  TSB wants to know what you've heard on the Street, and what you've heard in the court of public opinion.

Tuesday, November 2, 2010

Are The Foxes Guarding the Henhouse?

This could be the classic story of someone entrusting the fox to guard the henhouse.  Yes fellow bloggers, many of us have learned that one should never assign a job to someone who will be in a position to exploit the job for his own end.  Name me one CEO that hasn't placed his personal portfolio before the interest of the company?  Birds of a feather flock together.  Unlike some of our bloggers who commented that listening to Alex Lukianov was painful, TSB found it insightful to say the least,  having been on previous calls where the bear would pump his chest with passion and verve, making Mel Kiper like predictions.  Yet,  unlike many of our commentators, TSB is not blowing taps for NuVasive.  Let's get serious, they are not going anywhere.  If anything the valuation of this company will align itself with the current state of the times.  Just like the real estate market, NuVasive's valuation at best was inflated.  I just find it hard to fathom that in this climate someone is going to call the note on its convertible debt.  Besides, now wouldn't be the time.

Yes fellow bloggers, the economics of healthcare has finally settled in on that beautiful and majestic coastline by the sea, LaJolla.  As painful and humbling as the call was, the bear and his team did their best to perform one of the best aztec-two steps that TSB has ever heard.   I must admit, Pat Williams is definitely a candidate for Dancing with the Stars, and one must commend the work that the Ruth Group did in prepping the purple people eaters for some crisis communication.  What a vision, Alex and Pat doing a combination of the samba, rhumba and tango on the call.  All the excuses were there.  "Unpredictable market, U.S. spine marketing bottoming out, visibility limited, volumes impacted by surgeons trying newer offerings, surgery cancellations, deceleration in procedures, push back from insurers, increase criteria for fusion surgery, etc, etc and so on."  Is there no pride amongst thieves?  As Sharon Angle would say, "man-up NuVasive."  TSB has heard of throwing the kitchen sink, but this was more like throwing the baby out with the bath water.  Is NuVasive going under?  Can we talk?  NuVasive is not going anywhere.  If anything, Alex and his band of men in purple tights may have learned a valuable lesson.   It is better to be humble, rather than exhibit bravado, especially at a time when no one truly knows what is driving this economy and healthcare landscape.  There something to be said about being low-key.

But the bigger question that must be asked is, where is Robin Young and John Englehardt with their concise analysis when these two self-anointed, and self-proclaimed industry experts have done nothing but sing the praise of NuVasive?  So in closing, NuVasive will probably finish the year at $450-$460 million, slightly off of their bold prediction of $500 million and they will probably still be here two years from now.  Just where does anyone think a $400 plus million dollar company is going?  Hopefully, there will be one less bottle of Antinori's Solaia at the table.  But you know what TSB says, you can't teach an old dog new tricks.

Monday, November 1, 2010

Black Friday

           When Black Friday comes, I'll stand down by the door
      And catch the gray men when they dive from the fourteenth floor,
             When Black Friday comes, I'll collect everything I'm owned
              And before my friends find out I'll be on the road

                                                                            Steely Dan
Yes fellow bloggers Friday, October 29th, 2010 felt a little like Black Friday for our friends the Purple
People Eaters, aka NuVasive.   TSB did not see any NuVa executives jumping out of fourteenth floor windows, primarily because there are no fourteenth floor windows at corporate.  Based on the latest earnings call NuVa’s stock dropped 28.84%, the equivalent of $10.56 per share, closing at 26.05, with an oh sooooooooooo slight rebound this morning.

In retrospect, NuVa’s full year guidance has caught up with the company, not only due to the economy, but also because of the uncertainty as to where healthcare is going.  It's funny how times have changed.  A year ago Lukianov was telling the market and investors that based on feedback from surgeons, things were not slowing up.  In April of this year,  Lukianov discussed how NuVasive’s focus was to become the most creative spine technology company in the world  vis-à-vis speed and innovation.  Unfortunately, like the rest of the market, NuVa is now learning that even with a state-of-the art educational program and facility, this downturn is bigger than the both of us.  In addition, forecasting is more art than science, and unfortunately the economic canvass is creating angst for expansion.   Guidance of $480 to $500 million may be a thing of the past.  But this doesn’t mean that they won’t come close.  Unfortunately, coming close is like coming in fifth in the trifecta, and everyone knows that when you woo the Street , sometimes it comes back to bite you, as it did NuVa on Friday.

NuVasive is no longer the only show in town when it comes to lateral access devices. Yet, the XLif still has history and tenure.  Unfortunately, squatters are proliferating a segment of the industry that was abandoned or unoccupied with the exception of NuVa.   Granted NuVasive has flexed its corporate prowess with XLif, but eventually steroids take their toll.  So how low will they go?  In all likelihood, the stock will rebound.  But will it ever rebound to the highest of highs is the $500 million dollar question?  NuVa will finish strong, just shy of their revenue objective.  But, the question must be asked, did Alex bite off more than he could chew?  Or, is he much shrewder than we even give him credit for?   TSB wants to know what our readers think?