Monday, January 31, 2011

Stem Cell Lalapalooza - NYC Here We Come

Nothing like some free advertising for Robing Young.  March 1, 2011
commemorates the 6th annual Stem Cell Lalapalooza in NYC.   Unfortunately this venue is not Ozzfest with bands like Kataklysm, California Wildebeest, or Devil Driver, but it has been know to resemble a Motley Crue. Concert Promoter Robin Young is expecting an SRO crowd for this event and has his elves working feverishly.   The show will take place at the infamous Bridgewaters New York, in the bowels of the South Street Seaport, New York City, New York.  Why not the Hammerstein Ballroom?    Whether you are a skeptic or zealot, stem cells have taken front and center stage in the field of biologic's.    There are an endless list of applications that researchers are studying.  Baldness, blindness, traumatic brain injuries, parkinson's disease, dental applications, wound healing, bone marrow transplants, spinal cord injuries, osteoarthritis, to name a few.  For those of you that read OTW, Robin has his mom burning the midnight coal, pumping out as many press releases as she can about this industry.  Hopefully, she will not develop carpal tunnel syndrome.  Yet, as we all know, there are still many questions that need to be identified regarding the efficacy of mesenchymal stem cells. What we have learned after many years of research is that they can communicate actively and intimately.  Safety issues play a role in terms of processing, concentration, and whom are you harvesting those MSC's from. If you had your options, most of us would desire to have our own stem cells harvested, processed and delivered in real time.  I can hear the PRP people screaming, what about us!!!  Unfortunately, TSB believes that their isn't enough of revenue in harvesting a patients own stem cells considering that one is only able to charge for the processing equipment, and processing takes time.  On the other hand, allogenic stem cells, those little babies derived from a deceased donor and processed to ensure safety have become a viable alternative.  But the big question surrounding allogenic stem cells is how many of those cells are viable?  How many of those cells have survived the cleansing process?  The difference between autogenous and allogenic is that the donors need to be screened and tested for bacteria and any infectious agents that may replicate themselves within the cells of a living host.  There is always the risk of tissue mismatch or infection but in this day and age processing for infection has become a moot point.  Harvesting MSC's from bone marrow and adipose seems to be the current state of the art, and God only knows that there are plenty of fat people in the United States that could use a little lip-o-suction.  Cultured stem cells derived from living donors need certain conditions that promote self-regenerating expansion of undifferentiated progenitor into cells required for transplant.   So in closing remember, that in order to meet therapeutic requirements MSC's need to go through six stages:

Not Harm the Recipient

As each year passes, more information is disseminated as to the efficacy of MSC's, but the question must be asked, at what price?   Based on the current state of the economy, factoring in the many concerns that the healthcare industry has about escalating costs, will someone be able to deliver a product that will be cost effective?  The immediate response is to compare it to INFUSE, unfortunately, that selling technique will no longer play in Peoria, and there are other viable options in the marketplace.  So TSB wants to know are you coming or are you going?

Sunday, January 30, 2011

Who's NEXXT in Spine? 510(k) Clearances

As TSB was reviewing December's 2010's FDA Clearances of 510(k's) we stumbled upon a pedicle screw cleared for a company named NEXXT Spine.  Based in Indiana, NEXXT's tagline touts that it is "advancing the business of internal fixation.  Currently they have a cervical plate and pedicle screw.  The company is led by Andrew Elsbury, with Brian Wicker as the Head of Sales.  If anyone is interested in picking up some additional product or looking to help these guys jump into the marketplace head first give 'em a holler at 317.436.7801.  So with that here are the latest clearances;

Aesulap:  Laminoplasty Plating System (Big Market)
Carefusion: Enview
DePuy Spine: Concorde Curve System
DePuy Spine: Viper System
DePuy Spine: Expedium Spine System
Genesys Spine: Interbody Fusion System
Globus: Patriot Transcontinental M Spacers
MDT: TSRH Spinal System
MDT: Sustain Space Maintenance System
Medyssey:  Zenius Spinal System
Medyssey: Novell III Spinal Fixation/Adjustable Bridge Plate
NEXXT Spine: Inertia Pedicle Screw System
NUVA: Spherx II Mas Deformity Spinal System
Spinecraft: Apex Spine System w/CoCr Rods
Synthes Spine: Zero-P
Theken Spine: Cervical Standalone IVB Fusion Device (they're multiplying faster than a rabbit)
Zyga Technology: SImmetry SI Joint Fusion System (get it SI - SImmetry)

So here it is folks, read and weep.

Saturday, January 29, 2011

Living On The Fault Line

No one can run when it finally comes down
Nobody knows what is stirring under ground
Caruso stumbled
While the city tumbled down
The palace was in splinters
Theodore was leaving town
Livin' on the fault line.................................

No fellow bloggers,  unfortunately TSB is not singing about the San Andreas fault line, and I am not talking about the sliding boundary between the Pacific Plate and the North American Plate.  Rather than slice the state of California in two, we're talking about slicing Cardo Medical into one piece.  On January 25th, 2011 Cardo Medical Incorporated, that bastion of technology and innovation, announced that they had signed an asset purchase agreement with Arthrex to sell its joint arthroplasty division. With the sale of this division and the capital received, Cardo will continue to explore alternatives for its spine division.  Who is guiding this company,  Lewis and Clark, Henson and Peary, Abbott and Costello? The question must be asked, "what spine division?"  In the words of my sidekick Skippy Spine, WTF? If Vertebron couldn't make it with that scrap metal, what does Cardo expect to do? Inexperienced and delusional, this company is being navigated into treacherous waters and they don't hear the tsunami warning.  Times must be bad at Cardo sensing that the fault line is ready to go when you expect a "me too" vanilla cervical plate, and a pedicle screw that has had more problems than a long stint at rehab with Charlie Sheen.  The funny thing is,  Charlie will probably rehabilitate himself faster than Cardo will ever do anything with that pedicle screw, and when that happens the escort industry will experience its first recession.  But getting back to Cardo's pedicle screw, that rod reducer was nothing more than BS, and you know what they say, you can't make Beef Wellington out of BS.

So the question must be asked, Is this the next company to fall in spine?  But then has this ever been a spine company or is this another surgeon's lame attempt at calling oneself an entrepreneur and innovator?  Why would you sell your only valuable asset?  Cardo's company slogan must be, "you've gotta believe."  Hey, where's Tug McGraw when you need him?  If and when this happens, you can chalk it up to another surgeon's champagne wishes and caviar dreams .  God, it must be great to have money to piss into the wind, just watch for the recoil.  So what's going on at Cardo when you sell your Uni-system, your TKA system and your Press Fit THA System?  It's called selling your assets that have value in return for some cash because no one is interested in that dog of a pedicle screw and cervical plate.  Mark Twain once said, "the rumors of my death have been greatly exaggerated," well fellow bloggers, this time it may be real.

Pegasus Biologics (RIP)
Vertebron (RIP)
Archus (RIP)
Osteotech (Acquired)
Facet Solutions (Acquired)
US Spine (Acquired)
Inion (RIP)
Applied Spine (RIP)
Impliant ?????
Cardo Medical ?????

Yes fellow bloggers we have had a bit of consolidation in the spine , the question is who is next, which one of these one trick ponies awaits their fate? Will some of these companies be euthanized or......

Through early morning fog I see
Visions of the things to be
The pains that are withheld for me
I realize and I can see
That suicide is painless

Tuesday, January 25, 2011

Chuck E's in Love

How come he don't come and P.I.P with me
Down at the meter no more?
How come he turned off the T.V.?
And hanged the sign on the door?
Well we call and we call, "How come?' we say
Hey, what could make a boy behave this-a-way, yeah?
And he learned all of the lines, now, and every time
He's gonna s-s-s-stutter when he talks
And it's true, it's true?  He sure has acquired this kinda cool and inspired sorta jazz
when he walks
Where's his Pioneer jacket and blue jeans
If this ain't healthy, its some kinda clean

As Rickie Lee Jones once sang, Chuck E's in Love with his expatriate Pioneer buddies.  It was reported on OrthoSpineNews that Chuck Reynold's also known as "Cat o' Nine Lives" landed his dream position as VP of Sales with Spine Smith and Ceiling Technologies.  It's kind of funny that OSN only reports hirees that they place, but what can one expect from an executive search firm?  Interestingly in the preceding blog post, someone commented that the problem with spine is that there is no continuity when it comes to employment.  They marveled that five years was considered a lifetime.  Well look at Chuck.......Bristol Meyers, Synthes, Osteotech, Surgical Dynamics, Globus, Lanx, Pioneer and now Spine Smith all in a fifteen to twenty year career.    What does that tell you about management in this industry?  As for Chuck, it's game on.  He will have to leverage all those consultancies that he and his Lanx friends initiated to walk the walk and talk the talk, because if he can't pull his markers this time, he will walk the plank like most in this industry do when they can't deliver those unrealistic expectations.  As for an "innovative product portfolio" you've got to be kidding.   SS's has major gaps in its portfolio.

TSB wants to know, will Chuck E be loved, or, will he eventually walk the plank?

TransEnterix Lands Rich Mueller as CTO

On January 24th, 2011 TE announced that it had hired Rich (you don't mind if I call you Rich) Mueller as CTO.  TransEnterix is a company that specializes in the development of minimally invasive surgical devices situated in Research Triangle Park, North Carolina, also better known as the Raleigh area.

You know that famous saying, "one man's loss is another man's treasure."  Well Todd Pope, CEO of TE has landed himself someone that truly knows the business and is one of the good guys in our industry.  Rich gave five years (a lifetime) of his and his family's life to NuVasive, and as much as one has to love the San Diego area, it was time to move on.  In addition to having NuVasive on his resume, Rich spent many years working at Theken (pronounced Taken if I may add and don't you forget it) Surgical as an integral member in developing their pedicle screw system and other systems.

In addition to the aforementioned companies, Rich also worked for Volk Optical and Proctor and Gamble. Good luck in your future endeavors, Go Tarheel's Go!

Thursday, January 20, 2011

Medtronic to Host PEEK Lab

Spine Nation:

It was reported on the Street that the "Evil Empire" will be holding a lab for spine surgeons this weekend in Memphis on the use of PEEK Rods.  Looks like there will be a windfall this weekend for the Pole Dancers at Platinum Plus.   PEEK RODS?  So the first question that must be asked is, Why PEEK Rods?  And if so, are PEEK Screws that far behind?  But the bigger question that must be asked is, "will PEEK Rods improve the clinical outcomes?  TSB and one of our sources on the Street had an interesting conversation about MDT this afternoon.  What happens to a company when it becomes the market leader and no longer offers innovation and is purely marketing driven?  Do you launch TSRH 3D at the North American Spine Society Meeting and call it innovation?  Do you launch another cervical plate?  Do you launch a resorbable plate only to have it cannibalize an already cannibalized portfolio?  Has Medtronic become the Apple of the Industry?

Medtronic may be the leader in terms of market share, but with the exception of INFUSE, what has it done lately?  Hawkins never liked spine, if not for the margins.  If he had his druthers, he probably rather not play in this arena, but that's no longer his concern.  At a time that hospitals are capping pricing for lumbar fusions, how will PEEK Rods drive down the price of a procedure?   If anything, PEEK will drive up the cost.   Getting excited about PEEK Rods is like getting excited about Trans 1's Butt Bolt.  You know the product that everyone loves to hype yet questions remain about the efficacy of cleaning the disc space and the end plates so that the surgeon can achieve boney apposition.  So TSB wants to know what our bloggers think.  Are your surgeons game for Memphis?  Do they like Bar-B-Que?  Are they Blues aficionado's?  Do they like coming home with Stripper perfume?  TSB wants to know what y'all think?

Tuesday, January 18, 2011

This Weeks' Survey

Based on the many questions that TSB receives on a weekly basis via e-mail,  those of us that contribute to our blog site have decided that we will submit some of your questions to solicit your response on the current state of the art.

Today's questions:

Will Biologics ever eliminate the need for hardware?
Are Stem Cells an answer, or another step in the evolution of biologics?

And as a follow up, who has some of the best biologic platforms, and why?

As usual, thanks for your input, your voice needs to be heard.

Monday, January 17, 2011

The Season is Young, and There Already is Dissension on the Louisville 5

Less than a month ago TSB posted about the Louisville 5, a dream of a spine team.  Breaking news has surfaced that there already is dissension on the team.  Could this be a job for Rick Pitino,  or is this better suited for John Calipari based on his reputation for dealing with squeaky clean programs.  It seems like one of the teammates is crying foul, while two other teammates are contending its their ball and their not sharing it with anyone.

On January 17th, 2011, it was reported in the Courier-Journal that some members of the Louisville 5 Dream Team were embroiled in a battle over $60 million in future royalty payments from the Evil Empire, aka, Medtronic.  Dr. John R. Johnson, you could call me ray, you can call me jay, but don't call me Johnnie, co-director of the Norton Leatherman Spine Center says in a lawsuit that two other surgeons have reneged on a decade old pact to equally split Medtronic royalty payments for helping develop spinal implants.

Dr. Steven Glassman and John R. Dimar, II, who also play and practice at the Center signed their own deal with Medtronic in 2006 and have every intention of keeping their royalties all to themselves.  Dr. Johnson on the other hand claims that their actions violate a 2001 agreement that would allow five surgeons to equally share rights in their inventions for Medtronic.  The breach of contract suit pertains to Drs. Glassman's and Dimar's work on the Solera System.  Medtronic should have called it the Solar System and marketed it as being out of this world.  So why is Dr. Johnson suing?  Because the potential estimated payout could be for $60 million in royalties over the next five to six years.  Dr. Puno and Dr. Campbell better known as bench warmers in the suit, have taken opposing sides against their teammates.  Dr. Puno sides with Dr. Johnson, while Dr. Campbell has sides with Glassman's and Dimar's position.

In addition to the claims made by Dr. Johnson, it seems that loyalty is not highly regarded when it comes down to the Benjamins.  Dr. Johnson's attorney was quoted as saying that after training in France 30 years ago with Cotrel-Dubousset, Dr. Johnson brought in Glassman and Dimar's into the practice to continue the development of these products for the benefit of patients.  If so, what does this have to do with Solera if that was a separate deal?

The interesting aspect of the suit is that both parties have petitioned the court to keep their business and financial information a secret from the public domain.  Seems like there is some inbred fighting going on.  Maybe "da boyz" can go down to Jack Fry's and settle this over a plate of Poulet Rouge Fermier and some excellent aged Knob Creek of Makers Mark 46 Kentucky Bourbon, because by time the attorneys get through with both parties they'll be eating at the Hard Rock instead.  TSB wants to know what's in the water down in L'ville?

Sunday, January 16, 2011

Sunday Op-Ed Piece

The opinions that many of you conveyed over the last week in response to our Spine Survey was overwhelming.  Your commentary exemplifies that this industry has been taken hostage by a lingering disease that has affected America's psyche.  If last weekend's shooting in Arizona is not a wake up call, then what is?  Whether you believe it or not, this "us against them" rhetoric will slowly bring this country to its knees, and, it will bring this industry to its knees.  POD's will become 2011's lightning rod. TSB is not Robin Young pandering to some surgeon, tossing"softball questions" (would we expect otherwise) regarding this business model.   Sales people are not the reason that the cost of delivering healthcare in the U.S. has become a runaway train.  It takes more than one spoke to turn a wheel.

There is a fundamental balance to life, some call it Karma.  Living life is and always will be your teacher.  You either find it, or, go through most of your life sleep walking until some untimely event abruptly awakens you from your sleep.   The anger, frustration, and cynicism that many of you expressed is justifiable.  In addition to these emotions and distrust, as America continues to become a shameless society, you break down the value system, the same way that the sanctity of the nuclear family has been destroyed.  As intelligent of a society that we claim to be, our tendency is to do things the hard way.  The lack of accountability and greed on the part of corporations and physicians is at an all time high.  If you were ever in the military, you understand that the grunt's do the dirty work, they do not make the rules.  The reason regulations exist is because it keeps order and discipline. For many years, spine had been given a pass by the insurance industry.  Pain took precedence over denials.  Will the industry have the ability to change, or,  will it continue to do things as it has, expecting different results?  Will we self-immolate?   We cannot hide behind the mantra that, " it's always someone else's fault. " Those in leadership positions fail to understand what real leaders do.  Many of them resemble the same old tired generals that make up the Pentagon, adhering to the same old principles and culture that has existed over the last ten years.  Our leaders are too conventional.

The increasing emergence of POD's on a national level will drive a wedge between sales people and surgeons, and between companies and surgeons.  POD's are a growing trend for early-growth stage companies for the obvious reasons.  Entry into this market is cheap and they are using every creative resource legally available to them.  They are out to undermine the legacy companies way of doing business.  They argue that this is not an anti-competitive model, that it will not affect the quality of care that physicians deliver, and that over utilization will never exist,  like over utilization has never existed in our industry.  Barring any regulation or oversight, this model poses many legal questions that need to be addressed, regardless what Dr. Steinmann thinks.  The reality is that many surgeons do not have a healthy detachment from their bank accounts and rightfully so.  Their financial excess and success defines whom they believe they are. Their sense of self-worth is morbidly wrapped up in how much money they make, and believe they deserve it.  This is not a generalization, this is part of being the entitlement generation and society.   Entitlement is not limited to class.  It is not a rich or a poor thing, it is part of man's nature.  Surgeons don't see themselves as a component of healthcare, they believe that they are the engine that drives it.  Unfortunately, their best friend the insurance industry has become an evil gatekeeper.  Their gravitas is like a cheap cologne.  So, why are surgeons and certain companies hiding behind this model?  The answer is simple.  Greed breeds contempt.  When you commoditize the market, POD's are an incentive to broker products based on rebates or is that really "kickbacks" in comparison to selling on features and benefits.  Have you ever met a company that leads their discussion by saying to a surgeon,  "how would they like to be involved in a business model that saves the hospital money?"  At least to TSB's experience, that has usually evoked a hearty laugh.  It usually starts out like this, "how would you like to be involved in a business model that increases your personal profitability?"  If decision's are based on quality and comfort, why are some surgeons switching to products that are not improving outcomes, and are not a technological improvement?  Simply put, it's all about the Benjamin's.  If many of these surgeons were not making a profit on this model, how many of these products would even be given the time of day?  This  model is no different than having  a surgeon invest capital into a start-up company with the objective of cashing out in the future.  The difference being, the future becomes now.  

How absurd is it that a surgeon would believe that a sales person has no value, and, that the reason the cost of healthcare is escalating is because of the money that salespeople earn?  Cut out the middleman and there are more profits.  You can thank the outside investors, private equity and investment banks because this model has been promulgated by them for last few years.  Whom do you think some of our biggest adversaries are?   The basic attitude is they should make all the money, while you peons should pick up the scraps.  That is why America is burning rather than raising itself from the ashes.  This is a baseless rationalization on the part of individuals that claim their superiority because of the profession they chose, or the money they have.  Yet with all the bitching by surgeons, has anyone ever met a surgeon who left their profession to become a sales rep.  Because I know of a few sales people that left their careers to become physicians.  How many surgeons do you know that exerted their influence with many a company so that their children, girlfriends, or relatives are employed in medical device sales?  I have met a few surgeons that left to become partners or employees in a private equity firm or an investment bank, only to have mediocre careers at best. But then again, maybe those individuals were mediocre at their craft.  Our industry is no different than the Street, it lacks adequate disciplines and safeguards.  The commentary that eliminating sales people will improve and drive down the cost of healthcare in the U.S., is reckless at its best.

2011 will be an interesting year.  Based on the investigations that are currently taking place into potential fraud and stock manipulation in spine, it will be interesting to see what comes to fruition.  Will the government have the chutzpah to throw some surgeons and corporate executives into orange jump suits remains to be seen.  Many of you have shared the commitment you make on a daily basis and take great pride in the clinical knowledge and service that you provide your customers.  Unfortunately, sales is no longer selling.   About fifteen years ago,  some legacy companies established a precedent whereas they no longer employed sales professionals, instead opting for cover boys and girls.  Ever hear of the Gallup Poll?   Those companies were out raiding distributorships by offering them money in exchange for their customers and volume, ergo, the onset of non-competes.  Do POD's sound any different?  What next?  Are hospital administrator's out of the question?    Just like there are professional sales people that love their craft, there are great surgeons that laugh and shake their heads in amazement when they hear of some of the distractions that their peers are preoccupied with.  As one of my surgeon friends said, "the majority of my peers are terrible businessmen, have terrible social skills, and are condescending to their patients."  Everyone wants to be like the highly esteemed Professor who has taught his pupils well on the craft of medicine and the art of making the deal.

Authorities have expressed concern about POD's.  Compliance issues appear to be raised with regards to these arrangements between the POD's and the hospitals.  If anything, hospitals should approach these business models with caution.  When the surgeon becomes the purchasing agent does this become an opportunity for the POD to profit from their referral to the hospital by generating a fee for service and a profit on the product they use?  This in itself can constitute prohibited remuneration under the Anti-Kickback Law.  In closing, a wise old man once said, "the only thing that history teaches us, is that history doesn't teach us anything."  Once again thanks for your commentary, and have a great weekend.

Thursday, January 13, 2011

Globus Acquires Facet Solutions Assets

On January 12, 2011 Globus Medical the LARGEST privately held spinal implant company announced that it had acquired all of the assets of Facet Solutions based in Hopkinton, Massachusetts.  Facet Solutions was another in the long line of "one trick pony" companies in the spine industry.  Globus now inherits via its acquisition another pedicle screw based facet replacement system.  In addition to the ACADIA System, Globus also acquired the intellectual property that once belonged to Archus.  Who knows, this may be the year that THE BIG G attempts to go public?  Based on their portfolio and the current state of healthcare do our bloggers believe that they will succeed or will they continue to be the LARGEST privately held company in the universe?

Thursday, January 6, 2011

Spine Survey

Since TSB considers this the People's Blog Site, we thought that it would be interesting to get your take, rather than some analysts, as to whom will be the industry winners this year, and who will join the losing ranks?  Is there any emerging hardware or software that will truly make a difference?  Does anyone  believe an IPO will be underwritten, or, will we go through another year of hearing non-sensical commentary about who is or isn't going public.  Will Stem Cells become the New New Thing, or is it a lot of hype, as usual?  Our bloggers want to know what you think?

Monday, January 3, 2011

Is It Professor Umbridge or Is It Professor Umbrage

The recent expose' by Bloomberg and WSJ have become a lightening rod for our industry.  It seems that these articles have been construed as a personal attack on the spine industry, and has raised the personal ire of whom else, but the Professor Umbridge of the spine world, Robin Young.  It seems like Professor Umbridge has thrown down the gauntlet and has been named as the teacher for defense against the dark arts at Hogwarts.  But the question must be asked, who is the Minister of Magic Fudge?

Could the Minister of Magic Fudge be Medtronic?  Highly unlikely.  Could Professor Umbridge have an ulterior motive in his attack on Bloomberg, and our beloved Wall Street Journal?  Potentially.  In all likelihood he is just attempting to protect his own vested interests so that the questionable and at time unethical practice by companies within our industry remains status quo.   Just out of curiosity, the public would love to know what type of IP or consultancies are these surgeons getting paid for?  How many surgeons does it take to design a cervical plate?   How many surgeons does it take to design an ALIF, TLIF, XLIF, PLIF?  Professor Umbridge should know the answer from his many affiliations with "You-Know-Who."  I leave it up to our bloggers to fill in the blank for the Lord Voldemort's of the industry.   If MSD has nothing to hide, now is the time to step up from behind AdvaMed's skirt and let the public know what they are paying royalties and consulting agreements for.  Could it be IP that was purchased and has never been used?

So TSB will ask our bloggers the $1.85 million dollar question,  if all things are equal, how do you make a sales call on a surgeon that is being paid by a competing company?  How many of you would manage your time efficiently if you knew in advance whom to call on, or whom not to waste your time with?

We know what the truth is.  The truth is there are many surgeons that are in it for the money, just like there are those that love their craft.  There are companies that attempt to play within the rules, and there are those that have mastered the art of breaking the rules, and influence a surgeon's choice of implants by waving money as an incentive in using their products.  So in closing, it isn't a surprise that Professor Umbrage came out of Hogwarts to express his views.  You know what they say, once a suck up, always a suck up.