Recently, one of our bloggers posted a comment describing one of those precious moments in spine. While meeting with a California hospital purchasing manager, this particular blogger was informed that there were three distributors selling X-Spine's cervical plate with three different ASP's. If someone attempted to make this up, it wouldn't be possible. But what does it say about an organization, would that even be an appropriate word, and our industry? How many company's are building their business models on this platform, and, is this really a business model? Even Wal Mart and Target has limitations. It's a wonder why some of these company's can't get out of their own way. Does this bode well for any organization? Would anyone really be interested in doing business with, or investing in this type of company? For the record, TSB is not signaling out X-Spine, because the fact remains that many companies in our industry rely on this type of, ahem, disorganization. Historically, companies that succeed have had focus, solid technology, organizational structure, managed its capital CONSERVATIVELY, and most important, had someone at the helm that knew how to lead. And what does it say about the people the run these companies?
Rumors have been swirling that there are a few spine companies ripe for the picking. Why? Because these companies are in a financial quagmire. Five, six, seven years into their venture and they just can't increase their revenue. But why? Because many of these companies have no cohesiveness, nor continuity. It's a game of musical chairs, indicative of the many new hirees and the number of companies that they have bounced around with, not on their own accord. In this industry, ego's are larger than appendages, and many people have ears of stone. These individuals and companies will tell you otherwise. They will tell you that they are victims of a bad economy. If there ever was an industry were hundreds of millions of dollars have been flushed down the tubes, it is spine. Companies like Archus, Applied Spine, Innovative Spine, Inion, Disc Motion, Pegasus, Vertebron, Facet Solutions have squandered hundreds of millions of investors dollars. Some have been sold for pennies. Our industry is a breeding ground for those afflicted with attention deficit disorder, running in ten different directions, hoping something will stick. Keep your eyes and ears open, there are deals to be had. Could it be a Bacterin, a Phygen, a Customs Spine, a Captiva Spine, an Eminent Spine, a Spine 360 (do they even exist), and would some of these companies really be worth anything, outside of some regional or surgeon investor sales? And would those investor surgeons even continue to use the product after they were paid off?
On the financial front, Amedica/U.S. Spine is gearing up to give its best shot at taking their venture public with Creation Capital offering a pre-IPO Convertible Bond to potential investors. Upon completing $30 million which consisted of $15 million in private equity and $15 million in debt financing it looks like investors are seeking to capitalize on this opportunity. But the question must be asked, is silicon nitride really a game changer in spine? TSB is not going to elaborate on the reconstruction market, but when it comes to spine, will this material really improve the fusion rates? And when it comes down to manufacturing, how much does utilizing this material on implants increase the cost of the product? At a time when hospitals are squeezing vendors for every nickel they can get, looks like this might be a great venture to invest in. TSB wants to know what do our bloggers think?