Friday, May 20, 2011

Farewell to Arms

How do you think we're going to get along, without you when you're gone
You took me for the $50 mil that we had and kicked us out on our own
Are you happy, are you satisfied, how long can you stand our heat
Out of the doorway the bullets rip to the sound of the beat
ba ra... ba. ba. ba.  another one bites the dust

The last decade has provided us with some precious moments in spine. There have been (some) winners, yet, many losers. The winners sell their respective technology or company, while the losers rationalize why they were never able to execute the game plan. Some will argue that it was better to have loved and lost, than to never have loved at all.  But one has to question whether there was true passion and love in some of these failures.  Monday morning quarterbacking is America's favorite past time.  Reasons for failure can be predictable.  Usually, a higher force was the impetus, we ran out of money, market dynamics, the FDA (our favorite), and reimbursement to name a few. These are just a few of the eulogies and epithets we have heard and read. What's so interesting is that never, in all the years that TSB has been in the business have we had an admission of failure,  "we mismanaged our capital (a big one), we had a poor strategy and failed to execute, we hired the wrong executive management team (commonplace), we started this venture because we thought we could flip this stat, we move too fast, too soon, we should have never bought that dawg."  Just ask some of the companies that either acquired some of these ventures (Zimmer) or have failed. The challenge in running any business is a true balancing act. Success lies in developing an equilibrium between sales and product development. Moving too fast too can be detrimental in the long run.  What we've learned over the years is that investors and management have a difficult time in pacing themselves, especially when you're running a marathon, and not a sprint.

Lack of accountability exists at epic proportions in this industry.  But then look around us, it has become acceptable to blame someone else, or some higher force when it comes to failure.  Ever think that your idea wasn't really that great of an idea?  Ever think that all you had was, wishful thinking? Maybe it was more about fantasy than reality?  So why is TSB posting on those that have been sold and those that just went cold?  On Thursday, May 19th, 2011 Premia Spine, an Israeli based company (whatever happened to Expanding Orthopedics) announced that it had acquired the assets, including 16 patents owned by Impliant.  The flagship product was known as TOPS technology.  TSB believes that the acronym TOPS stood for Typical Of Products in Spine. After $50 million and a minimum of five years in development one would think that investors would have recouped some of their capital.  TSB bets the house that this was a fire sale, pennies on the dollar.  Buying IP or someone's assets is a nice way of putting someone to rest, and at times IP is only worth the paper it is written on. TOPS had a mediocre run in the U.S. after the initial hype.  So as the consolidation continues one has to wonder who will be next?  If it wasn't for POD's, how many more companies would go under in a heartbeat?  So as Dion once sang, "Anybody here seen my old friend Robin, can you tell me where they've all gone, you hyped a lot of companies and it seems they all die young, you know I look around and their gone."

Abbott Spine (Sold)
Altiva (Sold)
Applied Spine (RIP)
Archus (RIP)
Blackstone (Sold)
Disc Dynamics (RIP)
Disc Motion (RIP)
Endius (Sold)
Facet Solutions (Sold)
Harvest Technologies (Sold)
Hydrocision (RIP)
Impliant (RIP)
Inion (RIP)
Innovative Spine (RIP)
Mekanika (RIP)
N-Spine (Sold/RIP)
Orthovita (Sold)
Scient'x (Sold)
Spinemedica (RIP)
Synthes (Sold)
Surgical Dynamics (Sold/RIP)
Theken (Sold)
Vertebron (Sold/RIP)

Consolidation Nation?  You be the judge?

53 comments:

  1. Sounds like good old fashioned Capitalism / creative destruction / economic Darwinism. That's why we're in this biz, because it's one of the last places in medical device where innovation can garner so much VC. Just because we're in a rut doesn't mean it's time to get demoralized. Go sell yourself and your stuff and you'll be fine.
    Sincerely,
    One of the Guys Who Still Loves Spine

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  2. "Some will argue that it was better to have loved and lost, than to never have loved at all"

    --ask someone who has had their heart ripped out if they agree--

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  3. How do you think I'm going to get along,
    Without you, when you're gone
    You took me for everything that I had,
    And kicked me out on my own

    Are you happy, are you satisfied
    How long can you stand the heat
    Out of the doorway the bullets rip
    To the sound of the beat

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  4. Your list is missing a lot of companies.

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  5. What about Paradigm Spine?

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  6. If zimmer didn't acquire Abbott what the hell would they have?

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  7. What about Globus? When are they going public?

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  8. Zimmer still has Dynesys....

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  9. Joe Friday asks:

    What % of implanted spinal hardware in the US is via POD's?
    Any good numbers...estimates?

    ..."just the facts mam"

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  10. PODS in the U.S. are on a run rate do approximately 500M in 2011 in a 5.0B metal market.

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  11. Trans1 is on life support.

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  12. 9:42, what's the source of that data? Thx.

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  13. Found this on my other "daily-checked" blog site:

    http://m.engadget.com/default/article.do?artUrl=http://www.engadget.com/2011/05/20/paralyzed-man-can-stand-and-walk-again-thanks-to-spinal-implant/&category=classic&altPost=alt&icid=eng_latest_art

    It seems to be a ways off before this technology will be commercially available, but it's comforting to know that there is still innovative work being done in the realm of spinal implants.

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  14. 11:02,very good knowledge of the spinal market and talking to spinal distributors in Califorina and Texas where most of the PODS have been created. The 500M is fact not fiction but nobody knows for sure. There are no reports that have been written. Would like to heard what others think.

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  15. "The 500M is fact not fiction but nobody knows for sure"

    Fucking classic!

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  16. Anyone want to bet that Seaspine is added to this list in the near future? I'm hearing Integra has the paperwork in place and pulling the trigger in the very near future.

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  17. I can't believe that people have paid to hear this dope speak:

    http://news.yahoo.com/s/yblog_theticket/20110520/pl_yblog_theticket/george-w-bush-racks-up-15-million-in-speaking-fees

    Oh,, that's right, he was at Nuvasive's NSM.

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  18. Don't be jealous, 3:05pm. I'm sure sure the POD you work for will have a big-name speaker at your next sales meeting too. Maybe the good folks over at Eminant Spine will bring you some snakes to play with too.

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  19. 3:43 It's EMINENT.

    You must be just another worthless, relationshipless, overmatched Nuvasive rep who's lost business to a POD.

    What's the matter 3:43: Pat, Keith & Alex weren't close enough w/ your top surgeon?

    Sorry I stole your business, but had you been a better rep, you might have stood a chance.

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  20. 3;43 - that is classic! I needed to laugh. Thanks

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  21. Eminent Spine- it's a put on.

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  22. What about Alphatec that allowed surgeons the privilege of buying stock pre IPO for $9/share. What recent startup company has returned good money to its investors? Everyone complains about implant prices, if the margins are so good why aren't these companies profitable?

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  23. 10:15 AM...agree that Trans1 is on life support.
    They just recently let go several reps along the east coast as well as one of the regional managers in the midwest. (St. Louis market) Pretty bloody ordeal, and the people that were let go did not see it coming. Management is looking for ways to reduce cash burn rate, so they targeted those areas that were not producing any significant volume. Just a matter of time before this boat refuses to float. Best case scenario to get rid of t-code is late 2012 or early 2013 although KR thinks they will be rid of it in January 2012 (pipe dream). Trans1 will be irrelevant by then because they most likely will run out of money. They are not attractive for purchase by other companies because they have too many liabilities associated with the technology...RIP

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  24. Should we prepare the hearse and the casket?

    So please don't ask me how
    I ended up at my wits end
    And breaking down
    Pages torn from books we never read
    Cause we plugged into this grid
    Don't pull this plug right now
    Or then we'd really have to live

    When I die will they remember not
    What I did, but what I haven't done
    It's not the end that I fear with each breath
    It;s life that scares me to death

    When you start cutting reps, its desperation time. Where are all the analysts raving about this company? Ever notice how these people are non existent when things begin going south? Monkeys and Flunkeys.

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  25. 2:09PM you have not been reading this blog very well. You can very quickly kill a thread on this blog by stating something factual and then coming back in the same thread and saying something stupid. Somebody always comes back with a four letter word in the next post and the thread is dead. PODS are dead for a while. Thanks for proving out my therory.

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  26. Lots of good reps out there. I talk to my competition and realize a lot of them are real good guys trying to make a nice living... provide for their families, while providing expertise and service to their surgeons and hospitals. There are a bunch of bad apples who pollute the field and have to resort to stroking the palms of some equally bad apple surgeons who need the extra cash to support a lavish lifestyle and inflated ego. However most surgeons are benevolent and do the right thing, and most spine reps care and try to do the right thing. Here's hoping the future allows for more of the good, and the bad get weeded out. AFTER ALL, we are all Americans, and if our armed services can put their lives on the line to protect our freedom... the least we can do is conduct ourselves with some integrity. Good night, and God Bless America...

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  27. 807, I can see the issues you're pointing out in Trans1 future. what would you say is driving the recent uptick in share price? Q1 2011 down 20% lower than 2010...

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  28. i meant 718 not 807

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  29. What's sad is the fact that Trans1 is not doing well do to factors outside of the product itself. Clinically it's a good solution for the patient and a great choice at the bottom of a long construct. Reps and surgeons that have experience with AxiaLIF know it works. Those who don't have first hand experience have no merit to bash it. In the end - the playing field is not level and that's why Trans1 will continue to flounder.

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  30. Has Hydrocision closed their doors?

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  31. 9:19 Sorry if you still work for Trans1, but two words come to mind:

    bowel perfs.

    Additionally, trying to promote it for 2 level fusions really didn't help the cause either.

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  32. Amen 9:19, but there are two factors at work. The first is best said by paraphrasing - A Few Good Men, "It doesn't matter what works, it only matters what you can prove." And the bar to proving something works is really high at the moment.

    The second factor is that "Perception is reality" and if the perception by the insurance community is that your product will increase usage or costs in any way, then you bump up against the first factor.

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  33. I'm digging the red white and blue posts! I thought most reps were self-absorbed whiners, but there are A Few Good Men out there.

    I have breakfast 300 yards away from a Medtronic rep that's trained to kill me... Because deep down inside in places that you don't talk about at happy hours, you WANT me in that OR! You NEED me in that OR! We use words like OUTCOMES, FEATURES/BENEFITS and EASE OF USE! You use them as a PUNCHLINE! YES I SPENT MORE THAN $125 FOR DINNER IN VEGAS!!! YOU'RE G.D. RIGHT I DID!!!! My existence, however repugnant to you SAVES LIVES!!

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  34. Semper Fidelis 10:21

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  35. 10:21, Sweeeeet! And so much closer to home than most will admit.

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  36. 8:09

    Are you trippin? I merely pointed out the absurdity of 12:24's post. What thread died? What theory did I prove you right on? Why are you so angry? How do you figure POD's are dead?

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  37. WHEN WILL PODS GO PUBLIC?

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  38. 4:20, the ultimate consolidation of posts. Screw JNJ/Synthes!

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  39. 9:44 the bowel perfs argument is lame. If you are trained right and know what you are doing in a case the risk is nominal. And when comparing to the complications of other procedures- I.e. vascular injury, neurological injury, ureter injuries etc. etc. etc. the trans-sacral approach is legitimate. I can understand some bio-mechanical arguments on placing a huge rod in there for some patients but for spondys to help reduce sheer it makes sense. And as mentioned before, although off label, anchoring a long construct has validity but should be studied more.

    How many bowel perfs a year do you think occur during a lateral procedure? I'm willing to bet it is very close if not more than with Trans1.

    Market dynamics might ultimately hold this company back from achieving it's summit but it is under utilized.

    What would your comment have been years ago when TLIF's were first being done?

    "Two word come to mind: Foot drop"

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  40. 6:52
    4:20 here, thank you
    Screw em all

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  41. Anybody have the details of the situation surrounding synthes suing a former rep and their new company...biomet? Seems common place in the industry for reps to jump ship and take their relationships with them but now there is a law suit with this one. What makes this different? Did the rep not sit out his/her noncompete? Did they not flip territories for the requisite time period? What's the deal?

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  42. If a rep signs a non-compete they are:

    a. lying
    b. stupid or
    c. all the above

    A sales person is sales person and they will sell whatever the end user needs to build or maintain the relationship - period.

    I'm not saying they will directly sell a product that is un-safe or bogus.

    It's all about keeping the end user (surgeon) happy.

    GO TRIBE!!!

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  43. TranS1. Heard their KOL at a state meeting. He stated a 2-5% rate of bowel perf in learning curve. a surgeon asked how long the learning curve is and he said 50 cases. the surgeons in room, no kidding, laughed out loud. Classic.

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  44. Zimmer still has Dynesis - funy!

    It's approved as a fusion device, but promoted for non-fusion. The FDA has demanded a clinical study to prove it leads to fusion. If they don't do the study it'll eventually be pulled from the market. If they do the study one of two outcomes: 1) they get fusion and can continue marketing for fusion and the product is dead or 2) they don't get fusion as per the product intent and they get pulled from the market.

    Brilliant!

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  45. Integra buys SeaSpine.

    Classic Essig, gets $50M in revs for $89M.

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  46. "Has Hydrocision closed their doors?"


    No.


    TSB: What gives with the misinformation?

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  47. No! But tell us what their revenue stream was in 2010?

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  48. So, "closed" is defined as "not on par with the hundreds of millions that other device companies rake in"?

    TSB standards:

    - unique, not me-too technology....check
    - is clinically sound....check
    - doesn't rely primarily on "bought" doctors....check

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  49. How about the VB boy's. Paradigm Spine? I will check later for a response, im going to smoke a cohiba and light up the barbecue!

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  50. So unique it still has no code - check

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  51. 7:40 Don't burn yourself

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  52. Uninformed comment regarding HydroCision. Still in operation and running strong. Just call: 888-747-4470, I'll be happy to help you.

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