Recently, one of our commentators asked if TSB would table a discussion regarding Tier 2 companies. In an attempt to understand the comment, MSM believes that this individual really meant Tier 3 companies. If one looks at the big picture, Tier 1's are comprised of Medtronic, DePuy/Synthes, Stryker, and Nuvasive. The Tier 2 are comprised of Globus Medical, K2M, AlphaWreck, Lanx No Thank, Orthofix, Biomet/EBI and Zimmer, and the last two get a nod based on their size rather than their respective portfolios. The majority of these companies have portfolios that allow them to compete on an even playing field, at least that illusion exists at Biomet and Zimmer. But who are the Tier 3 players and how do some of these companies survive considering their make-up? Which one of these players have brought innovation to the marketplace? The companies that embrace this category are Amedica (Si3Ni4), Allez Spine, LDR, SpineWave (StaXx), Integra Spine, Expanding Orthopedics, Spinal Elements, Medicrea, Pioneer, Choice Spine, X-Spine, Life Spine, Eminent Spine (Is George Thorogood the CEO?), Eden Spine, Custom Spine, aka Closet Spine, Paradigm Spine, Centinel Spine, Spine Frontier (Is William Shatner the CEO?), Trans1, Titan Spine, Wenzel Spine, SI Bone, Vertiflex, and VTI. Some of the newer entrants into this happy go lucky group is little known Zyga Technologies (what is a Zyga?) and OIC ( obviously an original acronym if their ever was one). For the obvious reason, TSB cannot include everyone. But for the vast majority of us in the industry, this scorecard makes up the vast majority of the players.
The impetus for this post comes not only from one of our readers, but it is also influenced by another commentator who attacked the readers by posting the following, "how many of you hotshots took a risk to develop an idea for a spinal fusion device or a nucleus replace devise (sic)?" Our reply would be, "how many of you can fail multiple times at the expense of the investors?" Let's be honest, how many of the Tier 3 companies were developed prior to, or at the time the market began to fold in 2008? The vast majority of these companies had an idea that if they positioned themselves properly they would be sold. Can you spell W-i-n-d-f-a-l-l? Yet, in response to our wounded CEO's comment on April 23rd, 2012, how many of the T3 companies have or had developed a product as a solution to a problem that doesn't exist? Is Silicon Nitride going to better the outcomes? Investors have pumped at least $100 million dollars into that company and TSB's guess is that they will never recoup their investment. Is a titanium alloy surface a game changer for inter body fusion? In reality, how big is the SI market, considering the hoopla and money that's recently been infused into Zyga? Don't 7.3mm cannulated screws work, considering they create compression across the SI Joint? TSB forgot, their not as sexy as a plasma sprayed fertilizer plug from Home Depot. There is some interesting technology in the Tier 3 group, but it probably comes out of one or two companies at most. As one engineer so eloquently put it, "in spine, people develop their idea first and then look for an indication." Don't shoot the messenger, just think about the message. How many different ways can the industry address fusing someone's back or alleviating pain? Innovation is important. It is what drives the human spirit. Yet, TSB has more respect for those Tier 3 companies that are purely driven by profit, no matter how they do it, rather than create the illusion that they are advancing spine technology. It's quite obvious that some of the companies that have reversed engineered products generate more revenue than those that tout their genius, and you know what, kudos to them. Years ago, we were creative. Unfortunately, as more and more companies have surfaced for the obvious reasons, we no longer innovate. We saturate. Think about it. It takes some of these T3 companies three years to bring out a new product. If a cannulated pedicle screw is all you have to offer, then fall in line. Thank the investing surgeons for being your slaves.
TSB wants to know what technologies do some of these companies have that would benefit the big boys? Who is primed for acquisition? Is anyone of these companies a contender? As hospitals create barriers for the smaller vendors, what strategy will you use to sustain your business model? Will the government step in to alleviate your angst in competing with POD's? Or are we heading to the complete destruction of the traditional business distribution model? It's here, whether you like it not.
"on the day I was born, all the nurses gathered 'round
and gazed in wide wonder, at the joy they had found
The head nurse spoke up and said, "leave this one alone"
she could tell right away that I was bad to the bone"