The Blame Game

OTW's Walter Eisner was able to land an interview with Dave Stassen founding manager of Split Rock Partners regarding the recent demise of Disc Dynamics. Stassen acknowledged that this was the third or fourth company in SRP's portfolio that had to cease operations because of their inability to get through the FDA. He is quoted as saying, "investors have dropped $300-$400 million" down the hole because of the FDA. Hmmmm? Sounds like sour grapes. Why?

Regardless of their size, one has to wonder who was doing the due diligence on behalf of SRP when they invested in this technology? The one thing we have learned is that just because you have made millions doesn't mean that you can beat the house. Hopefully, the VC's have learned that their lesson. VC's are very interesting people. When one looks at their backgrounds they are brilliant people holding law degrees and MBA's from pedigree schools, unfortunately, having a blue blood education is not a prelude to understanding emerging technologies and the potential challenges in bringing them to the market. I am sure SRP has made some wonderful investments, but the question must be asked, "what were they thinking when they invested in DD? A colleague of TSB's informed us that when they originally saw Steve Healy present at an investors meeting in 2006 or 2007, the skeptic light bulb immediately went off in their head about this product. I know, many of our readers will question our monday morning quarterbacking motivations, yet, hope springs eternal for many investors

Is it really a travesty that American patients won't get access to this technology? As one of our commentators stated, "could it have been that the FDA was concerned with the potential carcinogenic effect of this polymer? Mr. Stassen forgets that regardless of his financial interest, the FDA's responsibility is to regulate the safety and efficacy of medical devices. It is also of interest that Stassen claims that patients in other parts of the world "are getting outstanding results." Have any of our readers wondered why there has been an exodus of clinical trials to foreign countries where regulatory and medical guidelines are lax and patients become real-life guinea pigs. Many of our clinical meetings have become circus acts with surgeons providing the audience with pictures at an exhibition. Sometimes it reminds you of a foreign film festival

It's noble of Stassen to acknowledge that DD shares "some" of the responsibility. The only saving grace that has come out of this exercise is that there will be no bankruptcy proceedings Mr. Stassen forgot that "those who fail to plan, plan to fail." It's always easier to blame someone else than look at yourself in the mirror and just admit, it was a bad investment to begin with. TSB wants to know what our readers think?