Spine Nation and Fellow Musculoskeletalvites, if you"ve never been to a Flo and Eddie Concert follow the bouncing ball;
"Imagine me and you, I do, I think about you every night it"s only right to think about the girl you love and hold her tight, so happy together......I can"t keep from loving nobody but you, you"re on my mind, when the wind blows baby the skies will be blue for all my life...."
Well fellow bloggers a deal is a deal. In the world of high finance Synthes offered her honor and J&J honored her offer and the rest is history. It was announced today the J&J will acquire Synthes in a cash and stock deal, by offering $21.3 billion or $181.30 per share. Unlike the Wall Street Journal who called him Dr. Wyss, having worked with Hansjoerg Wyss it was time for the Wyssmeister to hang up the old spurs and move on out, he"s on the clock and desires to add to his legacy and life"s work. Mr. Wyss owns 47% of Synthes and will be worth an estimated $10 billion when all the papers are signed. Both companies boards have unanimously approved the transaction. Now that it"s done TSB would like to send an open letter to William Weldon at J&J.
Dear Mr. Weldon:
Congratulations on winning the Irish Sweepstakes. J&J/DePuy has a golden opportunity to continue the legacy of a great company. If you really want this transition to succeed, don"t just think about the challenges that await you in integrating two companies of this size, start thinking how you will replace the dead wood that exists on both sides of the management aisle at both trauma companies. If there ever was an opportunity for a cultural cleanse, now is the time. Not only will you be considered a player in trauma, you will have an immediate impact on spine, maxillofacial and power equipment. Many readers frowned upon the probability of this acquisition two weeks ago, today it is a reality. In addition to the aforementioned products you will have inherited the greatest marketing tool that the industry has ever seen, the AO/ASIF surgeon and ORP trainng/educational programs. Who ever said you needed a marketing department? If you don"t believe it has great value, imitation has always been the greatest form of flattery, that is why companies like MSD and NuVasive have succeeded, they realized that knowledge is power. For those that had doubt regarding this deal, any company that controls its manufacturing cost with a just in time model and carries minimal debt for a company the size of Synthes is a deal made in heaven. Once again the Great Vampire Squid prevails, you know what Bogie once said, "here"s lookin" at you sweetheart."
Based on the P/E ratio for both of these companies what"s in it for Goldman? Can someone say shorting someones stock? The Great Vampire Squid strikes again
ReplyDeleteHow will they integrate spine distributors and direct synthes employees?
ReplyDeleteThis should make for an interesting 12 months.....
@8:37 - you literally have no idea what you're talking about. What's in it for goldman? how about splitting a ~$2B advisory fee, and taking on no risk? Not to mention working the buy side of JnJ's largest ever buyout, positioning itself well for future purchases when they decide to use that $21B in cash again.
ReplyDeletelets get the comments back on topic, what happens to the distribution model of the new spine entity?
One less spine company to deal with, sweet. My glass is half full baby.
ReplyDeleteWhat will be Zimmers, Strykers and Smith & Nephews next move?
ReplyDeleteI'd imagine the happiest folks today, aside from the richest man in Switzerland are the pure play spine companies like NUVA and Globus. While this move certainly has more impact on the ortho/trauma divisions, the integration for spine reps will be a nightmare and there's likely some market share to be had.
ReplyDeletehey 9:23, don't you mean.... market share to be bought???
ReplyDeleteYa think so? Give us your rationale. Here"s the kicker, Globus and NuVasive cannot compete as a one stop shop.
ReplyDeleteYes ! Now I can get an awesome trauma job !
ReplyDeleteThe company DePuy Synthes will distribute the Trauma line, retaining the employees of Synthes and offering jobs to those DePuy Ortho reps who primarily sell trauma.
ReplyDeleteThe Synthes Spine line will be integrated in to the DePuy Spine line to eventually form one independent contractor run operation, with Synthes field based managers mixed into the horribly managed DePuy Spine operation.
Mike Mahoney is a fan of the independent distributor for a number of reasons, but also realizes that with a couple of exceptions, one of which just became a distributor, the lack of talent in the area of field sales management from the AVP on down to the ASD is in sad shape. Synthes has a few that are being eyeballed now and by contract they can not leave until first refusing a job with DePuy.
I would be really worried right now if I was working for a Depuy distributor! Depuy has wanted to get rid of the distributor model for awhile now, and this gives them the perfect opportunity to do that. I think there will be a number of spine reps from both companies looking for a job soon. Producers from both sides will stay; dead weight will be gone!
ReplyDeleteYeah! Whoopie! What a massive shift in nothing from a spine perspective. All that is had in this merger is a consolidation of 2 mediocre companies and making a Swiss billionaire richer. More will lose their jobs and incomes will be reduced.
ReplyDeleteAre DePuy distributors forced to hire Synthes reps? Or does DePuy take back distributors to direct employees?
No matter what "the JnJ" will flub the spine side of things like a charite launch.
Can't compete as a one stop shop? They're competing now. Of course, not having other divisions to offset makes them more vulnerable to shifts in the market, reimbursement, pricing, etc. but companies like nuva, globus, k2m (announced 510k for top loading screw system) are here to stay.
ReplyDeleteCurious what happens to the top spine reps, and how they r feeling today. if you're out there, let us hear from you!
This will be interesting watching the transition. I do not see J&J staying with distributor model. To much $ going to distributors for not really much work. Between the coverage of current dist. rep and synthes reps, why wouldn't J &J go direct, save margin and pass some of the reduced costs to the hospital in the form of lower prices. I had a meeting with a DS VP, he told me as much over 12 months ago. His words " Hospitals are wanting to take over the managment of spine implants. The day of glorified coverage reps making 250k and maintaining business are over! the reps that can sell to the hosptial CFO, value added by DS and maintain relationships with key surgeons will earn a great income. The reps that can not do this will made service reps making 45-60k, or be replaced."
ReplyDelete@10:05 Two mediocre companies? J&J is one of only four companies with an S&P AAA bond rating (alongside mediocre Exxon, Microsoft, and ADP). Synthes has the highest operating margin of any major medical device company (major = market cap > $5B). I know, I know....it really sucks to have access to cheap money and generate lots of cash.
ReplyDeleteOf course, if you evaluate a company's level of success through the myopic lens of a spine rep, I can see how things like layoffs and ease of integration are more important metrics than growth, economies of scale and associated earnings. I'm curious - who do you see as a good, non-mediocre medical device company?
JnJ will flub this like their Charite launch and how can you forget, their Confidence spinal cement launch
ReplyDeleteMike Mahoney said in the merger conf call that they will build a Synthes integration team and a Depuy Spine integration team and decide what is best for getting their products to market (direct sales model or distribution) Great, now I get to offer a surgeon 13 cervical plates, 2 lateral systems, 70 tlif cages..........you get the point. This will be like working for Walmart
....time to polish up the resume
10:57
ReplyDeleteThis is Spine blogging post. Remember? We are talking about spine and spine associated issues. Their spine product portfolio's are medicore....at best.
And obviously you could give two shits about the people on this site b/c you're an investor. So you can take your triple A and stuff it up your AAAsss.
@ 10:59 AM - I agree. I just walked out of a meeting that the only thing the doc wanted to talk about was the merger. He then said, DePuy & Synthes are big company's now and I don't use any of their products. When they merge I probably wont either
ReplyDeleteI'm curious if anyone on the inside in PA or MA has anything to say about the atmosphere at each HQ.
ReplyDelete11:27 Probably wont use any of their products..... probably? So there's still a chance! Awesome!!
ReplyDelete11:12
ReplyDeleteThis is a spine blog? They never tawt me that in skool. Market positions of #2 and #3 out of 250+ spine companies? They MUST have a collective mediocre bag of products. Of course, for the great men such as you, Vince Lombardi, and Iceman, there's no such thing as second place in your game. God I admire you.
I heard Ricky Bobby is going to be the new President of Depthes Implant Bonanza Company all hail baby Jesus!!!
ReplyDeleteK2M has a new game-changing top Loading screw system? Doh! 21 billion down the drain!
ReplyDeleteK2 Who?
ReplyDeleteK2M new pedicle screw game changing system. Really Clark? "Cousin Eddie"
ReplyDeleteI'm sure that a number of people in PD in West Chester are proof-reading their newly updated resumes. Synthes may have had good chops in education, engineering, etc. but they have always been full of dregs on the marketing...err "PD" side of things. Outside of surgical techniques, they don't know shit of A&P or branding. J&J is a marketing juggernaut and I can't see many of head office group keeping a job
ReplyDeleteThe cultural differences between J&J and Synthes are HUGE. American based, 'best company to work for' behemoth and a swiss-german, manage by fear introvert. This will be interesting to count the screw ups in the next 12-18 months
ReplyDeleteWill this cause Medtronic to purchase Pioneer ?!?!
ReplyDeleteYes, Medtronic needs more bad investments after the layoffs next week.
ReplyDeleteStryker Growth Strategy:
ReplyDelete1) Give a motivational speech at the NSM about a huge purchase to become the #2 player (remember?) and then say, "Nevermind".
2) Tell the sales force that they will soon have transformational technology , but the FDA flushes it and it is abandoned, causing surgeon lawsuits and millions in lost $$ (just happened).
3) Tell the sales force that Stryker Corporate is serious about Spine, and then install a 30 year-old president that, "is good with the FDA" (customer focused).
4) Produce millions of dollars is expandable cages that can't pass sterilization parameters and then must be destroyed (remember?)
5) Run off the only brilliant Product Manager they've ever had (last week).
6) Can't sell the tired old bag, so sell by attorney (just happened).
At least Stryker reps are true sales professionals who put up with managerial mediocrity and will interview better than the Johnson&Synthes reps.
Either way this integratin goes somebody's going to be riding the pain train. More interesting will be how accounts handle the merger if there is a market share or limited vendor affected by this? I doubt any hospital will honor the contract if it means they can line up a new nut crush on all of us.....
ReplyDeleteWhen is Globus going public???
ReplyDeleteHaving sold Synthes Spine before, the AO for Spine is pretty lame, so you Johnsons out there at DuhPoo shouldn't get your hopes up.
ReplyDeleteHey, does this mean Synthes finally has an MIS system? Yay!
ReplyDeleteActually no, it doesn't.
ReplyDeleteAs much as you may prefer it, DePuy is not going direct. The distributors, although changing out a few in the near future, are here to stay. The financials have been looked at many times over, trying to come up with a way to drain a few more percentage from the equation, and the only rational conclusion was to make the distribution entities a bit larger in exchange for reduced YE percent-paid commission dollars. You can expect additional charge-backs and cost shifting to the distributors, and those that fight can switch. Mahoney has a low tolerance for those who are not willing to participate in exchange for a larger overall income.
ReplyDeleteAs far as that conversation with the DePuy Spine VP a while back...not surprised he was in the dark.
2:45, Please elaborate. what was the "transformational technology" that was flushed, and who was the only "brilliant PM"?
ReplyDeleteWake up, 3:50. What are you selling, sextant? Oops, sorry about that facet damage, Doctor. And don't worry about the other incision. It usually goes unnoticed. Or are you a pathfinder man? Very cutting edge, indeed.
ReplyDeleteThe solution, as I see it, is to sell facet screws! That is unless you work for a company that also sells tampons and maxipads. That would make a diverse bag 'o tricks. I bet the office girls would LOVE those samples.
ReplyDelete4:43
ReplyDeleteSerengeti is a great system Asphole.
4:33: In case you didn't know, the FDA mafia decided that the Flexicore didn't live up to their standards, and it was shit-canned. Also, Andy Choi is the guy who forced through improvements to Xia that make up the most bad-ass'd pedicle screw system on the market called XIA3 AND he also did their XLIF has just left for some 4th tier company because Stryker is pathetic. Andy, you just gutted the Stryker PD people. Peace out!
ReplyDeleteWhat must be going through that pretty little head of KB? He must be wetting his panties right now. Can you just see him with the blinds drawn pacing back in forth in his bra and high heels, chain smoking his Capris, and wondering what company will hire his useless, closeted ass. Synthes has a ton of great reps, who will be fine. However, the days of the managers and higher ups knowing zero surgeons and taking 7 vacations a year are over. Hopefully those jokers are the first to go.
ReplyDeleteKosta, you have a true New York f'n war on your hands with the DePuy guys. Good luck and I hope you have some good insurance for your family... Fogetauboutit...
ReplyDeleteSynthes and DePuy personnel:
ReplyDeleteGet ready for the best word in the english language. Redundancy
JnJ! Winning!
ReplyDeleteGood job! All you little bitches just keep crying the blues!
Not one single surgeon that I work with is even the slightest bit impressed or intrigued by the J&J/Synthes merger. They didn't use either of you before...and they won't use you after. On the other hand, I'm sure the J&J trauma guys are tickled pink.
ReplyDelete9:46, so none of your Surgeons (8-10) at minimum use Depuy or Synthes? I find that extremely difficult to believe.
ReplyDelete@9:52pm
ReplyDeleteNope, not a one. Believe it.
9:46pm
@ 11:17
ReplyDeleteso you must work at small community hospitals that have been surgeons purchased by orthofix, nuva, globus, or seaspine, et al. good luck if you have family or friends that need care by one of those "businessmen."
DS distribution isnt going anywhere. at least not for a couple years. this will be true J&J....SSSSLLLOOOOOOOOOOOOOWW.
I love the weak little pot shots, DuPuu and all that crap. Fact is, they both have top to bottom full line products that are very good and have a proven track record.
ReplyDeleteDon't kid yourselves, this is a big move and shows JnJ is a force. Just because one doc says he's not going to use either company doesn't represent the entire surgeon demo. Give me a break.
For the record, I'm with MSD and if your not on my team or Depuy's, you are with a company that does not have a proven top to bottom systems. And your vulnerable.
Ok, let the haters hate. Cmon, slam big blue and " DuPuu".
5:16
ReplyDeleteGood luck making it through next week's layoff's! Yes you have top to bottom as you put it but your leadership is soft and you will suffer for lack of it. When is the current VP going to disappear like the last one?
6:03 makes a good point.
ReplyDeleteOk, so maybe both Depuy and MSD have the most complete products. However, MSD's corporate leadership is a revolving door of mediocre talent that makes Stryker look almost competent, well I can't go that far. Depuy's leadership, I believe, just went through a transition too but I haven't heard one way or another from the incoming group. Depuy's achilles heal is in the large disparity in the sales force. Very few are motivated and clinically sound whereas the majority are fat, dumb, and lazy. Same goes for Synthes Spine.
I got out of the big brother company 4 years ago, couldn't be happier. But I do realize that times are changing, just have to keep changing with them.
QUOTE: Depuy's achilles heal is in the large disparity in the sales force. Very few are motivated and clinically sound whereas the majority are fat, dumb, and lazy. Same goes for Synthes Spine.
ReplyDeleteI don't work for either company but how on earth can you describe the majority of sales force as all having the same personal attributes (which, of course, are derogatory?
Fat, dumb and lazy? Guess we just got to the billion dollar mark last year by pure luck... I guess it's possible.
ReplyDeleteWhen making a comment, try to forget about the beatings you've had at the hands of systems like Viper and Mountaineer. It might be worth a read instead of a laugh.
Congrats on your billion 3:27! Globus and Nuva spent that today on "consultants"....oh wait, they haven't ever grossed half of that....my bad....Viper, I'd have to give a C+ at best, but mountaineer is solid...Well done.
ReplyDeleteLightning in 5 games.
ReplyDeleteOsama is out just like Synthes management. That Westchester mansion is looking vulnerable to the J&J special forces.
anyone heard of companies in need of a solid, seasoned spine person (direct) for the Northern California area?? Thanks.
ReplyDeleteOh so similar to JnJ acquiring Depuy in '98
ReplyDeleteI heard that DePuy's EXPEDIUM PEEK Rod is to be pulled from the market on October 1, 2011.
ReplyDeleteHas anyone else heard this?