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Elegance in Spine: Extracavitary Approaches
The delicate task of dealing with spinal problems is getting a bit less complex, says Dr. Francis Shen. Orthopedists can now remove a section of rib and approach the front of the vertebrae from the back in an oblique direction.

Endotec Beats FDA, Strikes Blow for Innovation
Endotec has struck a blow for every orthopedic surgeon who wants to develop a better device. See how the company’s founders took on the FDA and got a federal judge to charge the agency with “stymieing progress and technological advancement.” How did they do it? Read on.

From Obesity to Osteoarthritis, the Carpal Tunnel Connection
It’s certainly no surprise that Carpal Tunnel Syndrome (CTS) is an exceedingly common orthopedic malady. But, as PearlDiver’s data show, the linkage between obesity, osteoarthritis and other conditions to CTS is most surprising. Check it out.

Using DNA to Predict Scoliosis
Six million people (estimate from the National Scoliosis Foundation) have scoliosis in one form or another. The primary age for onset of idiopathic scoliosis is 10-15 years old. Finally, there is a test which can reliably predict scoliosis. Fewer X-rays. Lower cost. Better outcomes.

New Capital, New Science for Cartilage Repair
$36 million invested in the last couple of months. TiGenix has more than that in the bank to fund market penetration. Then a new paper last week finds molecular cause of OA. Cartilage repair momentum is building.

Should I Become a Physician-Employee?
Large healthcare institutions are increasingly purchasing orthopedic practices. What does this mean for patient referrals? How beneficial can it be for orthopedists? The upside is more stability, among other things…and one of the downsides is loss of freedom.

Outrageous Whistleblower Lawsuit Challenged
Spine surgeons sued by whistleblowers in Boston are fighting back. Their lawyer is outraged and says the claimants are just shopping an old and settled case to another judge. Is this the proverbial lipstick on a pig? Find out.

Medical Education Under the Microscope – Is It Up to Today’s Challenges?
Where is the line drawn between what medical schools, residencies, and professors should provide to students and what doctors-in-training should reach for themselves? Here are the results of interviews with three senior surgeons, who opine on things such as attitudes, how people learn, and the possible effects on the field.

The Underlying Meaning of Zimmer’s Purchase of Abbott Spine
From the price paid to the timing, this transaction held an underlying meaning for the entire spinal implant industry. Zimmer, the $4.2 billion (revenue) diversified orthopedic company is now #5 in spine. More to come?

Resurging Lumbar and Cervical Total Disc Replacement Markets! New PearlDiver Estimates
Rumors of the TDA market’s demise were premature. Increasingly positive long term patient data is at the core of a resurging lumbar and cervical TDR market. Senior analyst Matt Menze tackles the TDA market and interviews one of the fathers of TDR, Dr. Scott Blumenthal from the Texas Back Institute. Where is this market actually heading? We think to the $2 billion range by 2015. All details here.

Six Days in June – Biomet and Zimmer Battle for Distributors in Kentucky
Documents filed recently in a Kentucky lawsuit pull the curtain back on an epic battle between Biomet and Zimmer. For six fevered days in June 2007, Biomet CEO Jeff Binder and founder Dane Miller went into the trenches to save one of their own. For all the details, read on.

Multicenter Clinical Trials: Do They Get the Respect They Deserve?
They’re not fast or sexy, but they are critical…large trials, that is. With multiple sites and principal investigators who donate their time, large trials are more complex—and normally yield more actionable data—than smaller, quicker studies. But large trials don’t always get the respect they deserve. And, says at least one physician-researcher, this could affect the future of the field.

Patent Wars: Medtronic Attacks NuVasive
MSD’s lawsuit came amid a period of declining spinal implant market share – from a peak of 60% in late 1998 (just prior to being acquired by Medtronic) to, we estimate, 36% currently – and a growing sense that MSD’s reign as the king of spine was coming to a close. What’s really behind Medtronic’s attack on its former senior exec? Read on.

No chickens need apply. That’s because with these incubators, also known as accelerators, it takes a lot of courage to see a business endeavor through. Says Mike Sherman of MB Venture Partners, “Incubating a company is a complex, but rewarding, undertaking. At times it can be a bit of a wild ride, and so it is not for the faint of heart.”

So what exactly is business incubation? Explains Sherman, “There are two incubation strategies, and one is more traditional than the other. The classic incubator in venture capital (VC) is an entity where a venture firm hires the basic leadership, who attempts to come up with a sound idea for a business. Once that happens, then more money is raised and the original staff is retained to help grow the company. In such a situation, everyone ends up with equity. The alternative is to incubate companies one at a time. There is the kernel of an idea, around which you put venture funds. You hire one or two people and give them inexpensive workspace and get rolling. This is the easier and more focused option as opposed to funding three people you hope will come up with an idea.”

For the ortho-entrepreneurs out there, Sherman recommends bringing your creativity to the table...and recognizing what else those holding the purse strings can contribute. “The way for surgeon-entrepreneurs to approach this is to identify a unique problem to be solved and perhaps a product concept, then network with financial sources and give them the opportunity to come in early. If their money goes in at the formation of the company, venture financiers become part of the founding team and are tasked with more of the early value drivers than would typically occur. They are putting in their money before the company even exists, which lets them participate in building the company, as in, ‘You need a lawyer? Here’s a lawyer. You need office space? There are an extra couple of rooms down the hall, etc.’ This value-building is a great opportunity and something normally not afforded an investor in a preferred stock offering.”

Another venture capital veteran is Mike Henson, who has founded or served as CEO and Chairman or Board Member for 16 medical device or biotechnology firms. Henson, who is General Partner at MedFocus Fund, states, “There is a reliable formula that I use to accelerate a company. It begins with a physician who has an idea. A surgeon may have a patent application or a prototype he built or had built; or there may only be a drawing on a piece of paper. If things look promising, we hire engineering talent to work with the surgeon. Most VC firms, ours included, have a preference for physicians who are emotionally, intellectually, and financially committed to a project. The firm then brings people, money, human resources, patent attorneys, and service people to the equation. Using this approach has proved successful for us. First of all, while years ago we VCs would approach the physicians, now they come to us. I am pleased to say that we have had no failures and have sold nine companies and taken seven others public. Some of these enterprises have grown to 1,000 employees and are worth a million dollars.”

Expanding on the type of physician who works well with VCs, Henson notes, “Some doctors have an idea, bring it to us, and say, ‘Here it is. You take it and run with it.’ We are not fans of this approach because we want the physician to be involved. These relationships are essentially marriages that are going to last seven to 10 years. It is preferable if the doctor goes through the highs and lows with the VC. In my experience, when a doctor is deeply involved in the business he or she will help work through some of the problems. And it is always better to start with a clinical need. We do not want to have to convince a doctor because that person will likely have no emotional investment in the product or process.”

Of the VC/physician partnership, Henson recommends, “First find someone you like because you will be spending a lot of time together going through IP issues, technology issues, and regulatory/clinical issues. The entire process will likely last from three to 10 years. In short, look for someone you’re OK getting into trouble with.”

Despite the excitement surrounding a new enterprise, the most sagacious surgeon-entrepreneurs temper these feelings with realism. Explains Dr. Henson, “Surgeons with an idea need to decide whether what they have is a company or in reality, ‘just’ a product. Many times it is just a product, but it may fit nicely into a large company’s product line. One should ask, ‘Is it revolutionary? Does it change the way doctors practice?’ If you want to form a company, but the people you work with think you have only a product, that is a problem. Surgeons should also be aware that ownership of the idea will change over time. They will not own 90% of the idea; if they own 10% of the company at the end point that is considered to be good. The pivotal thing is to enter the project with your eyes wide open. I have seen situations where a physician’s expectations are so high that a good idea has gone unfunded and undeveloped…then someone else executed the idea and took it to market. A doctor needs to find a business person whom he really trusts to tell him what the short- and long-term financial requirements are. This person would hopefully tell the physician that in the end, it is better to have 1% of something small than 100% of nothing.”

But you always want 100% of reality. Mike Henson: “Oftentimes doctors have misconceptions about how much money is required from start to finish. They may say, ‘We have $50,000. That should be enough to get this product into clinical trials.’ In reality it is closer to $8 million to $10 million. Among other things, there is expensive biomechanical and animal testing that must be done. Beware the firm or individual who tells a surgeon that $50,000 will be enough. They’re selling the surgeon-entrepreneur a bill of goods. This is why trust between surgeon and investor(s) is so important. Also, it is good to be ‘unromantic’ about the amount of time required. Twelve years ago the gestation period for a medical device company was three to five years. It is now five to eight years due to a rise in expenses, many of which surround clinical trials and the regulatory process.”

Giving an indication of how his fund works, Henson states, “Our fund, MedFocus, tends to be presented with two or three ideas a week. In cases where surgeon-entrepreneurs have unrealistic expectations, I recommend they license the product to a large company or approach another fund for assistance. We like to have two or three preliminary meetings in order to develop trust and ensure that all parties are on the same page.”

Final recommendations? Mike Henson: “The more homework that a surgeon-inventor can do, the better prepared he or she will be to undertake this complex process. While most people want to spend as little money and time as possible, you need to expend energy and funds doing research on, among other things, the patent and the size of the market. I recall one doctor who brought an idea and drawings of a device that he said was completely unique. It wasn’t that unique, however, as it took an attorney only one and a half hours to find three similar ideas on the Internet. Or, the surgeon may have a great device but only a very small market because only a few patients a year would benefit from it. If $50 million is spent on developing the product or company and the market is valued at only $1 million, that doesn’t make a lot of sense.”