On October 30th, 2009, TSB reported that Trans1 (TSON) was on the clock in identifying a product that would compliment the AxiaLIF and help in gaining pull thru business. Recently it was reported that TSON and Life Spine had entered into a distribution agreement. In addition, TSON has reported that in all likelihood it will fail to meet its forecasted guidance for the Street for this quarter. Strategically, this should buy TSON some time in continuing their full court press in educating surgeons and addressing their challenges with AxiaLIF.
Contrary, to what many analysts have been saying, this decision should help TSON with some contingencies. Most analysts that we speak with continue to temper their exuberance about this company, in the same way that they are not that enamored with amount of convertible debt that NuVasive carries, but that’s a different story for another day. The key to creating a successful synergy will be contingent on Life Spine’s product, the Avatar, performing better than some of their other products. Product education will be the key for the 60 plus direct sales reps that sell TSON and there will definitely be a learning curve on the intra-operative nuances of the Avatar. In all likelihood there will be a transitional period before their sales people have the ability to generate sales. Yet, there is no guarantee that those surgeons utilizing AxiaLIF will want to use or like to use the Avatar.
Contingent on the structure of this licensing/distribution agreement TSON could win or it could potentially create turmoil within their sales ranks. TSON and Life Spine, one night stand or long term love affair? TSB wants to know what our readers think?
