TS03 Inc Trust Units TSTIF

RE:RE:Tso3 is Hiring

[Drrwong]

@ bossu:  Is it ever cheap to launch any healthcare product/drug in the US?  Many biotech companies spend $50mm of selling/adminstrative expenses each QUARTER when they are launching a new drug (e.g.: ACAD, ALKS).

While I understand your alarm on the added expenses, but you must understand TSO3 is trying to launch and penetrate a BRAND NEW sterilizer market within the GI space (either part of hospital or standalone surgical centers).  If you believe that the FDA/AAMI will basically give TSO3 a monopoly in that space (over time), it is something definitely worth investing in.  Personally, I want TSO3 to invest even more people, perhaps after we get more visibility on the duodenoscope claims and AAMI guideline changes next year. 

Think of it another way:  recall the Desjardin analyst's estimates of a VP4 producing >$200k of profits over its 10-year life cycle ($37k upfront + $175k consumables).  Do you think these 7 additional people collectively (for $630k like you mentioned, for example) can sell an additional 5-6 VP4s a year for TSO3??  I have already discounted back the profits back to present day, otherwise it would be only 3 VP4s...

On your point about this being a change of strategy, I would disagree for now (until more details come out):
-  Even right after the Getinge deal was initially signed two years ago, I asked RR about the distribution capabilities of Getinge in the US.  He rightfully said (even at that time) that Getinge has no presence in the ambulatory surgical space, and TSO3 will need to supplement their efforts in the GI market as that develops
-  Hence, from Day 1, TSO3 always expected to have their own people detailing the GI market.  So I don't see this as a change in strategy.  To be fair, at the time (we must remember that was BEFORE TSO3 got the multichannel scope claim), I believe RR did not appreciate how important the GI market would be.  Like I said in my older posts, I believe the GI market is much more important than the general hospital market over the next 2-3 years because of a much more favorable risk/reward set and there is much less agency friction issues in its adoption. 
-  The reason I said "until more details come out" is:  in the last conference call, RR reiterated the main focus on these people would be in the GI market.  IF however RR ended up using these people mainly as a replacement for Getinge reps in the general hospital (i.e.: general sterilization department), then it WOULD constitute a change of strategy and it will then warrant scrutiny.