When I first saw the ASX disclosure this morning of Osprey Medical’s (ASX : OSP) clinical trial outcome in contrast-induced kidney injury (CIN), I wasn’t going to say anything. I figured the stock price pummeling was probably enough and I have already written my general opinion about the company in the past. But the more I pondered about the press release, the more it irritated me and I would like just make a few comments – especially in advance of the investor call this morning.
This is yet another classic ASX biomedical company failure situation – the key point of the technology has failed, yet it is dressed up as a quasi-success. This is NOT a success. To be clear, without achieving a clinical safety benefit through the use of the technology, there is no benefit to the use of the Osprey AVERT system. Although the press release makes the failed CIN outcome clear – albeit with a fair amount of window dressing – the “achieved” expanded marketing claims are not enough for this company to succeed and this message is not clear to shareholders. This is because without the CIN claim, the company isn’t going to get reimbursement and that basically means that nobody is going to buy it.
As for the “expanded” marketing claims:
1) 15% dye savings. Who cares. You can never recover the investment in the system with this claim. 15% is in the noise, truly pennies.
2) Image quality. Image quality is not better – just not detectably different. Nobody is going to pay for a system to have no detectable difference in image quality.
3) Reflux reduction is an Osprey-fabricated marketing feature. Clinicians don’t really care.
A week ago we had the FDA announcement for DyeVert. Today’s announcement basically means the whole platform is irrelevant. Packaging it up as a quasi-success just means that the company will now spin its wheels trying to sell something that nobody wants. Failure is ok – it happens. But when something fails as clearly as this, the correct decision is not “Full Commercial Launch Initiation” and you don’t attempt to turn a “turd into a bon bon” by selling shareholders on irrelevant clinical trial outcomes.