Osprey Medical – The Eagle Has Fallen

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.

4 thoughts on “Osprey Medical – The Eagle Has Fallen

  1. I liked the speared eagle picture, Chris! very clever.

    (I think you should have put a nappy on Darth Vader, though, in the SVA post, which followed.)

    I live in Perth. With daylight saving now on in the eastern states, the ASX opens at 7 am for me.

    Some of me wakes up at about 6.30am. I open my eyes and reach for my Ipad and read the interesting-sounding market sensitive announcements that have come in before the market opens.

    So there I was this morning reading OSP’s announcement and my 20%-operating brain is saying

    “What? What’s CIN? What’s all this blather, blather, blather mean?”

    So I read it again, and then a third time. Still no luck.

    And then I said, “It’s all right, It’s just Osprey. The dye company. This one is on your “probably a dud” list. Move on to the next announcement.”

    I had no idea that what I was reading would have taken the Friday’s share price of 67c down to 23.5c, which is where it is a couple of hours after the announcement!

    Turns out that “CIN” was pretty important, eh?!!!

    Like

      • In fairness to you Chris, Vader’s wardrobe was always heavy on the accessories. Adding a nappy to his pants is a little like putting a new tattoo on Yelawolf … only he’d notice. And you, ’cause you put it there.

        I see the “window dressing of failure” approach as similar to the requests you get to be a positive puppy, and the utterly ridiculous fist pumping that occurs on Hot Copper (shareholders). Caught in the spin, even when the momentum is actually the heady churn of a pile of crap heading down the toilet.

        Like

      • Nah – I fixed it. I did a zoom in on Vader’s groin area and added it to the post. That should clear up any confusion – and also make it very evident that DV is a Huggies man…

        Like

Say something useful (or at least interesting)...

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s