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Spinal Devices Maker NuVasive, Inc. (NUVA)'s Chickens Come Home to Roost


10/15/2012 8:43:15 AM

It’s funny how decisions you once make may come back to haunt you. That bitter medicine is what NuVasive(NASDAQ: NUVA), once an upstart in the medical world and maker of spinal products, and now a larger player, has been tasting. Last week, investors punished the stock of the San Diego company, taking away a third of its value after it announced that it was lowering its third-quarter revenue guidance by 4.5 percent. The revised outlook was caused by a number of reasons, not the least of which was customers and sales force departures for lower-priced competitors. NuVasive CEO Alex Lukianov saidthat 14 reps left in July, lured away by guaranteed paychecks of $600,000 to $1 million, according to MarketWatch. The funny thing is that NuVasive had built its own sales force a few years ago, in part, by raiding Medtronic employees, something that is well-known in the industry.Apparently, stealing employees of competitors who are attracted by higher pay is common practice. Being on the receiving end of what NuVasive itself doled out to Medtronic, what is interesting now is that both Medtronic and NuVasive have a common enemy: PODs or physician-owned distributors.

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