Collapse of Innovative Spinal Technologies was Years In the Making, Sources Say; CEO Responds

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Our stories last week about the shutdown of Innovative Spinal Technologies, a Mansfield, MA, company that raised $75 million in private funding to market devices for stabilizing injured spines, prompted a number of IST’s former employees and business associates to contact Xconomy to help flesh out the details of the company’s demise more fully. A picture is now emerging of an organization hobbled by management decisions that distanced it from its founding scientists in Texas, impaired its ability to sell its products to surgeons and hospitals, and exhausted its capital too quickly before it could get traction with enough sales of its spinal devices.

In particular, several sources I interviewed blame the company’s failure on IST president and CEO Scott Schorer. He’s a 40-year-old serial entrepreneur, real estate developer, and former Army Ranger who joined IST in 2002 when it was spun off by the Texas Back Institute under the name MusculoSkeletal Research Corporation. It was Schorer who transformed the company from a research incubator into a standalone medical device manufacturer, and Schorer who single-handedly raised the company’s crucial $39 million Series B venture funding round in 2005, sources agree. But the same person ultimately “drove this plane into the ground,” says Stephen Hochschuler, a spine surgeon who co-founded the Texas Back Institute and was a member of IST’s board until 2006.

IST “would make a great Harvard Business School case study of what not to do at a startup,” Hochschuler says…

2 Comments

  1. Ouch! Career ending injury…

  2. Yeah this article is brutal. It seems that Dr. Hochschuler is out for blood. I will be very interested to hear Scott’s side of the story. I think this one’s headed for the Maury Povich show.

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