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  "documentTitle": "Penumbra, Inc. (PEN)",
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  "authorName": "Spruce Point Capital Management",
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  "presentationDate": "2019-07-31 00:00:00",
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  "notes": "The slide uses a series of testimonials from neurosurgeons to undermine the 'bull case' that Penumbra's market share is secure.",
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      "text": "If Penumbra's market share has until now been protected by only the FDA's relatively weak 510(k) approval process, investors should not be confident that it can maintain its share or price levels now that competitors have finally entered the market \"on-label.\"",
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      "text": "Some Penumbra bulls see the “off-label” phenomenon as a positive for the stock: whereas the Company’s “headline” market share of the neurovascular aspiration catheter space is thought to be ~90%, its “effective” market share could really be ~70% due to the use of off-label catheters not captured in market data, thus inflating the apparent downside to existing share levels. Spruce Point, however, believes that rampant “off-label” catheter use is clear evidence that Penumbra’s neurovascular aspiration catheter is a commodity product at high risk to substitutes and competitive threats: these devices are so basic that catheters designed for other purposes could be used in their place, and we have evidence of doctors preferring even these non-dedicated catheters over Penumbra’s aspiration thrombectomy-specific catheters.",
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      "text": "If Penumbra’s market share has until now been protected by only the FDA’s relatively weak 501(k) approval process... investors should not be confident that it can maintain its share or price levels now that competitors have finally entered the market “on-label.”",
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      "text": "If some doctors have such a strong preference for non-Penumbra catheters... we would expect the recent FDA approvals of a swath of competitors to serve as a catalyst for significant migration among doctors who might have wanted to switch, but who felt pressured to adhere to FDA regulations.",
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      "kind": "quote",
      "text": "“They are a commodity product. We basically just decided in our [RFP] process - if you step back and think about what they’re offering, they’re just plastic tubes, right? How hard is it to make plastic tubes?” - Neurosurgeon",
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      "kind": "quote",
      "text": "“I am a 70% Sofia, probably 15% Medtronic React 71 and 15% Penumbra... We switched to Sofia before there was an indication for mechanical thrombectomy.” - Neurosurgeon",
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      "kind": "quote",
      "text": "“[Medtronic’s] intermediate catheter - it is the aspiration catheter.” - Neurosurgeon",
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      "kind": "quote",
      "text": "“The FDA label matters more to less-sophisticated doctors, like radiologists. People like me do whatever I think is best.” - Neurosurgeon",
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      "text": "“Penumbra went around to and made a very big deal about physicians using Medtronic, Terumo and Stryker aspiration catheters that previously did not have the stroke label... This also swayed some doctors to use Penumbra.” - Neurovascular Products Sales Director",
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      "text": "\"[Medtronic's] intermediate catheter - it is the aspiration catheter.\" — Neurosurgeon; \"The FDA label matters more to less-sophisticated doctors, like radiologists. People like me do whatever I think is best.\" — Neurosurgeon; \"They are a commodity product. We basically just decided in our [RFP] process - if you step back and think about what they're offering, they're just plastic tubes, right? How hard is it to make plastic tubes?\" — Neurosurgeon; \"Penumbra went around to and made a very big deal about physicians using Medtronic, Terumo and Stryker aspiration catheters that previously did not have the stroke label indication. They freaked out a lot of doctors. This annoyed the doctors a lot because [the Penumbra salesman] should not be telling the doctors how they should be treating their patients. This also swayed some doctors to use Penumbra.\" — Neurovascular Products Sales Director",
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      "kind": "title",
      "text": "Off-Label Catheter Usage Suggests Doctor Readiness To Adopt Competitors",
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