Terumo Medical

$2.3 Billion

KEY EXECUTIVES:

Takashi Wachi, Chairman
Akira Takahashi, President
Takahiro Kugo, Sr. Managing Executive Officer
Hachiro Hara, Sr. Managing Executive Officer

NO. OF EMPLOYEES:

12,000
       

GLOBAL HEADQUARTERS:

Tokyo, Japan

Part of Tokyo, Japan-based Terumo Corp.’s plan for success is to tackle the global healthcare market full force, and it seems to be succeeding.

For fiscal 2007 (ended March 31), the cardiovascular and interventional technology company reported that operations in the United States, in particular, proved to be a significant source of growth, with overall sales climbing more than 30%. Terumo’s has a significant network in the United States. Its US base is in Somerset, NJ, and the Terumo Heart group is located in Ann Arbor, MI (among other subsidiaries located in the United States).

Terumo attributes its recent expansion to a new direct sales structure for its interventional systems and the 2006 acquisition of MicroVention Inc., a California-based manufacturer and marketer of coils for the treatment of cerebral aneurysms. In Europe and Asia, sales also showed double-digit percentage growth, with cardiac and vascular products leading the way, thanks also to the positive effects of a weak yen. Total overseas sales climbed 26.9% compared with the previous fiscal year and accounted for 44.8% of net sales, up 5.3 percentage points.

In April this year, the company unveiled a new three-year business plan called “Phoenix 2010: Challenge for Dramatic Leap.” The goal is to create “a Terumo with global presence,” according to a company statement. Management has initiated ambitious financial targets to achieve 400 billion yen (approximately $4 billion using the company’s end of fiscal 2008 conversion of yen to dollars) in sales and 85 billion yen (approximately $850 million) in operating income by the fiscal year ending March 2011 and to grow to 500 billion yen (approximately $5 billion) in net sales within five years.

According to the company’s management, another critical variable in Terumo’s equation to gain market share will be a slight shift in corporate philosophy. As part of a more in-depth product development and research initiative, the company plans to maximize contact with various stakeholders throughout the healthcare value chain, including patients, nurses, pharmacologists and clinical engineers, according to President Akira Takahashi.

“By doing so, Terumo will be better positioned to extract the true needs of the medical field and glean accurate opinions about healthcare and medical devices,” he wrote in Terumo’s 2007 annual report. “The company will also work to enhance its medical offerings, such as Terumo product usage training for medical staff and solutions for improving hospital management practices and routines.”

For fiscal 2007, the company reported a sales increase of 19% to $2.34 billion. Net income also rose by double digits—14.7%—to $315 million. General hospital products—disposable medical equipment, medical electronic products, blood transfusion products—made up 50% of total sales ($1.2 billion, 6.4% growth). Interventional systems (catheters and stents), cardiovascular systems (heart and lung machines) and vascular grafts comprised 9.6% of sales ($927 million, 23.1% increase). The Home Health division—diabetes care products, dialysis systems—contributed 10.4% to total 2007 revenue ($243 million, 1.9% increase).

For fiscal 2008 (ended March 31), net sales increased 10.8% to $3.1 billion. Net income bested 2007, with a 16.5% increase to $437 million. Sales for the company’s General Hospital division grew 9.2% to produce $1.5 billion. Compared with 2007, the Home Health unit reported a significant increase of 6.5%, reaching $309 million. Catheter and cardiovascular systems, making up Terumo’s Interventional group, totaled $1.3 billion, an increase of 13.9%.

Part of the Interventional group’s continued solid performance in 2008 was the result of Terumo receiving CE Mark approval in Europe for its Nobori drug-eluting stent. The company got the European regulatory nod in January. As part of plans to establish long-term safety and efficacy, the company plans to enroll more than 5,000 patients in randomized trials as part of a post-marketing registry in Europe, Asia, New Zealand and Africa.

In addition, in June, Terumo Heart, Inc. received approval from the institutional review board at the University of Michigan to move forward with the DuraHeart Left Ventricular Assist System (LVAS) US pivotal trial for a bridge-to-transplant indication. The trial is a multi-center, prospective, non-randomized study of 140 patients and will include up to 40 centers. The DuraHeart LVAS is a third-generation circulatory support device intended to provide cardiac support for patients who are at risk of death due to end-stage left ventricular failure. It currently is CE marked in Europe for other indications and is not available for sale in the United States.