07.01.06
$2.6 Billion ($41.3B Total)
Key Executives:
David A. Jones, Chairman
Christopher B. Begley, Chief Executive Officer
Terrence C. Kearney, Chief Operating Officer
John Arnott, Sr. VP, Global Commercial Operations
Edward A. Ogunro, PhD, Sr. VP, R&D, Medical Affairs, CSO
Brian J. Smith, Sr. VP, General Counsel and Secretary
No. of Employees: 13,000
World Headquarters: Lake Forest, IL
As Hospira continues to evolve in its transition to reaching full independence from Abbott Laboratories—Hospira turned two in April—the company is on the upswing. With $2.6 billion in net sales in 2005, the company had some flat numbers compared with 2004; however, first-quarter 2006 numbers already show a rebound with a slight increase in earnings, and analysts are speculating that the company will probably see improving margins and better growth rates.
The global specialty pharmaceutical and medication delivery company views its progress with optimism as it hopes to steadily increase its pace in 2006 and beyond. Hospira CEO Christopher Begley described 2005 as a “transformative” year and added, “We continue our transformation from a position of strength,” he said. “Our success since the spin-off has been due to focus, hard work and, yes, a little luck.”
Last year, the company faced the huge task of transitioning from its separation from Abbott in 2004 while driving cultural change in-house and growing sales and revenue. To help solidify independence, Hospira built a 190,000-square-foot R&D facility in Lake Forest, IL, established three of four regional headquarters (Canada, Latin America and Europe) and created a standalone information technology infrastructure.
To improve cash flow along the way, in May 2005 Hospira sold its Salt Lake City, UT-based manufacturing facility to California-based ICU Medical, which assumed responsibility for manufacturing some of Hospira’s critical care products. Hospira also closed its Donegal, Ireland facility and plans to close facilities in Ashland, OH and Montreal sometime in 2007 and 2008, respectively. Furthermore, production will be phased out of the North Chicago facility (currently leased from Abbott) by the end of 2009, earlier than the 2014 lease expiration. Manufacturing operations at all these locations will be transferred to other Hospira facilities or outsourced to third-party suppliers.
While all these closings are occurring, some other new facilities have been added to the roster, including one in Clayton, NC and an expansion in an existing location in McPherson, KA. In all manufacturing locations, Hospira has been steadily implementing Lean manufacturing and Six Sigma programs to improve quality and productivity.
As the company invested 16% more in R&D funding in 2005—spending a total of $139 million—it helped push along items such as a wireless version of the Hospira MedNet safety software for the company’s Plum A+ general infusion pump and Plum A+ 3 (triple-channel) pump. The original MedNet system was launched in December 2003 and, by the end of the 2005, was estimated by Hospira to have penetrated as much as 25% of the available market of the Plum A+ installed base.
Part of the company’s long-term growth strategy involves acquisitions and alliances. One acquisition last year was Physiometrix, a non-invasive device developer, leading to the launch of the SEDLine brain-function monitor, which helps evaluate the effects of anesthesia and sedation.
In more recent activity, Hospira acquired LifeCare PCA, a patient controlled pain medication delivery system, in February. In keeping with its reputation as a leading manufacturer of flexible intravenous (IV) equipment, Hospira launched the VISIV flexible IV container in April and expects to introduce more products available in the VISIV container in coming years.
Another acquisition involved the generic drug foscarnet. Even though the company has a range of medical devices in its portfolio, the pharmaceutical business is a major part of its strategy moving forward. In fact, 46 products are in the pipeline, with a heavy focus on new generic injectables. Hospira provides third-party contract manufacturing for hospital injectable pharmaceutical manufacturing.
The company’s US market remains the largest revenue generator, accounting for 83% of sales. Internationally, Hospira has a presence in 18 other countries and distribution relationships in 38 countries due to the completion of an agreement with Abbott regarding transfer of international operations. Hospira agreed to purchase the net operating assets of the hospital products international business for about $300 million over two years, and thus far, the company has paid about $250 million.
The recent launch of Hospira in the Netherlands in May served as a move to broaden the company’s reach in the international marketplace. A marketing and distribution alliance was also formed with Taiyo Yakuhin, a Japanese generic pharmaceutical manufacturer.
Hospira is currently projecting a 4%-6% growth in net sales for 2006.
Key Executives:
David A. Jones, Chairman
Christopher B. Begley, Chief Executive Officer
Terrence C. Kearney, Chief Operating Officer
John Arnott, Sr. VP, Global Commercial Operations
Edward A. Ogunro, PhD, Sr. VP, R&D, Medical Affairs, CSO
Brian J. Smith, Sr. VP, General Counsel and Secretary
No. of Employees: 13,000
World Headquarters: Lake Forest, IL
As Hospira continues to evolve in its transition to reaching full independence from Abbott Laboratories—Hospira turned two in April—the company is on the upswing. With $2.6 billion in net sales in 2005, the company had some flat numbers compared with 2004; however, first-quarter 2006 numbers already show a rebound with a slight increase in earnings, and analysts are speculating that the company will probably see improving margins and better growth rates.
The global specialty pharmaceutical and medication delivery company views its progress with optimism as it hopes to steadily increase its pace in 2006 and beyond. Hospira CEO Christopher Begley described 2005 as a “transformative” year and added, “We continue our transformation from a position of strength,” he said. “Our success since the spin-off has been due to focus, hard work and, yes, a little luck.”
Last year, the company faced the huge task of transitioning from its separation from Abbott in 2004 while driving cultural change in-house and growing sales and revenue. To help solidify independence, Hospira built a 190,000-square-foot R&D facility in Lake Forest, IL, established three of four regional headquarters (Canada, Latin America and Europe) and created a standalone information technology infrastructure.
To improve cash flow along the way, in May 2005 Hospira sold its Salt Lake City, UT-based manufacturing facility to California-based ICU Medical, which assumed responsibility for manufacturing some of Hospira’s critical care products. Hospira also closed its Donegal, Ireland facility and plans to close facilities in Ashland, OH and Montreal sometime in 2007 and 2008, respectively. Furthermore, production will be phased out of the North Chicago facility (currently leased from Abbott) by the end of 2009, earlier than the 2014 lease expiration. Manufacturing operations at all these locations will be transferred to other Hospira facilities or outsourced to third-party suppliers.
While all these closings are occurring, some other new facilities have been added to the roster, including one in Clayton, NC and an expansion in an existing location in McPherson, KA. In all manufacturing locations, Hospira has been steadily implementing Lean manufacturing and Six Sigma programs to improve quality and productivity.
As the company invested 16% more in R&D funding in 2005—spending a total of $139 million—it helped push along items such as a wireless version of the Hospira MedNet safety software for the company’s Plum A+ general infusion pump and Plum A+ 3 (triple-channel) pump. The original MedNet system was launched in December 2003 and, by the end of the 2005, was estimated by Hospira to have penetrated as much as 25% of the available market of the Plum A+ installed base.
Part of the company’s long-term growth strategy involves acquisitions and alliances. One acquisition last year was Physiometrix, a non-invasive device developer, leading to the launch of the SEDLine brain-function monitor, which helps evaluate the effects of anesthesia and sedation.
In more recent activity, Hospira acquired LifeCare PCA, a patient controlled pain medication delivery system, in February. In keeping with its reputation as a leading manufacturer of flexible intravenous (IV) equipment, Hospira launched the VISIV flexible IV container in April and expects to introduce more products available in the VISIV container in coming years.
Another acquisition involved the generic drug foscarnet. Even though the company has a range of medical devices in its portfolio, the pharmaceutical business is a major part of its strategy moving forward. In fact, 46 products are in the pipeline, with a heavy focus on new generic injectables. Hospira provides third-party contract manufacturing for hospital injectable pharmaceutical manufacturing.
The company’s US market remains the largest revenue generator, accounting for 83% of sales. Internationally, Hospira has a presence in 18 other countries and distribution relationships in 38 countries due to the completion of an agreement with Abbott regarding transfer of international operations. Hospira agreed to purchase the net operating assets of the hospital products international business for about $300 million over two years, and thus far, the company has paid about $250 million.
The recent launch of Hospira in the Netherlands in May served as a move to broaden the company’s reach in the international marketplace. A marketing and distribution alliance was also formed with Taiyo Yakuhin, a Japanese generic pharmaceutical manufacturer.
Hospira is currently projecting a 4%-6% growth in net sales for 2006.