ConvaTec Strengthens Foothold in Emerging Markets with Boston Medical Device Purchase

ConvaTec Strengthens Foothold in Emerging Marketswith Boston Medical Device Purchase

ConvaTec Inc. is headed south of the border. The Skillman, N.J.-based manufacturer of ostomy, wound and skin care products has acquired Boston Medical Device Inc. (BMD), itsdistributor in Latin America. Terms of the deal were not disclosed.

“Emerging markets, particularly Latin America, are an increasingly important growth component for ConvaTec,” said Nino Pionati, President, ConvaTec Intercontinental. “Today’s announcement is a reflection of that strategic priority as well as recognition of the market leadership that BMD has achieved and maintained in this region over the years.”

Espicom Business Intelligence, a United Kingdom-based business intelligence service provider, estimates the overall device market in Latin America to be worth about $10.5 billion. The seven markets thatcomprise the Latin American region(Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela) encompass 485 million people and will finish the year with a gross domestic product of $5.2 trillion.

Most countries in the Latin American market currently are re-evaluating their healthcare sectors. Service levels among private healthcare participants are among the best in the industry, but countries remain challenged in providing basic healthcare to population masses. Opportunities certainly exist for manufacturers of medical devices and supplies, but companies must know exactly where those opportunities are and ways in which they can be developed, Espicom claims.

Of the seven Latin American markets, Brazil easily is the largest, followed by Mexico, Colombia and Venezuela. Brazil’s medical device market is valued at $4.03 billion, with healthcare spending highest in urban areas. The private sector has experienced rapid growth, and imports have increased at a compound annual growth rate of 21 percent between 2005 and 2009, according to Espicom data.

Mexico’s device industry is worth an estimated $3.5 billion, though the market is dominated mostly by products imported from the United States. In Colombia, the medical equipment and supplies sector is valued at $863.9 million; Espicom researchers expect the market to grow by a more robust rate of 4.5 percent this year after stagnating in 2009 due to local budget cuts and inflation. Colombia’s healthcare structure in the larger urban areas is adequate but in need of modernization.

Venezuela has the second-highest medical market per-capita expenditure in Latin America, according to Espicom. While the country is rich in natural resources, its device market is volatile and its overall economy is heavily dependent on both oil and imported products. As a result, few medical products are manufactured in Venezuela, forcing most health facilities to rely on outdated equipment and infrastructure. The country’s medical equipment and supplies sector is worth about $595.3 million, Espicom data show.

ConvaTec reported net sales losses in the Latin American market during the second quarter of 2011, but executives attributed the deficits to supply chain enhancements the company reached with its local distributor and the management of inventory levels to “best maximize efficiencies” in serving the market. Those supply chain enhancements and inventory level managements resulted in fewer product shipments to ConvaTec’s Latin American distributorduring the first six months of the year.

The Boston Medical Device merger is not expected to impact ConvaTec’s current orders or delivery schedules, companyexecutives said.

ConvaTec finalized the Boston Medical Device acquisition shortly after rumors began circulating that it had propositioned Kinetic Concepts Inc. with a $6.3 billion offer. The San Antonio, Texas-based manufacturer of wound care, tissue regeneration and therapeutic support system products instead was purchased by Apax Partners LLP, a private equity/venture capital firm headquartered in London, England.

Maquet’s New Balloon Catheter Approved in U.S., Europe

Talk about timing. Maquet Cardiovascular has received both 510(k) clearance from the U.S. Food and Drug Administration and CE mark approval from the British Standards Institution for a new intra-aortic balloon catheter that combines fiber optic signal acquisition with hemodynamic support.

The company claims its Sensation Plus 50cc 8 Fr. intra-aortic catheter provides 25 percent more blood volume displacement than standard 40cc intra-aortic balloon (IAB) devices, allowing for better unloading and augmentation. The Sensation Plus is equipped with two stabilization devices that allow the catheter to be secured to a patient’s leg without sutures, according to the Mahwah, N.J.-based subsidiary of the Getinge Group (headquartered in Sweden).

“Clinicians have been asking for an IAB that combines all of the benefits of fiber optic technology, faster initiation of therapy, easier patient management and a crisp, clean arterial pressure wave form with increased hemodynamic support,” said Deb Joseph, vice president, marketing and clinical services. “We believe the new Sensation Plus intra-aortic balloon catheter meets these needs and will enable clinicians to provide patients with improved care.”

IAB counterpulsation is an adjunctive therapy that often is used in patients with left ventricular failure and other cardiac conditions. When the IAB inserted into the patient’s aorta counterpulses with the heart, it augments coronary blood flow to increase myocardial oxygen supply anddecrease myocardial oxygen demand.

Maquet develops and designs products and therapeutic applications for the operating room (OR), hybrid OR/catheter laboratory, intensive care unit and patient transport within acute care hospitals.

Medrad Acquires Pathway Medical Technologies

Medrad Inc., an affiliate of Bayer HealthCare, has acquired Pathway Medical Technologies Inc. of Kirkland, Wash. Financial terms of the agreement were not disclosed.

Medrad executives expect the acquisition to expand the company’s presence in the vascular intervention technologies sector and strengthen its interventional business as a whole. Medrad is an affiliate of Bayer Healthcare, which in itself, is a subsidiary of global healthcare, nutrition and high-tech conglomerate Bayer AG.

The combination of Pathway and Medrad’s technologies likely will create a suite of products designed to assess vascular disease, restore blood flow and confirm treatment efficacy, Medrad bigwigs claim.

“The combination of Medrad and Pathway Medical Technologies underscores our strategic commitment to the treatment of patients in the growing interventional field,” said Jorg Reinhardt, M.D., chairman of Bayer Healthcare’s management board. “Pathway’s products complement Medrad Interventional’s current and future portfolio, including our injectors, thrombectomy devices and the Cotavance paclitaxel coated balloon catheter with Paccocath technology. [This] will enable us to extend value to customers and patients through broader product options to diagnose and treat PAD (Peripheral Arterial Disease).”

Pathway Medical Technologies’ minimally invasive devices clear blockages in the legs (PAD) by removing plaque buildup. The company’s Jetstream devices are designed to restore circulation in peripheral arteries by targeting only the affected arteries.

The deal is not expected to create any significant disruptions in Pathway’s business or changes in positions or locations, Medrad spokeswoman Alicia Cafardi said.

“From Pathway’s perspective, Bayer HealthCare’s broad and proven international distribution infrastructure presents an exciting platform for the more rapid expansion of Pathway’s product portfolio into attractive and largely underpenetrated international markets,” Pathway President and CEO Paul Buckman said in a written statement.

Medrad’s headquarters are located in Warrendale, Pa.