07.29.15
$3.8 Billion
Here and gone in a flash.
Thus describes the brief existence of CareFusion Corporation, the Cardinal Health spinoff with perhaps the shortest stint on MPO’s Top 30 list.
Spawned from the Clinical and Medical Products segment businesses of its parent company, CareFusion began trading on the New York Stock Exchange on Sept. 1, 2009. The San Diego, Calif.-based firm led a fairly normal existence, growing through acquisitions (Medegen Inc. in 2010, U.K. Medical Limited and Intermed Equipamento Medico Hospitalar Ltda in 2012, Sendal and Vital Signs Inc. in 2013) before being purchased last fall at the tender age of 5 for $12.2 billion by Franklin Lakes, N.J.-based Becton Dickinson and Co.
“As part of BD, we see new growth opportunities for our products in global markets, new value we can create for our customers and new opportunities for our employees as part of what will become one of the largest, global leaders in med-tech,” CareFusion Chairman/CEO Kieran T. Gallahue said when the deal was announced. “The transaction delivers attractive value for CareFusion shareholders, and represents a powerful endorsement of our strong positions in medication management, informatics across our device platforms and leading products to help improve the effectiveness of acute-care procedures.”
The deal closed in mid-March, and CareFusion now is part of BD’s Medical segment. (For more details on the merger’s logic, turn to the Becton Dickinson listing on page 82).
CareFusion’s final year as an independent company was a relatively busy one: It released a handful of new products and settled a federal whistleblower lawsuit for $40.1 million. Its January 2014 agreement with the U.S. Justice Department ended a three-year investigation into allegations of wrongful business practices levied by Cynthia Kirk, Ph.D., a former vice president in the firm’s infection prevention business unit. By settling the case, CareFusion did not admit to any liability.
In a 2010 lawsuit she filed in federal court, Kirk accused CareFusion of violating the U.S. False Claims Act by paying kickbacks to Charles Denham, M.D., via two software development contracts with his company, Health Care Concepts. Kirk, later joined by the federal government, alleged the contracts were shams and exceeded the fair market value for Health Care Concept’s services; she claimed the payments were structured to hide kickbacks to Denham so he could help increase sales of CareFusion’s ChoraPrep sterilizer product through his position as co-chair of the National Quality Forum’s Safe Practices Committee.
The not-for-profit National Quality Forum is an independent panel of healthcare providers that reviews, endorses and recommends uniform healthcare performance measures and practices. The scheme resulted in the improper billing of the Medicare and Medicaid programs for uses of ChloraPrep beyond its Food and Drug Administration-approved labeling. Approved use is limited to preparing a patient’s skin before surgery or injection.
CareFusion released the bulk of its new products in the second half of its fiscal year (ended June 30, 2014). In March, it debuted a new line of bipolar electrosurgical instruments under the V. Mueller brand that includes both forceps and scissors with roughly 200 options—non-stick, titanium and irrigation among them—to meet the specific requirements of surgeons. Industry trends indicate that surgeons are migrating to bipolar electrosurgery because it causes less thermal damage to nearby tissue compared to monopolar instruments.
A key feature of the new scissors is a single-point connection to the electrical source, which reduces the number of wires attached to the handles to improve maneuverability and ease-of-use.
In June, the company launched three new products designed to help reduce surface contamination or the presence of microorganisms that can potentially cause infections during hospital stays and procedures:
Income from continuing operations increased 7 percent to $417 million, or $1.96 per diluted share. Adjusted income from continuing operations swelled 6 percent from the prior year to $503 million, or 11 percent per diluted share to $2.36.
FY14 operating expenses totaled $1.29 billion on a reported basis and $1.18 billion on an adjusted basis. Executives attributed the increase to higher incentive compensation as well as the 2013 purchases of Sendal, an infusion specialty disposable manufacturer in Spain, and the Vital Signs division of GE Healthcare for $500 million. Vital Signs makes single-patient-use consumables for respiratory care and anesthesiology, and markets temperature management and patient monitoring consumables products.
CareFusion reported gains in both of its reporting segments, though Procedural Solutions significantly outpaced Medical Systems. Sales in the Medical Systems segment rose 3 percent to $2.39 billion, led by Infusion and strong Dispensing installations during the fourth quarter. Segment profit declined 8 percent from the prior year to $433 million, a decrease of 6 percent to $490 million on an adjusted basis, driven by longer than expected installation cycles in the Dispensing business during the first half of the year and product revenue mix negatively affecting segment margins.
Within the Procedural Solutions segment, revenue increased 19 percent from the prior year to $1.45 billion. The increase was driven by growth across all business lines and its clinically differentiated products and contributions from the Vital Signs acquisition. Segment profit declined 1 percent to $188 million from the prior year and increased 17 percent to $256 million on an adjusted basis.
Here and gone in a flash.
Thus describes the brief existence of CareFusion Corporation, the Cardinal Health spinoff with perhaps the shortest stint on MPO’s Top 30 list.
Spawned from the Clinical and Medical Products segment businesses of its parent company, CareFusion began trading on the New York Stock Exchange on Sept. 1, 2009. The San Diego, Calif.-based firm led a fairly normal existence, growing through acquisitions (Medegen Inc. in 2010, U.K. Medical Limited and Intermed Equipamento Medico Hospitalar Ltda in 2012, Sendal and Vital Signs Inc. in 2013) before being purchased last fall at the tender age of 5 for $12.2 billion by Franklin Lakes, N.J.-based Becton Dickinson and Co.
“As part of BD, we see new growth opportunities for our products in global markets, new value we can create for our customers and new opportunities for our employees as part of what will become one of the largest, global leaders in med-tech,” CareFusion Chairman/CEO Kieran T. Gallahue said when the deal was announced. “The transaction delivers attractive value for CareFusion shareholders, and represents a powerful endorsement of our strong positions in medication management, informatics across our device platforms and leading products to help improve the effectiveness of acute-care procedures.”
The deal closed in mid-March, and CareFusion now is part of BD’s Medical segment. (For more details on the merger’s logic, turn to the Becton Dickinson listing on page 82).
CareFusion’s final year as an independent company was a relatively busy one: It released a handful of new products and settled a federal whistleblower lawsuit for $40.1 million. Its January 2014 agreement with the U.S. Justice Department ended a three-year investigation into allegations of wrongful business practices levied by Cynthia Kirk, Ph.D., a former vice president in the firm’s infection prevention business unit. By settling the case, CareFusion did not admit to any liability.
In a 2010 lawsuit she filed in federal court, Kirk accused CareFusion of violating the U.S. False Claims Act by paying kickbacks to Charles Denham, M.D., via two software development contracts with his company, Health Care Concepts. Kirk, later joined by the federal government, alleged the contracts were shams and exceeded the fair market value for Health Care Concept’s services; she claimed the payments were structured to hide kickbacks to Denham so he could help increase sales of CareFusion’s ChoraPrep sterilizer product through his position as co-chair of the National Quality Forum’s Safe Practices Committee.
The not-for-profit National Quality Forum is an independent panel of healthcare providers that reviews, endorses and recommends uniform healthcare performance measures and practices. The scheme resulted in the improper billing of the Medicare and Medicaid programs for uses of ChloraPrep beyond its Food and Drug Administration-approved labeling. Approved use is limited to preparing a patient’s skin before surgery or injection.
CareFusion released the bulk of its new products in the second half of its fiscal year (ended June 30, 2014). In March, it debuted a new line of bipolar electrosurgical instruments under the V. Mueller brand that includes both forceps and scissors with roughly 200 options—non-stick, titanium and irrigation among them—to meet the specific requirements of surgeons. Industry trends indicate that surgeons are migrating to bipolar electrosurgery because it causes less thermal damage to nearby tissue compared to monopolar instruments.
A key feature of the new scissors is a single-point connection to the electrical source, which reduces the number of wires attached to the handles to improve maneuverability and ease-of-use.
In June, the company launched three new products designed to help reduce surface contamination or the presence of microorganisms that can potentially cause infections during hospital stays and procedures:
- ChloraPrep 1 mL applicator provides clinicians with a preferred applicator design and the same formulation as all other ChloraPrep applicators but in a new 1 mL size. Executives said the new size is ideal for procedures with an application area approximately 2.5 inches by 2.5 inches or smaller.
- The ChloraShield IV dressing with chlorhexidine gluconate (CHG) antimicrobial is a flexible and breathable dressing, that enhances patient care during vascular access procedures. The dressing features BeneHold CHG, an adhesive technology from Vancive Medical Technologies, which comfortably secures the dressing to the skin, absorbs fluid and protects the site from external contaminants. The CHG incorporated within the adhesive preserves the dressing from microbial growth. ChloraShield dressings are designed to be easy for clinicians to apply and remove, and comfortable for patients to wear.
- The MaxZero needleless connector is designed to help improve patient safety and promote nursing best practices. With a solid, sealed surface, the connector provides a barrier to bacteria and contamination and enables effective three second disinfection with an alcohol pad. The design of the MaxZero needleless connector prevents reflux of blood into the catheter at disconnect and also has a smaller profile. A clear fluid path enhances flushing and anti-reflux technology prevents the need for a clamping sequence, helping save nurses time and reducing process steps.
Income from continuing operations increased 7 percent to $417 million, or $1.96 per diluted share. Adjusted income from continuing operations swelled 6 percent from the prior year to $503 million, or 11 percent per diluted share to $2.36.
FY14 operating expenses totaled $1.29 billion on a reported basis and $1.18 billion on an adjusted basis. Executives attributed the increase to higher incentive compensation as well as the 2013 purchases of Sendal, an infusion specialty disposable manufacturer in Spain, and the Vital Signs division of GE Healthcare for $500 million. Vital Signs makes single-patient-use consumables for respiratory care and anesthesiology, and markets temperature management and patient monitoring consumables products.
CareFusion reported gains in both of its reporting segments, though Procedural Solutions significantly outpaced Medical Systems. Sales in the Medical Systems segment rose 3 percent to $2.39 billion, led by Infusion and strong Dispensing installations during the fourth quarter. Segment profit declined 8 percent from the prior year to $433 million, a decrease of 6 percent to $490 million on an adjusted basis, driven by longer than expected installation cycles in the Dispensing business during the first half of the year and product revenue mix negatively affecting segment margins.
Within the Procedural Solutions segment, revenue increased 19 percent from the prior year to $1.45 billion. The increase was driven by growth across all business lines and its clinically differentiated products and contributions from the Vital Signs acquisition. Segment profit declined 1 percent to $188 million from the prior year and increased 17 percent to $256 million on an adjusted basis.