Prof. Dr. Heinz-Walter Große, Chairman of the Management Board and Chief Human Resources Officer
Dr. Annette Beller, CFO
Anna Maria Braun, LL.M., President, Asia Pacific
Dr. Meinrad Lugan, Head of Hospital Care and OPM Divisions
Caroll H. Neubauer, LL.M., Head of North America Region
Dr. Joachim Schulz, Head of Aesculap Division
Markus Strotmann, Head of Avitum Division
NO. OF EMPLOYEES: 61,583
GLOBAL HEADQUARTERS: Melsungen, Germany
In this era of such substantial M&A activity, it’s somewhat unusual to see two major players in a particular therapeutic space join forces to collaborate on a joint venture that results in a new product technology. Much more often, we see one medtech giant make a play for another in a full company merger. Or, at a smaller scale, one company may divest a division, product line, or technology to another in an effort to streamline its focus on serving specific healthcare needs.
Regardless of the norm, collaboration does occur and ultimately, is likely in the best interests of patients as it helps leverage the best each firm has to offer. That’s the scenario that played out between B. Braun and Philips—the arrangement announced in April 2017. Coupling the expertise of B. Braun for its anesthesia and pain management acumen with Philips for its knowledge of ultrasound and image-guided therapy solutions, the anticipated output of the multi-year alliance will be innovative solutions to improve ultrasound-guided regional anesthesia. This type of therapy is a growing alternative to general anesthesia. The end results would also be instrumental in enhancing vascular access, such as procedures to insert catheters into deeply seated veins.
“Philips and B. Braun have a reputation for clinical innovations and a shared commitment to work with patients and care providers to optimize healthcare delivery and improve patient outcomes,” said Rob Cascella, chief business leader of the Diagnosis & Treatment businesses at Philips. “By partnering with B. Braun, we have created a solution for ultrasound-guided regional anesthesia comprising the Xperius ultrasound system, decision support software, echogenic needles, and a suite of services. We look forward to jointly developing further innovations. This new alliance is a great example of our commitment to partnering with industry leaders with complementary skills to increase our footprint in the therapy market.”
The Xperius ultrasound system, the first technology solution resulting from the cooperative effort, would be made available in both a cart version and a mobile tablet solution. It was designed specifically to support the needs in regional anesthesia at the point of care. According to the companies in an announcement of the alliance, regional anesthesia can have significant advantages over general anesthesia for both patients and hospitals, such as reduced opioid consumption, fewer side effects (such as nausea), and faster post-surgical recovery. But the implementation of regional anesthesia can be challenging to perform. As a result, the companies recognized the need for new solutions that improve the safety, effectiveness, and efficiency of regional anesthesia procedures.
“Our customers are looking for fully integrated system solutions that address all aspects of their everyday work in caring for patients, including the enhanced efficiency needed to meet ever-increasing demand for their services,” said Dr. Meinrad Lugan, member of the board for the Hospital Care Division at B. Braun. “This new alliance with Philips illustrates our commitment to sharing expertise, not only with our customers, but also with other key technology players, to meet healthcare needs and challenges faced today and into the future.”
ANALYST INSIGHTS: B. Braun continues to quietly execute in its core markets. With its mix of OEM and hospital products, its portfolio management seems a little bit complicated. However, I’m sure somewhere in Germany, they are confidently executing a grand master plan.
—Dave Sheppard, Co-Founder and Principal, MedWorld Advisors
According to the announcement, the Xperius platform would be co-branded and sold via B. Braun’s global sales network, with Philips providing installation and service.
Perhaps inspired by the value of the potential output of these collaboration agreements, B. Braun announced another such arrangement with another company later that same month. While not to the same scale as the Philips deal, B. Braun announced an alliance with Christie Medical Holdings, centered specifically around the latter’s vein finder technology—the VeinViewer System.
The deal involves B. Braun becoming the exclusive U.S. distributor of the VeinViewer System, which then enables the firm to couple the device with its own line of IV products, such as its Introcan Safety IV catheter and STEADYCare extension set with Wedge catheter stabilizer. With as many as 90 percent of hospital patients receiving a peripheral IV catheter as part of their treatment plan and the VeinViewer saving time for IV insertion and improving first stick success, the tandem offers the opportunity for significant savings at healthcare facilities.
“These technologies are intended to work together to improve placement, insertion, duration, and safety associated with peripheral IV catheter therapy,” said Tom Sutton, B. Braun Medical’s vice president of marketing for IV Systems, Vascular Access, and Pharmacy Admixture Products. “The VeinViewer technology is an excellent addition to our infusion therapy product line, because it addresses the first critical step in peripheral IV therapy success by helping the clinician select the best vein for placing an IV catheter. Our hospital customers are seeking solutions to improve the patient experience associated with peripheral IV access. This collaboration helps us achieve that.”
The Xperius platform and VeinViewer join B. Braun’s portfolio of 5,000 healthcare technology offerings (95 percent of which are manufactured directly by the company) that resulted in 6.8 billion euros in sales for the German firm in its 2017 fiscal year, which ended Dec. 31. That figure represented a 4.9 percent increase over 2016’s 6.5 billion euros. Those product lines and brands—addressing 18 therapy fields in total—are divided into four divisions: Hospital Care, Aesculap, Out Patient Market (OPM), and B. Braun Avitum.
Taking a closer look at the performance of these individual segments reveals that all four played a role in the company’s increases over the prior year. The Hospital Care division, which focuses on products and services primarily involved with infusion therapy, nutrition therapy, and pain therapy, posted a 4.1 percent gain (3.1 billion euros) over the prior year. The Aesculap division, providing expertise in surgical, orthopedic, and interventional treatment concepts related to inpatient and outpatient care, rose moderately over 2016 by 3.6 percent (1.8 billion euros).
The most impressive increase of all the units, a 9.2 percent gain (1 billion euros), was enjoyed by B. Braun’s Avitum division—dedicated to offering products and services for people with chronic and acute kidney failure. Finally, the Out Patient Market division, contributing with a 5.9 percent increase (828 million euros) of its own over the previous year, meets the needs of patients with chronic diseases outside the hospital setting.
Further, the Latin America and Asia Pacific markets posted especially strong gains for the company, notching increases of 8.9 percent and 9.2 percent respectively in local currencies. North America sales rose by 5.2 percent while the Africa/Middle East region exceed that with a 9.2 percent gain in local currencies. Europe’s rise mirrored that of North America, posting a 5.1 percent increase over 2016 (not including Germany, which grew by 3.5 percent).
While the company’s financials painted a rosy picture for the medtech firm in 2017, there were some rocky roads the organization traveled during the year. In May, B. Braun received an FDA warning letter regarding an inspection from the prior spring (2016) of an Irvine, Calif., facility. The letter cited issues with the location’s CAPA procedures and repeat violations of inadequate leak detection for IV products. A recommendation was given that the firm should engage a consultant to assist in meeting CGMP requirements.
The company also faced legal challenges during the year. A lawsuit was filed alleging that one of B. Braun’s blood clot filters caused the death of a patient. That patient was implanted with an IVC filter in March 2015. According to reports, the device fractured and pieces lodged within the heart and lungs. The lawsuit charged that the product was defective and dangerous when it was sold.
Another lawsuit targeted B. Braun subsidiary Aesculap Implant Systems. That suit revolved around the firm’s ceramic-coated artificial knee, alleging the ceramic joints did not effectively adhere to the patients’ bones, rendering them defective. Further, it was alleged the ceramic coating permitted moisture to collect between the bone cement and the implants, which caused the implants to become loose and fail.