07.24.12
21. Olympus Medical Systems
$4.2 Billion ($10B total)
KEY EXECUTIVES:
Yasuyuki Kimoto, Chairman
Shuichi Takayama, President & CEO
Mark Gumz, President and CEO of Olympus Corporation of the Americas
Luke Calcraft, President, Olympus Medical Systems Corp.
Haruhito Morishima, Group President of the Medical Systems Group
Charlie Goodwin, Group VP, Olympus Surgical
NO. OF EMPLOYEES: 40,000 (total)
GLOBAL HEADQUARTERS: Tokyo, Japan
The year 2011 was a roller coaster of scandal for Tokyo, Japan-based Olympus Corp. In October, British-born Michael Woodford was suddenly ousted as CEO of the company. He had been company president for six months, and two weeks prior had been promoted to CEO, when he exposed “one of the biggest and longest-running loss-hiding arrangements in Japanese corporate history,” according to The Wall Street Journal. Tsuyoshi Kikukawa, the board chairman, who had appointed Woodford to these positions, reassumed the title of CEO and president.
Woodford alleged that his removal was related to several prior acquisitions he had been seeking answers to, particularly the $2.2 billion deal in 2008 to acquire British medical equipment maker Gyrus Group. Eyebrows were raised about the $687 million paid to a middleman as a fee—a sum equal to 31 percent of the purchase price, and which ranks as the highest ever merger-and-acquisition fee. The company initially responded, on Oct. 19 that “major differences had arisen between Mr. Woodford and other management regarding the direction and conduct of the company’s business.”
Other acquisitions brought the company’s accounting and business practices into question. The purchase of three Japanese companies outside the company’s core business were recorded on the books as worth $721 million less than their acquisition value of 12 months earlier. Japanese press speculated on a connection to Yakuza (Japanese organized crime syndicates). Olympus defended itself against allegations of impropriety, citing its audit board’s view that “no dishonesty or illegality is found in the transaction itself, nor any breach of obligation to good management or any systematic errors by the directors recognized.”
On Oct. 26, Tsuyoshi Kikukawa resigned his positions as chairman, president and CEO; he was replaced by Shuichi Takayama. On Nov. 8, the company admitted that its accounting practices had been “inappropriate” and that money had been used to cover losses on investments dating back to the 1990s. The company blamed its shady accounting on former president Tsuyoshi Kikukawa, auditor Hideo Yamada and executive vice president Hisashi Mori.
Medical division sales for fiscal 2011 (ended March 31, 2012) were 4.2 billion, a drop of 1.7 percent (in yen). Operating income dropped 4.9 percent to approximately $828 million. Medical sales comprise 41 percent of the company’s revenue.
According to the company, the sales of disposable guide wires used for endoscope treatment for pancreatic ducts continued to be favorable, particularly in the Japanese market. Sales of endoscopic video systems also grew. There was an overall decline in revenue in the Medical Systems business for the period as a result of the temporary difficulties in the procurement of parts due to the impact of the Japanese earthquake and tsunami in early 2011 and the resulting adjustments made in the production of some products. Unfavorable exchange rates also impacted fiscal results. On a constant currency basis, nets sales and operating income rose 2.8 percent and 4.3 percent, respectively.
For the company overall, net sales for the year were approximately $10 billion a marginal increase of less than a percent. Net loss for the year was $590 million, compared to net income of $46 million for fiscal 2010.
In April last year Luke Calcraft was named as president of the Olympus Corporation of the Americas’ Medical Systems Group. Calcraft reports directly to Haruhito Morishima, group president of the Medical Systems Group for Olympus Corporation in Japan. Calcraft will be based in Center Valley, Pa., the company’s headquarters in the United States. In the newly created position, Calcraft will oversee all medical and surgical business lines including ear, nose and throat; gastroenterology; general surgery, gynecology; urology; respiratory and service. In addition, he will be responsible for developing strategic alliances and expanding the company’s business opportunities in both the North and South American continents.
“Luke’s appointment to this new role reflects our ongoing activities to better serve our customers’ needs, in both the medical and surgical areas, through adopting a more global management strategy,” said Morishima. “This approach will ensure that our international operations are consistent but flexible, allowing us to adapt our customer service to meet local needs.”
Calcraft, a 21-year veteran of Olympus, most recently served as the managing director of Olympus Europa’s Medical Systems and Micro-Imaging Solutions Group, responsible for the medical and microscopy businesses in Europe, Russia, the Middle East and Africa. He previously held positions as national sales manager for EndoTherapy, selling endoscopic devices in the U.K.; head of Corporate Affairs and International Medical Sales and head of Professional Training and International Medical Export Sales. Calcraft also has experience in the U.S. market, having served as chief operating officer of Olympus Surgical & Industrial America, managing Olympus’ Industrial Endoscope and Microscopy businesses in the region.
In July 2011, Olympus acquired venture-backed Spirus Medical Inc., an endoscope insertion device manufacturer based in Stoughton, Mass. The acquisition was implemented through Gyrus ACMI Inc., a consolidated subsidiary of Olympus based in the United States. Spirus makes devices that aid in the insertion and advancement of endoscopes for upper and lower endoscopy. Spirus’ manual rotation devices, developed in 2006, were used in conjunction with a conventional endoscope. Last year, the company succeeded in developing a powered spiral endoscope insertion technology driven by an integral motor incorporated into a propriety endoscope design. The powered technology consists of a rotatable soft spiral incorporated on the insertion tube of endoscopes to facilitate deep insertion of endoscopes within a shorter amount of time, as compared to conventional endoscopes. Olympus plans to develop new endoscopic systems by combining Spirus technology with its own endoscopic system technology. The company will be renamed Olympus Endo Technology America Inc.
Throughout the fiscal year, the company made a number of new product introductions.
In May last year, Olympus received U.S. Food and Drug Administration (FDA) clearance for it ScopeGuide technology, which is designed to assist gastrointestinal physicians, colorectal surgeons and nurses during a colonoscopy to visualize the colonoscope as it travels through the colon. The system uses magnetic endoscopic imaging to produce a three-dimensional view of the scope and its location within the colon in real-time. A number of small electromagnetic transmission coils located within the colonoscope itself generate a weak magnetic field, which is picked up by the ScopeGuide receiver. The received signals allow the ScopeGuide processor to calculate the location and orientation of each transmission coil, which is used to generate the 3-D rendering of the scope, displayed on a screen. A separate handheld 3-D marker helps an assistant to visualize where abdominal pressure will be most effective.
In October, Olympus introduced a new surgical imaging platform, Visera Elite, and a new 5 millimeter high-definition (HD) deflectable videolaparoscope, called the Endoeye Flex 5. The Visera Elite platform is equipped with HDTV imaging capability and advanced image processing to provide the best possible image for Olympus surgical scopes across multiple specialties. The Endoeye Flex 5 offers HD resolution in a 5 millimeter diameter scope. The device uses digital-chip technology to place the camera on the tip of the scope enabling doctors to see fine details during surgical procedures.
Additionally, the scope allows for 100-degree angulation in all directions providing complete visualization of complex anatomical structures, according to the company. The deflectable tip on the Endoeye Flex 5 offers surgeons the flexibility to change the direction of view giving them a new way to observe the anatomy. It also minimizes potential collisions between instruments, which is common when operating in narrow spaces in procedures like single-site surgery, helping to ensure intra-abdominal triangulation. In addition, the Endoeye Flex 5 is autoclavable, which can result in significant reprocessing cost savings for the hospital. The system is designed for a range of bariatric, thoracic, colorectal and other specialties, including the single-site surgery approach. Olympus offers a system solution for single-site surgery, comprising access, visualization and instrumentation. In laparo-endoscopic single-site surgery, the TriPort+ access system is placed into an umbilical incision allowing single-port access for up to four instruments. The Endoeye Flex 5 allows the surgeon to get the desired view and position the scope away from the instruments. After the procedure, the surgeon removes the port, allowing the natural contours of the bellybutton to help hide the small surgical incision. Single-site surgery has the potential to result in improved healing for patients over traditional open surgery.
In December the company introduced a line of EZ Shot 2 single-use aspiration needles for endoscopic ultrasound (EUS) procedures. According to the company, the four needles offer improved puncture capability along with an adjustable sheath designed to help physicians more accurately approach the targeted site. Available in a complete selection of sizes and styles, the surface of the EZ Shot 2 needle is designed with unique echogenic dimples to ensure it is clearly visible while performing endoscopic ultrasound.
March of this year brought FDA clearance of Olympus’ Thunderbeat line of hand instruments and universal surgical platform. According to the company, at the time of its release, Thunderbeat was the only surgical device that combined advanced bipolar and ultrasonic energies into a single multi-functional hand instrument allowing surgeons to simultaneously seal and cut vessels up to and including 7 millimeters in size with minimal thermal spread. Additionally, it is designed for faster cutting speeds, improved vessel sealing, and higher grasping forces at the tip when compared to other energy instruments. In can be used in any procedure in which cutting, vessel sealing and cutting, coagulation, grasping, and dissection is performed.
“Our aim as a leading global healthcare company is to advance medical and surgical techniques and minimally invasive procedures through the development of inspiring technological solutions and innovative products like Thunderbeat that overcome the day-to-day constraints that physicians and surgeons face,” said Calcraft, president of Olympus Corporation of the Americas’ Medical Systems Group. “Olympus is committed to helping physicians and surgeons perform advanced procedures that elevate the standards of patient care and deliver better treatment, while improving outcomes and enhancing quality of life.”
$4.2 Billion ($10B total)
KEY EXECUTIVES:
Yasuyuki Kimoto, Chairman
Shuichi Takayama, President & CEO
Mark Gumz, President and CEO of Olympus Corporation of the Americas
Luke Calcraft, President, Olympus Medical Systems Corp.
Haruhito Morishima, Group President of the Medical Systems Group
Charlie Goodwin, Group VP, Olympus Surgical
NO. OF EMPLOYEES: 40,000 (total)
GLOBAL HEADQUARTERS: Tokyo, Japan
The year 2011 was a roller coaster of scandal for Tokyo, Japan-based Olympus Corp. In October, British-born Michael Woodford was suddenly ousted as CEO of the company. He had been company president for six months, and two weeks prior had been promoted to CEO, when he exposed “one of the biggest and longest-running loss-hiding arrangements in Japanese corporate history,” according to The Wall Street Journal. Tsuyoshi Kikukawa, the board chairman, who had appointed Woodford to these positions, reassumed the title of CEO and president.
Woodford alleged that his removal was related to several prior acquisitions he had been seeking answers to, particularly the $2.2 billion deal in 2008 to acquire British medical equipment maker Gyrus Group. Eyebrows were raised about the $687 million paid to a middleman as a fee—a sum equal to 31 percent of the purchase price, and which ranks as the highest ever merger-and-acquisition fee. The company initially responded, on Oct. 19 that “major differences had arisen between Mr. Woodford and other management regarding the direction and conduct of the company’s business.”
Other acquisitions brought the company’s accounting and business practices into question. The purchase of three Japanese companies outside the company’s core business were recorded on the books as worth $721 million less than their acquisition value of 12 months earlier. Japanese press speculated on a connection to Yakuza (Japanese organized crime syndicates). Olympus defended itself against allegations of impropriety, citing its audit board’s view that “no dishonesty or illegality is found in the transaction itself, nor any breach of obligation to good management or any systematic errors by the directors recognized.”
On Oct. 26, Tsuyoshi Kikukawa resigned his positions as chairman, president and CEO; he was replaced by Shuichi Takayama. On Nov. 8, the company admitted that its accounting practices had been “inappropriate” and that money had been used to cover losses on investments dating back to the 1990s. The company blamed its shady accounting on former president Tsuyoshi Kikukawa, auditor Hideo Yamada and executive vice president Hisashi Mori.
Medical division sales for fiscal 2011 (ended March 31, 2012) were 4.2 billion, a drop of 1.7 percent (in yen). Operating income dropped 4.9 percent to approximately $828 million. Medical sales comprise 41 percent of the company’s revenue.
According to the company, the sales of disposable guide wires used for endoscope treatment for pancreatic ducts continued to be favorable, particularly in the Japanese market. Sales of endoscopic video systems also grew. There was an overall decline in revenue in the Medical Systems business for the period as a result of the temporary difficulties in the procurement of parts due to the impact of the Japanese earthquake and tsunami in early 2011 and the resulting adjustments made in the production of some products. Unfavorable exchange rates also impacted fiscal results. On a constant currency basis, nets sales and operating income rose 2.8 percent and 4.3 percent, respectively.
For the company overall, net sales for the year were approximately $10 billion a marginal increase of less than a percent. Net loss for the year was $590 million, compared to net income of $46 million for fiscal 2010.
In April last year Luke Calcraft was named as president of the Olympus Corporation of the Americas’ Medical Systems Group. Calcraft reports directly to Haruhito Morishima, group president of the Medical Systems Group for Olympus Corporation in Japan. Calcraft will be based in Center Valley, Pa., the company’s headquarters in the United States. In the newly created position, Calcraft will oversee all medical and surgical business lines including ear, nose and throat; gastroenterology; general surgery, gynecology; urology; respiratory and service. In addition, he will be responsible for developing strategic alliances and expanding the company’s business opportunities in both the North and South American continents.
“Luke’s appointment to this new role reflects our ongoing activities to better serve our customers’ needs, in both the medical and surgical areas, through adopting a more global management strategy,” said Morishima. “This approach will ensure that our international operations are consistent but flexible, allowing us to adapt our customer service to meet local needs.”
Calcraft, a 21-year veteran of Olympus, most recently served as the managing director of Olympus Europa’s Medical Systems and Micro-Imaging Solutions Group, responsible for the medical and microscopy businesses in Europe, Russia, the Middle East and Africa. He previously held positions as national sales manager for EndoTherapy, selling endoscopic devices in the U.K.; head of Corporate Affairs and International Medical Sales and head of Professional Training and International Medical Export Sales. Calcraft also has experience in the U.S. market, having served as chief operating officer of Olympus Surgical & Industrial America, managing Olympus’ Industrial Endoscope and Microscopy businesses in the region.
In July 2011, Olympus acquired venture-backed Spirus Medical Inc., an endoscope insertion device manufacturer based in Stoughton, Mass. The acquisition was implemented through Gyrus ACMI Inc., a consolidated subsidiary of Olympus based in the United States. Spirus makes devices that aid in the insertion and advancement of endoscopes for upper and lower endoscopy. Spirus’ manual rotation devices, developed in 2006, were used in conjunction with a conventional endoscope. Last year, the company succeeded in developing a powered spiral endoscope insertion technology driven by an integral motor incorporated into a propriety endoscope design. The powered technology consists of a rotatable soft spiral incorporated on the insertion tube of endoscopes to facilitate deep insertion of endoscopes within a shorter amount of time, as compared to conventional endoscopes. Olympus plans to develop new endoscopic systems by combining Spirus technology with its own endoscopic system technology. The company will be renamed Olympus Endo Technology America Inc.
Throughout the fiscal year, the company made a number of new product introductions.
In May last year, Olympus received U.S. Food and Drug Administration (FDA) clearance for it ScopeGuide technology, which is designed to assist gastrointestinal physicians, colorectal surgeons and nurses during a colonoscopy to visualize the colonoscope as it travels through the colon. The system uses magnetic endoscopic imaging to produce a three-dimensional view of the scope and its location within the colon in real-time. A number of small electromagnetic transmission coils located within the colonoscope itself generate a weak magnetic field, which is picked up by the ScopeGuide receiver. The received signals allow the ScopeGuide processor to calculate the location and orientation of each transmission coil, which is used to generate the 3-D rendering of the scope, displayed on a screen. A separate handheld 3-D marker helps an assistant to visualize where abdominal pressure will be most effective.
In October, Olympus introduced a new surgical imaging platform, Visera Elite, and a new 5 millimeter high-definition (HD) deflectable videolaparoscope, called the Endoeye Flex 5. The Visera Elite platform is equipped with HDTV imaging capability and advanced image processing to provide the best possible image for Olympus surgical scopes across multiple specialties. The Endoeye Flex 5 offers HD resolution in a 5 millimeter diameter scope. The device uses digital-chip technology to place the camera on the tip of the scope enabling doctors to see fine details during surgical procedures.
Additionally, the scope allows for 100-degree angulation in all directions providing complete visualization of complex anatomical structures, according to the company. The deflectable tip on the Endoeye Flex 5 offers surgeons the flexibility to change the direction of view giving them a new way to observe the anatomy. It also minimizes potential collisions between instruments, which is common when operating in narrow spaces in procedures like single-site surgery, helping to ensure intra-abdominal triangulation. In addition, the Endoeye Flex 5 is autoclavable, which can result in significant reprocessing cost savings for the hospital. The system is designed for a range of bariatric, thoracic, colorectal and other specialties, including the single-site surgery approach. Olympus offers a system solution for single-site surgery, comprising access, visualization and instrumentation. In laparo-endoscopic single-site surgery, the TriPort+ access system is placed into an umbilical incision allowing single-port access for up to four instruments. The Endoeye Flex 5 allows the surgeon to get the desired view and position the scope away from the instruments. After the procedure, the surgeon removes the port, allowing the natural contours of the bellybutton to help hide the small surgical incision. Single-site surgery has the potential to result in improved healing for patients over traditional open surgery.
In December the company introduced a line of EZ Shot 2 single-use aspiration needles for endoscopic ultrasound (EUS) procedures. According to the company, the four needles offer improved puncture capability along with an adjustable sheath designed to help physicians more accurately approach the targeted site. Available in a complete selection of sizes and styles, the surface of the EZ Shot 2 needle is designed with unique echogenic dimples to ensure it is clearly visible while performing endoscopic ultrasound.
March of this year brought FDA clearance of Olympus’ Thunderbeat line of hand instruments and universal surgical platform. According to the company, at the time of its release, Thunderbeat was the only surgical device that combined advanced bipolar and ultrasonic energies into a single multi-functional hand instrument allowing surgeons to simultaneously seal and cut vessels up to and including 7 millimeters in size with minimal thermal spread. Additionally, it is designed for faster cutting speeds, improved vessel sealing, and higher grasping forces at the tip when compared to other energy instruments. In can be used in any procedure in which cutting, vessel sealing and cutting, coagulation, grasping, and dissection is performed.
“Our aim as a leading global healthcare company is to advance medical and surgical techniques and minimally invasive procedures through the development of inspiring technological solutions and innovative products like Thunderbeat that overcome the day-to-day constraints that physicians and surgeons face,” said Calcraft, president of Olympus Corporation of the Americas’ Medical Systems Group. “Olympus is committed to helping physicians and surgeons perform advanced procedures that elevate the standards of patient care and deliver better treatment, while improving outcomes and enhancing quality of life.”
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