KEY EXECUTIVES:
Takashi Wachi, Representative Director and Chairman
Akira Takahashi, Representative Director and President
Koji Nakao, Chairman and CEO, Terumo Medical Corporation; Director and Sr. Managing Exec.
Officer, International BusinessDivision
Takayoshi Mimura, Director and Managing Exec. Officer, Group President of General Hospital
Business Group
Yutaro Shintaku, Director and Sr. Exec. Officer, Group President of Cardiac and Vascular Business
Group
Mark Sutter, Exec. Officer, President andCEO, Terumo Cardiovascular Systems Corporation
GLOBAL HEADQUARTERS: Tokyo, Japan
Several years ago, executives at Terumo Corp. set a rather lofty goal for the company: to amass 300 billion yen in net sales and 63 billion yen in operating income by the end of fiscal 2007.
Terumo achieved that goal within its self-imposed deadline, posting $3 billion ($306 billion yen) in net sales and $669 million (66 billion yen) in operating income in fiscal 2007, ended March 31, 2008. Net sales increased 10.8 percent compared with the $2.35 billion (276.4 billion yen) the company reported in fiscal 2006, and operating income jumped 14.5 percent compared with the $497.2 million (58.4 billion yen) Terumo posted in the previous fiscal year.
“Over the three-year period…we have improved our performance in all of our business and geographical segments, and these improvements will definitely contribute to the further growth of the Terumo Group,” Takashi Wachi, Terumo representative director and chairman, wrote in the company’s 2007 annual report. “Of course, we are not satisfied with our current position. Rather, we see the successful achievement of our targets merely as a stepping stone toward attaining higher goals.”
If the company’s fiscal 2007 results are any indication, Terumo is well on its way toward attaining those higher goals. Net sales improved across all business segments, with the General Hospital division posting a 9.2 percent increase to end the year with $1.5 billion in revenue. Operating income was $268.8 million, a 19.8 percent increase compared with fiscal 2006. Hospital equipment sales generated more than half the revenue in this division in fiscal 2007, contributing $859.1 million to the bottom line. Blood transfusion systems sales grew 17.2 percent to $235.4 million. Executives attributed the double-digit growth of blood transfusion systems to a switch to the use of in-line filter bags that remove leukocytes and thus, improve the safety of transfusions. Demand for these bags was high in Japan and Asia.
Cardiac and vascular product sales increased 14 percent to $1.2 billion in fiscal 2007. Interventional systems sales grew 20.5 percent, totaling $770.8 million, while cardiovascular systems products generated $381.2 million in revenue for the division. Terumo executives attributed the growth of interventional and cardiovascular systems sales to several new products that were released in fiscal 2007, including Hiryu, a percutaneous transluminal coronary angioplasty dilation catheter that features high pressure resistance and capability in reaching peripheral blood vessels. Market share and sales of the product have steadily increased since its debut in October 2007.
Other products that contributed to the sales growth of interventional products were the DuraHeart, an implantable third-generation left ventricular assist system that was released in Europe in August 2007, and Nobori, a drug-eluting stent system that was approved for sale in Europe in February 2008.
Vascular graft product sales totaled $95.4 million, a 0.4 percent decrease compared with the $81.5 million these devices garnered for Terumo in fiscal 2006. Executives did not give a reason for the slight sales slip, though the company voluntarily recalled its vascular graft Triplex in December 2007.
Terumo did not specify the problem with the graft, saying only that it found one defective product and could not “rule out the possibility that the same defect may be found in products in the market.”
Demand for the company’s cardiac and vascular products was high in Eastern Europe, Russia, and North and South America. Asia and other parts of the world showed a preference for general hospital equipment and blood glucose monitors, which captured a 24 percent share of the Japanese market.
Diabetes care products, which include blood glucose monitors, generated nearly half the total revenue in Terumo’s Home Health Care division in fiscal 2007. Of the $306.7 million in total division sales, $141.5 million came from diabetes care products and $71 million was raised from the sale of continuous ambulatory peritoneal dialysis systems. Other product sales garnered $94.1 million for the division. Amid stagnant growth of the home-based medicine market in Japan, sales of home infusion and oxygen therapy systems showed an 11.6 percent increase in fiscal 2007.