10.08.12
Welch Allyn Announces Job Cuts, Restructuring Plans
Welch Allyn has joined the ranks of medical device companies such as Stryker Corp. and Zimmer Holdings Inc. that have cut jobs in anticipation of the 2.3 percent medical device excise tax set to begin in January. The Skaneateles Falls, N.Y.-based medical device manufacturer announced it will cut 275 jobs, or 10 percent of its global workforce.
“We firmly believe this restructuring program is the right thing to do for the long-term success of the business, however, we also fully recognize the hardship it will cause some of our colleagues in the short term,” explained Welch Allyn CEO Steve Meyer. “Welch Allyn recognizes the value of an educated workforce to our community and our economy. The company will reimburse up to $4,000 of the cost of education for the successful completion of coursework through an accredited institution of higher learning and/or for the successful achievement of a professional certification designation offered by a recognized organization. We will make this benefit available to these employees for up to 12 months post-departure.”
On the day of the announcement—Sept. 10—45 workers were informed they would lose their jobs at the company’s headquarters. Meyer linked the job cuts to “turmoil in the U.S. market,” and the family-owned company’s goals to reshape its business, expanding into emerging global markets. The changes are needed to “really get Welch Allyn able to compete on a global scale,” he said.
Over the next three years, the company plans to establish three new product development and technology centers in Skaneateles Falls, Beaverton, Ore., and Singapore. It also intends to create a global finance shared service center in Tijuana, Mexico, and consolidate its North American manufacturing and related support functions at its largest facilities in Skaneateles Falls and Tijuana, Mexico.
The company also will perform a 90-day evaluation of its European operations to determine the optimal deployment of the business in that important market, and reorganize its Latin America business to be more competitive in the region.
“This restructuring plan will help us maintain competitive levels of investment in new products and technologies that are necessary to meet the changing needs of the global healthcare environment,” said Meyer. He noted that Welch Allyn’s global headquarters in Skaneateles Falls will continue its evolution into a high technology center, capitalizing on demand for the company’s digitally-enabled patient vital signs monitoring systems and diagnostic cardiology product offerings in addition to its traditional core opto-electronic product categories. In doing so, the facility will absorb the patient monitoring systems and low acuity vital signs product manufacturing operations from its Beaverton facility, while the company’s Tijuana operations will absorb additional thermometer probe cover, lamp and some blood pressure cuff manufacturing operations from Skaneateles Falls.
“Our plan is well thought out and tied to the rapidly changing healthcare market, and in keeping with our history of making sure we treat our employees fairly and with the highest level of respect. We are confident we will emerge from this restructuring stronger than ever,” added Meyer.
Welch Allyn has been in operation for almost 100 years, having been founded in 1915 by Francis Welch and Noah Allyn.
Boston Scientific Acquiring BridgePoint Medical
Boston Scientific Corporation is acquiring BridgePoint Medical Inc., a privately held company based in Minneapolis, Minn. BridgePoint Medical, which develops interventional cardiology technology for access to and treatment of chronic total occlusions (CTOs), has developed a proprietary, catheter-based system to treat coronary CTOs. The transaction is expected to close in the fourth quarter of 2012.
The BridgePoint Medical CTO system—comprised of the CrossBoss CTO Crossing Catheter and the Stingray CTO Re-Entry System—is designed to navigate highly diseased (occluded) coronary arteries and restore healthy blood flow. The system has received both U.S. Food and Drug Administration clearance and the CE Mark, and currently is the only crossing/re-entry system cleared in the United States for use in coronary CTOs.
“The BridgePoint Medical CTO system is an addition to our suite of cardiology products,” said Kevin Ballinger, president of the Interventional Cardiology Division at Boston Scientific. “This acquisition strengthens our portfolio and demonstrates the Boston Scientific commitment to continued leadership in interventional cardiology.”
CTOs are defined as arteries that have been occluded for three months or more, though usually there is no real way to tell how long the occlusion has existed. These occlusions prevent blood circulation to critical areas of the heart. CTO devices are designed to permit endovascular treatment in cases that otherwise might require a patient to undergo invasive intervention such as coronary artery bypass surgery.
“Complete arterial blockages pose a major challenge in the treatment of coronary artery disease, and this CTO system gives physicians a treatment option in these difficult cases,” said Marty Leon, M.D., director of the Center for Interventional Vascular Therapy at New York-Presbyterian Hospital/Columbia University Medical Center in New York, N.Y. “Many of these patients would have previously been referred for bypass surgery, typically requiring weeks of recovery. Now, many of them are able to go home within 24 hours.”
“The acquisition of BridgePoint Medical is expected to build upon our product portfolio in cardiology and represents an important part of our growth strategy in this critical market,” said Hank Kucheman, CEO at Boston Scientific. “We believe the BridgePoint coronary devices will provide the Boston Scientific interventional cardiology business a dedicated CTO solution while the Boston Scientific peripheral intervention business offers the TruePath CTO Device and OffRoad CTO Device. This will position the company as the leader in CTO technologies across the cardiovascular system.”
The transaction isn’t expected to impact adjusted earnings in 2012 and 2013, officials said. Financial terms of the transaction were not disclosed. Boston Scientific is based in Natick, Mass.
Cyberonics Invests in German Firm Cerbomed
Houston, Texas-based Cyberonics Inc. is making an initial investment of 2 million euros in Cerbomed GmbH, a privately held company in Erlangen, Germany, that is developing a non-invasive neurostimulation device for the treatment of epilepsy. Its Nemos t-VNS device received CE Mark approval for the treatment of epilepsy and depression in 2010 and for pain in 2012; it now is commercially available both in Germany and Austria.
Cyberonics also develops products for the treatment and management of epilepsy. The 25-year-old company’s core expertise is in neuromodulation.
The investment in Cerbomed may total up to 5.5 million euros and is subject to the achievement of certain clinical milestones. Cyberonics is a minority shareholder with certain rights, including representation on Cerbomed’s advisory board and an exclusive option for worldwide sales and distribution of the Nemos system for the treatment of epilepsy. The initial investment will be used to fund Cerbomed’s current clinical trial in epilepsy in Germany. Cyberonics has the option to conduct a trial in the United States to gain Food and Drug Administration approval, if desired.
“As a company focused on device solutions for epilepsy, an investment in Cerbomed’s technology is aligned with our strategic priorities and core expertise,” said Dan Moore, Cyberonics’ president and CEO. “We are excited about the opportunity to invest in a technology that may provide more patients with epilepsy another device-based therapeutic option and opportunity for improved quality of life.”
“We are delighted to welcome Cyberonics as our strategic global partner for the epilepsy indication,” added Cerbomed CEO Andreas Hartlep. “We look forward to our collaboration and continuing to understand how transcutaneous and implantable vagus nerve stimulation may be complementary technologies and provide benefit to patients.”
CareFusion Further Delays Filing Annual Report
San Diego, Calif.-based medical device firm CareFusion Corporation again has delayed filing its annual report with the U.S. Securities and Exchange Commission (SEC) for FY2012, ended June 30. A statement issued by the company reiterates the announcement it made on Aug. 29—namely, that CareFusion is consulting with the SEC about its accounting policy for sales-type leases in its Pyxis medication and supply dispensing product lines.
On Aug. 29, CareFusion was granted a 15-day extension on the filing by the SEC. The extension having expired, the company now faces a warning from the commission as well as the threat from the New York Stock Exchange (NYSE) of being delisted if it fails to file a 10-k form within six months.
“The consultation process with the SEC is ongoing,” company officials said in a statement. “Once this process is complete, the company will assess any impact on its financial statements and file its Form 10-K as soon as practicable.”
Until CareFusion files, its NYSE common stock symbol CFN will be accompanied by the marker LF, which denotes a late filing.
As of late, CareFusion has faced several Class I recalls, the class of device recalls reserved by the U.S. Food and Drug Administration for the most serious cases. It had four in the fourth quarter of FY2012 alone. However, the company did not sacrifice profit—it reported a 29 percent net profit increase on the quarter.
Teleflex Medical OEM Completes Expansion
Teleflex Medical OEM, a subsidiary of Teleflex Inc., marked the completion of the renovation and expansion of its facility in Jaffrey, N.H. on Sept. 14. Teleflex Medical OEM provides custom extrusion services, interventional catheters and other medical devices. The company’s headquarters is located in Research Triangle Park, N.C.
Increased domestic and international demand for Teleflex Medical OEM’s brand of custom extrusions, catheters, and medical devices led to the need for increased capacity, company officials report.
The multi-million dollar expansion adds 10,000 square feet to the Jaffrey facility, which includes additional research and development facilities and a larger, state-of-the-art extrusion center.
“This investment in the Jaffrey facility enhances Teleflex Medical OEM’s ability to incorporate our industry-leading innovations into the global marketplace, and accommodate our customers’ needs for technologically-advanced medical devices and custom-engineered extrusions,” said Greg Forrest, General Manager.
Teleflex Medical OEM anticipates an additional 25 new positions at the Jaffrey facility over the next several years. Currently, 318 people are employed at that location.
Cook Medical Opens New Facility in Illinois
Cook Medical has opened a new medical device manufacturing plant in Canton, Ill. The opening ceremony was held on Aug. 31, when Cook Medical President Kem Hawkins joined national and local dignitaries to dedicate the $19 million production plant that will add another 60 high-skilled jobs to the local economy. The new facility joins an existing $20 million Cook factory in Canton that opened two years ago.
“Over nearly 50 years, Cook has reinvested more than $1.5 billion dollars in plants across the United States and in key facilities overseas that now employ 10,000 people,” Hawkins said in a formal statement. “And we hope circumstances will allow us to continue that tradition.”
The new 60,000-square-foot Canton facility will manufacture polytetrafluoroethylene (commonly known as PTFE) tubing used in a wide variety of the 16,000 different medical devices Cook makes. The highly technical, equipment-driven manufacturing plant is intended to capitalize on the existing mechanical and maintenance knowledge of workers in the Canton area. Some employees formerly worked for the large International Harvester plant that once employed 3,000 people in Canton before it was closed in 1983, raising local unemployment to 17 percent. The city was selected for the new Cook plants because in addition to its ready workforce, it was the boyhood home of the late Cook Group founder Bill Cook, who wanted to help revive his hometown.
As of June 2012, the Canton unemployment rate was at 9.6 percent, 1 percentage point higher than the national rate of unemployment. State officials are hopeful Cook will help lower this number further in the coming months.
Canton Mayor Kevin Meade said he’s “amazed” at the impact the tubing plant, along with the sister plant Cook opened there two years ago that now employs more than 100 skilled workers making angiographic catheters, has had on his economically challenged community.
“It doesn’t take a huge plant with thousands of jobs to make a real impact,” the mayor said. “Even a few hundred good jobs are enough to help a town the size of Canton turn itself around.”
According to Meade, since Cook Canton opened, the local hospital, Graham Hospital, has invested more than $40 million in a new clinic and upgrades to its existing facilities. A hospital spokesperson told Medical Product Outsourcing that the expansions were not directly related to the presence of Cook, and that the new clinic and upgrades would have gone ahead as planned regardless. However, she did say that the hospital is “grateful for Cook’s presence.”
In addition, a number of new retail stores have opened and local businesses have been able to expand. After years of no new housing permits, the city also has experienced a housing boom with a new 42-unit apartment complex being built along with 16 new home construction permits issued.
Also present at the opening was U.S. Sen. Dick Durbin, D-Ill.
“I’ve been impressed with the company’s commitment to the hometown of its founder and am thrilled that Cook Medical is continuing to invest in Illinois workers and the community of Canton,” said Durbin. “While Canton has struggled economically in recent years, the quality of its workforce has remained strong. The good-paying jobs created with this new investment will have a ripple effect in terms of economic activity far outside the doors of its facilities as new workers make home improvements they’ve postponed, buy meals and clothing, and contribute to the area’s economy, which is on its way to thriving once again.”
Cook intends to work toward employing at least 350 people. Parent company Cook Group also has invested more than $15 million in Canton’s downtown square, building a new 32-room boutique hotel and buying and improving a shopping mall and other commercial properties. Founded in 1963, Cook Medical is headquartered in Bloomington, Ind., which is also where the Cook Group is based.
Welch Allyn has joined the ranks of medical device companies such as Stryker Corp. and Zimmer Holdings Inc. that have cut jobs in anticipation of the 2.3 percent medical device excise tax set to begin in January. The Skaneateles Falls, N.Y.-based medical device manufacturer announced it will cut 275 jobs, or 10 percent of its global workforce.
“We firmly believe this restructuring program is the right thing to do for the long-term success of the business, however, we also fully recognize the hardship it will cause some of our colleagues in the short term,” explained Welch Allyn CEO Steve Meyer. “Welch Allyn recognizes the value of an educated workforce to our community and our economy. The company will reimburse up to $4,000 of the cost of education for the successful completion of coursework through an accredited institution of higher learning and/or for the successful achievement of a professional certification designation offered by a recognized organization. We will make this benefit available to these employees for up to 12 months post-departure.”
On the day of the announcement—Sept. 10—45 workers were informed they would lose their jobs at the company’s headquarters. Meyer linked the job cuts to “turmoil in the U.S. market,” and the family-owned company’s goals to reshape its business, expanding into emerging global markets. The changes are needed to “really get Welch Allyn able to compete on a global scale,” he said.
Welch Allyn President and CEO Steve Meyer speaks about the restructuring of the provider of medical diagnostic products at the company's headquarters in Skaneateles Falls, N.Y. Photo courtesy of Stephen D. Cannerelli of The Post Standard. |
The company also will perform a 90-day evaluation of its European operations to determine the optimal deployment of the business in that important market, and reorganize its Latin America business to be more competitive in the region.
“This restructuring plan will help us maintain competitive levels of investment in new products and technologies that are necessary to meet the changing needs of the global healthcare environment,” said Meyer. He noted that Welch Allyn’s global headquarters in Skaneateles Falls will continue its evolution into a high technology center, capitalizing on demand for the company’s digitally-enabled patient vital signs monitoring systems and diagnostic cardiology product offerings in addition to its traditional core opto-electronic product categories. In doing so, the facility will absorb the patient monitoring systems and low acuity vital signs product manufacturing operations from its Beaverton facility, while the company’s Tijuana operations will absorb additional thermometer probe cover, lamp and some blood pressure cuff manufacturing operations from Skaneateles Falls.
“Our plan is well thought out and tied to the rapidly changing healthcare market, and in keeping with our history of making sure we treat our employees fairly and with the highest level of respect. We are confident we will emerge from this restructuring stronger than ever,” added Meyer.
Welch Allyn has been in operation for almost 100 years, having been founded in 1915 by Francis Welch and Noah Allyn.
Boston Scientific Acquiring BridgePoint Medical
Boston Scientific Corporation is acquiring BridgePoint Medical Inc., a privately held company based in Minneapolis, Minn. BridgePoint Medical, which develops interventional cardiology technology for access to and treatment of chronic total occlusions (CTOs), has developed a proprietary, catheter-based system to treat coronary CTOs. The transaction is expected to close in the fourth quarter of 2012.
The BridgePoint Medical CTO system—comprised of the CrossBoss CTO Crossing Catheter and the Stingray CTO Re-Entry System—is designed to navigate highly diseased (occluded) coronary arteries and restore healthy blood flow. The system has received both U.S. Food and Drug Administration clearance and the CE Mark, and currently is the only crossing/re-entry system cleared in the United States for use in coronary CTOs.
“The BridgePoint Medical CTO system is an addition to our suite of cardiology products,” said Kevin Ballinger, president of the Interventional Cardiology Division at Boston Scientific. “This acquisition strengthens our portfolio and demonstrates the Boston Scientific commitment to continued leadership in interventional cardiology.”
CTOs are defined as arteries that have been occluded for three months or more, though usually there is no real way to tell how long the occlusion has existed. These occlusions prevent blood circulation to critical areas of the heart. CTO devices are designed to permit endovascular treatment in cases that otherwise might require a patient to undergo invasive intervention such as coronary artery bypass surgery.
“Complete arterial blockages pose a major challenge in the treatment of coronary artery disease, and this CTO system gives physicians a treatment option in these difficult cases,” said Marty Leon, M.D., director of the Center for Interventional Vascular Therapy at New York-Presbyterian Hospital/Columbia University Medical Center in New York, N.Y. “Many of these patients would have previously been referred for bypass surgery, typically requiring weeks of recovery. Now, many of them are able to go home within 24 hours.”
“The acquisition of BridgePoint Medical is expected to build upon our product portfolio in cardiology and represents an important part of our growth strategy in this critical market,” said Hank Kucheman, CEO at Boston Scientific. “We believe the BridgePoint coronary devices will provide the Boston Scientific interventional cardiology business a dedicated CTO solution while the Boston Scientific peripheral intervention business offers the TruePath CTO Device and OffRoad CTO Device. This will position the company as the leader in CTO technologies across the cardiovascular system.”
The transaction isn’t expected to impact adjusted earnings in 2012 and 2013, officials said. Financial terms of the transaction were not disclosed. Boston Scientific is based in Natick, Mass.
Cyberonics Invests in German Firm Cerbomed
Houston, Texas-based Cyberonics Inc. is making an initial investment of 2 million euros in Cerbomed GmbH, a privately held company in Erlangen, Germany, that is developing a non-invasive neurostimulation device for the treatment of epilepsy. Its Nemos t-VNS device received CE Mark approval for the treatment of epilepsy and depression in 2010 and for pain in 2012; it now is commercially available both in Germany and Austria.
Cyberonics also develops products for the treatment and management of epilepsy. The 25-year-old company’s core expertise is in neuromodulation.
The investment in Cerbomed may total up to 5.5 million euros and is subject to the achievement of certain clinical milestones. Cyberonics is a minority shareholder with certain rights, including representation on Cerbomed’s advisory board and an exclusive option for worldwide sales and distribution of the Nemos system for the treatment of epilepsy. The initial investment will be used to fund Cerbomed’s current clinical trial in epilepsy in Germany. Cyberonics has the option to conduct a trial in the United States to gain Food and Drug Administration approval, if desired.
“As a company focused on device solutions for epilepsy, an investment in Cerbomed’s technology is aligned with our strategic priorities and core expertise,” said Dan Moore, Cyberonics’ president and CEO. “We are excited about the opportunity to invest in a technology that may provide more patients with epilepsy another device-based therapeutic option and opportunity for improved quality of life.”
“We are delighted to welcome Cyberonics as our strategic global partner for the epilepsy indication,” added Cerbomed CEO Andreas Hartlep. “We look forward to our collaboration and continuing to understand how transcutaneous and implantable vagus nerve stimulation may be complementary technologies and provide benefit to patients.”
CareFusion Further Delays Filing Annual Report
San Diego, Calif.-based medical device firm CareFusion Corporation again has delayed filing its annual report with the U.S. Securities and Exchange Commission (SEC) for FY2012, ended June 30. A statement issued by the company reiterates the announcement it made on Aug. 29—namely, that CareFusion is consulting with the SEC about its accounting policy for sales-type leases in its Pyxis medication and supply dispensing product lines.
On Aug. 29, CareFusion was granted a 15-day extension on the filing by the SEC. The extension having expired, the company now faces a warning from the commission as well as the threat from the New York Stock Exchange (NYSE) of being delisted if it fails to file a 10-k form within six months.
“The consultation process with the SEC is ongoing,” company officials said in a statement. “Once this process is complete, the company will assess any impact on its financial statements and file its Form 10-K as soon as practicable.”
Until CareFusion files, its NYSE common stock symbol CFN will be accompanied by the marker LF, which denotes a late filing.
As of late, CareFusion has faced several Class I recalls, the class of device recalls reserved by the U.S. Food and Drug Administration for the most serious cases. It had four in the fourth quarter of FY2012 alone. However, the company did not sacrifice profit—it reported a 29 percent net profit increase on the quarter.
Teleflex Medical OEM Completes Expansion
Teleflex Medical OEM, a subsidiary of Teleflex Inc., marked the completion of the renovation and expansion of its facility in Jaffrey, N.H. on Sept. 14. Teleflex Medical OEM provides custom extrusion services, interventional catheters and other medical devices. The company’s headquarters is located in Research Triangle Park, N.C.
Increased domestic and international demand for Teleflex Medical OEM’s brand of custom extrusions, catheters, and medical devices led to the need for increased capacity, company officials report.
The multi-million dollar expansion adds 10,000 square feet to the Jaffrey facility, which includes additional research and development facilities and a larger, state-of-the-art extrusion center.
“This investment in the Jaffrey facility enhances Teleflex Medical OEM’s ability to incorporate our industry-leading innovations into the global marketplace, and accommodate our customers’ needs for technologically-advanced medical devices and custom-engineered extrusions,” said Greg Forrest, General Manager.
Teleflex Medical OEM anticipates an additional 25 new positions at the Jaffrey facility over the next several years. Currently, 318 people are employed at that location.
Cook Medical Opens New Facility in Illinois
Cook Medical’s new Canton, Ill., location. Photo courtesy of Cook Medical. |
“Over nearly 50 years, Cook has reinvested more than $1.5 billion dollars in plants across the United States and in key facilities overseas that now employ 10,000 people,” Hawkins said in a formal statement. “And we hope circumstances will allow us to continue that tradition.”
The new 60,000-square-foot Canton facility will manufacture polytetrafluoroethylene (commonly known as PTFE) tubing used in a wide variety of the 16,000 different medical devices Cook makes. The highly technical, equipment-driven manufacturing plant is intended to capitalize on the existing mechanical and maintenance knowledge of workers in the Canton area. Some employees formerly worked for the large International Harvester plant that once employed 3,000 people in Canton before it was closed in 1983, raising local unemployment to 17 percent. The city was selected for the new Cook plants because in addition to its ready workforce, it was the boyhood home of the late Cook Group founder Bill Cook, who wanted to help revive his hometown.
As of June 2012, the Canton unemployment rate was at 9.6 percent, 1 percentage point higher than the national rate of unemployment. State officials are hopeful Cook will help lower this number further in the coming months.
Canton Mayor Kevin Meade said he’s “amazed” at the impact the tubing plant, along with the sister plant Cook opened there two years ago that now employs more than 100 skilled workers making angiographic catheters, has had on his economically challenged community.
“It doesn’t take a huge plant with thousands of jobs to make a real impact,” the mayor said. “Even a few hundred good jobs are enough to help a town the size of Canton turn itself around.”
According to Meade, since Cook Canton opened, the local hospital, Graham Hospital, has invested more than $40 million in a new clinic and upgrades to its existing facilities. A hospital spokesperson told Medical Product Outsourcing that the expansions were not directly related to the presence of Cook, and that the new clinic and upgrades would have gone ahead as planned regardless. However, she did say that the hospital is “grateful for Cook’s presence.”
In addition, a number of new retail stores have opened and local businesses have been able to expand. After years of no new housing permits, the city also has experienced a housing boom with a new 42-unit apartment complex being built along with 16 new home construction permits issued.
Also present at the opening was U.S. Sen. Dick Durbin, D-Ill.
“I’ve been impressed with the company’s commitment to the hometown of its founder and am thrilled that Cook Medical is continuing to invest in Illinois workers and the community of Canton,” said Durbin. “While Canton has struggled economically in recent years, the quality of its workforce has remained strong. The good-paying jobs created with this new investment will have a ripple effect in terms of economic activity far outside the doors of its facilities as new workers make home improvements they’ve postponed, buy meals and clothing, and contribute to the area’s economy, which is on its way to thriving once again.”
Cook intends to work toward employing at least 350 people. Parent company Cook Group also has invested more than $15 million in Canton’s downtown square, building a new 32-room boutique hotel and buying and improving a shopping mall and other commercial properties. Founded in 1963, Cook Medical is headquartered in Bloomington, Ind., which is also where the Cook Group is based.