Michael Barbella03.04.09
Industry News
The MedTech group acquires TDC Medical.
Michael Barbella
The MedTech Group, a contract manufacturer of medical devices based in South Plainfield, N.J., has acquired TDC Medical, a firm that provides design, development and manufacturing services for disposable and reusable medical devices.
The partnership combines MedTech’s experience in plastic technology and medical product manufacturing with TDC’s expertise in medical product design, development and intellectual property creation. Executives from both companies said they expect the merger to be successful based on the two firms’ similar ethical cultures, their exclusive focus on the healthcare industry and their focus on customer satisfaction.
“The combination of The MedTech Group and TDC Medical brings forth unparalleled customer service, world-class product engineering and cutting edge manufacturing know-how and technology,” said George Blank, MedTech’s president. “We intend to combine both companies’ passion for customer satisfaction to support the needs of emerging and established OEM customers in the medical marketplace.”
Based in Marlborough, Mass., TDC Medical has design and development facilities in Marlborough, Sunnyvale, Calif., and Boulder, Colo. The MedTech Group has manufacturing facilities in South Plainfield and Middlesex, N.J., West Haven, Conn., Vega Baja, Puerto Rico, and Heredia, Costa Rica.
APEC Expands Medical Device Manufacturing Plant
APEC has expanded its medical device manufacturing plant in California.
The 12-year-old company added three new cleanrooms to its facility in Baldwin Park, Calif.—a 10,000-square-foot Class 100,000 cleanroom (ISO Class 8) for injection molding and assembly, a Class 100,000 assembly room, and a Class 10,000 assembly room (ISO Class 7). The company also has doubled the size of its metrology lab, adding additional software and several pieces of equipment for performing color inspection and measurement.
According to the company, the expansion will enable it to increase its capacity for molding, metrology, and cleanroom assembly by 50 percent.
Specializing in thermoplastic, silicone, insert, and two-shot molding, APEC manufactures medical device components and subassemblies. The company operates a 72,000-square-foot manufacturing facility in Baldwin Park and a 35,000-square-foot plant in Shenzhen, China.
APEC is a division of Helix Medical, a medical device manufacturer headquartered in Carpenteria, Calif.
Medline’s New Distribution Center Up, Running in Kentucky
Medline Industries Inc., a privately held manufacturer and distributor of medical supplies, has opened a new state-of-the-art distribution facility in Kentucky. The 400,260 square-foot facility employs 50 people on two shifts and serves healthcare customers in Kentucky, Indiana and parts of Tennessee.
Located in Shepherdsville, Ky., a small town 16 miles south of Kentucky’s largest city (Louisville), the distribution center features 45 receiving dock doors, 45 shipping dock doors and narrow-aisle configuration, maximizing the efficiency of the facility. The building also features a flow-through layout—incoming deliveries are brought in at one end of the facility and outgoing shipments are taken out at the other end.
Besides the flow-through layout and narrow-aisle configuration, Medline’s distribution facility utilizes “green” technology. Motion sensors, for example, have been combined with advanced high-output, energy-saving lighting to keep lights off in aisles that are not in use. In addition, the building’s white ceiling and high-gloss floors maximize the lighting output.
“Our business is steadily growing throughout the country, especially in the south and southeast regions,” said Bill Abington, Medline’s president of operations. “This facility will provide service to our customers who depend on the timely and consistent delivery of our medical supplies to help care for their patients.”
The opening of the Shepherdsville distribution center gives Medline a total of 34 such facilities in the United States, including those in Alaska, Hawaii and Puerto Rico. The company is headquartered in Mundelein, Ill.
Economy Forces GE Healthcare to Cut Jobs
The nation’s sour economy has claimed another victim. GE Healthcare Ltd., which makes imaging equipment, is cutting jobs to reduce costs and ensure its long-term growth.
Company officials did not specify where the job cuts would be or provide an estimate of the number of workers affected. GE Healthcare employs about 46,000 people in 100 countries.
A GE Healthcare spokesman blamed the job cuts on the weak economy and decisions by hospitals to delay purchases of clinical technology and equipment. “We regret the loss of any jobs but in the current economic climate we need to make tough decisions that are prudent and put the safety of the company first,” GE Healthcare spokesman Brian McKaig told the Business Journal of Milwaukee. “We are committed to mitigating these layoffs through redeployment where possible and by providing outplacement support and severance consistent with our local practices.”
GE Healthcare executives expect sales of big-ticket imaging equipment to drop to “mid-single digits percentage points” in the United States this year. Sales of imaging equipment have been dismal as cash-strapped hospitals cut back on capital expenditures. A report published late last year by the American Hospital Association revealed that 45 percent of U.S. hospitals are delaying purchases of large, expensive equipment. The report also found that 39 percent of hospitals were postponing investments in new technology.
Though GE Healthcare executives said they are “anxious” about the U.S. market for imaging equipment sales, they noted that losses in the United States can be offset by stronger sales in other markets. Sales in China, for example, are expected to climb 5 percent to 10 percent this year, while sales in Eastern Europe and Russia would most likely experience double-digit growth, according to company executives.
Volcano Corp. Buys Medical Imaging Component Maker
Volcano Corp. has purchased Axsun Technologies Inc. for $21.5 million in cash. Axsun, based in Boston, Mass., will operate as a Volcano subsidiary.
Axsun, which makes lasers and optical engines used in cardiovascular disease diagnostics, is expected to launch a line of medical imaging systems using its optical coherence tomography (OCT) technology in the first half of this year. Volcano plans to use Axsun’s technology in the development of its own OCT imaging systems.
“We are pleased to merge with a company with the resources and managerial strength of Volcano to help us build on our leadership position in the communications and industrial spectroscopy markets,” Dale Flanders, Axsun president and CEO, said in a news release. “Our capability of precise imaging is delivered with a level of performance and on a scale of miniaturization and at a cost that should enable significant expansion of varied market opportunities in a number of medical specialties.”
Volcano executives said the acquisition of Axsun is key to cementing its position in invasive imaging.
“The Axsun laser and optical engine technology is a key building block in our strategy to cement our already strong position in invasive imaging,” said Scott Huennekens, Volcano’s president and CEO. “The company’s core technologies are truly leading-edge and will advance our programs to both enhance system performance and achieve lower manufacturing costs as we seek to remain the innovation leader in medical imaging. In addition to the known applications in the cardiology and dental fields, Axsun’s technology has the potential to expand OCT applications into a number of new platforms serving large markets in the health care sector, including peripheral vascular, neurovascular, cancer and ophthalmology.”
Based in San Diego, Calif., Volcano makes equipment for diagnosing and treating coronary and peripheral artery disease.
Covidien Decides to Incorporate in Ireland
Covidien Ltd.’s board of directors has voted to move the company’s incorporation to Ireland this year.
According to the Bermuda-based medical device manufacturer, the move would offer “increased strategic flexibility and operational benefits” as it expands overseas. The move is part of a reorganization that will create a newly-formed Irish company called Covidien plc.
“The decision to move to Ireland was made after an extensive analysis of several possible alternatives,” said Richard J. Meelia, Covidien’s chairman, president and CEO. “Assuming shareholder approval, incorporation in Ireland will offer increased strategic flexibility and operational benefits as we continue to expand the rapidly growing international portion of our business.”
The company already has five factories and nearly 2,000 employees in Ireland—a stark contrast to Bermuda, where Covidien has just five workers. As part of the move, the company is planning to add finance and regulatory staffers in Ireland and hold most of its board meetings in the country.
Some of the other factors that influenced Covidien’s decision to move to Ireland include its 30-year presence in the country, the stable economic, legal and regulatory environment there, and its network of tax treaties with the United States, and the European Union, among others. Plus, Ireland has experienced a long history of international investment and has strong relationships as a member of the European Union, executives said.
Despite the decision to move to Ireland though, the company will still be run largely from Mansfield, Mass., where Meelia and other Covidien executives are based. The company employs about 2,000 people in Massachusetts and 42,000 worldwide.
After being spun from Tyco International in 2007, Covidien decided to remain in Bermuda primarily for tax purposes. Executives said they do not expect the move to impact the company’s finances.
Jabil Launches Single-Use Device Outsourcing Business
The economic crisis circling the globe has forced many companies to postpone their plans for launching new business ventures. Some firms, however, are boldly moving forward in an effort to invest in and secure their future.
Jabil is one of those firms. Last month, the medical device manufacturer announced the launch of its single-use device (SUD) outsourcing business, a move executives said was partially triggered by customer requests. “Our customers have been very receptive. Many of them urged us to do this,” said Tony Allan, vice president of global business units for St. Petersburg, Fla.-based Jabil.
Offering customers a full array of global services, including design and development, tooling, molding, assembly, packaging, sterilization management and aftermarket services, Jabil’s SUD business will operate within the company’s Instrumentation & Medical division. About 18 percent of Jabil’s 2008 net revenue of $12.8 billion was generated in this division, company executives said. The new business is expected to increase revenue by $500 million to $1 billion in the next five years, according to Gaet Tyranski, Jabil’s business unit director.
Several factors influenced Jabil’s decision to create the SUD business, including market consolidation and the growing popularity of outsourcing among medical device manufacturers.
“Outsourcing is becoming a growing industry trend because it helps reduce costs, speeds up time to market and allows medical companies to focus on their core competencies,” Allan noted. “We know this [venture] will make us more attractive to new business and will allow us to better respond to the size of the medical device market.”
ISO Certifications
PRIDE Industries, a nonprofit organization based in Roseville, Calif., that provides manufacturing, supply chain management and contract packaging services to businesses, has received ISO 13485:2003 certification. PRIDE CEO Michael Ziegler said the certification will enable his organization to manufacture high-tech medical devices, including diagnostic tools and monitoring devices.
• GE Dynamics, a medical device company specializing in the development of products that treat obesity and metabolic disorders, has received ISO 13485:2003 certification. The six-year-old company is based in Lexington, Mass.
• ISO 13485:2003 certification has been awarded to Lifeclinic International Inc., a Burtonsville, Md.-based supplier of commercial, automated blood pressure monitors and health stations. The company received the certification for the quality management system that is in place at its manufacturing facility in Winchester, Tenn.
• Applied Technical Services Corporation (ATS), an electronics manufacturer based in Everett, Wash., has been granted ISO 13485:2003 certification. ATS executives said the certification, along with its ISO 9001:2000 credentials, will help the company expand in the medical device sector.
• Ultrasonic wound care device developer Arobella Medical LLC has received ISO 13485:2003 certification. Oliver executives said the certification brings its therapy device “one step closer to a wider international marketplace.”
• Bradshaw Medical Inc., a supplier of handheld orthopedic instruments based in Kenosha, Wis., has been awarded ISO 13485:2003 certification for its quality management system.
• ISO 17025:2005 certification has been granted to Nelson Laboratories, a Salt Lake City, Utah-based company that provides testing services to manufacturers in the medical device, pharmaceutical and nutraceutical industries. ISO 17025 is the main standard used by testing and calibration laboratories to design a quality system that improves their ability to produce valid test results.