Kinetic Concepts Medical Device Company Intelligence Report

Summary

Medical Device Company Intelligence Reports provide a full review of the company's activities, from its origins to its latest corporate activity, including mergers and acquisitions, agreements, divestitures, major purchasing contracts and litigation. Sections are included on products, international activities and R&D, as well as a full, in-depth five year financial analysis. An introduction to each report and a full table of contents is provided for review. More than 60 Medical Device Company Intelligence Reports are currently available.

Founded in 1976, Kinetic Concepts, Inc (KCI) is a global medical technology company with leadership positions in its two core businesses - advanced woundcare and therapeutic surfaces. KCI's advanced woundcare systems incorporate the company's proprietary V.A.C. technology which KCI claims has been clinically demonstrated to help promote wound healing and can help reduce the cost of treating patients with serious wounds. The company's second product line, therapeutic surfaces, includes specialty hospital beds, mattress replacement systems and overlays which are designed to address pulmonary complications associated with immobility and prevent skin breakdown. KCI's products are used in a variety of healthcare settings, including acute care hospitals, extended care facilities and patients' homes, both in the US and international markets. With revenue of US$1.61 billion in fiscal 2007, KCI is the overall market leader in the advanced woundcare market. For the last several years, KCI's growth has been primarily driven by increased revenue from its V.A.C. Therapy systems which utilise negative pressure wound therapy (NPWT) to treat a variety of wounds. In fiscal 2007, V.A.C. revenue rose by 19.8% to US$1.30 billion, accounting for 79.5% of total revenue, compared with 77.9% and 75.1% in 2006 and 2005, respectively.

In April 2008, KCI added a third major product platform to its business when it acquired LifeCell Corporation, a developer, processor and marketer of biological soft tissue repair products made from human and animal tissue. Surgeons use LifeCell's products to restore structure, function and physiology in a variety of reconstructive, orthopaedic and urogynecologic surgical procedures. With revenue of US$190.5 million and growth of 35% in fiscal 2007, LifeCell provides additional long-term growth opportunities for KCI, while delivering sustained value to its shareholders. KCI believes this combination allows it to accelerate its strategy to increase its presence in the operating room. By capitalising on LifeCell's strong relationships with acute care operating physicians, KCI believes it will have a platform upon which to launch its next-generation negative pressure-based products for the surgery suite. The addition of an extra growth platform may be an important move for KCI as the NPWT market from which the company currently obtains the vast majority of its revenue is rapidly evolving. While KCI is the dominant market leader with an estimated 90% market share at present, several new competitors are beginning to emerge with lower-priced products which threaten to challenge KCI's monopoly of the sector. Last year, a US federal judge ruled that KCI's rival BlueSky Medical did not infringe on its V.A.C. patents, prompting Smith & Nephew to move in and buy BlueSky. Since then, S&N has been awarded a contract with Universal Hospital Services to provide its NPWT products (EZCARE and VISTA) in the US acute care and long-term market. Another rival, Innovative Therapies Inc (a company founded by former KCI employees) has launched its own NPWT product, the Svedman Wound Treatment System which is very similar to KCI's system, but is cheaper.

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