67 WALL STREET, New York - March 19, 2012 - The Wall Street Transcript has just published its Medical Devices Report offering a timely review of the sector to serious investors and industry executives. This 51 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Stable Utilization and Personal Health Expenditures - Continued Pricing Pressure - Medical Device Excise Tax - Multinational Penetration in Emerging Markets
Companies include: Cardinal Health (CAH); Positron Corporation (POSC); Abiomed (ABMD); ArthroCare (ARTC); Baxter (BAX); and many more.
In the following brief excerpt from the Medical Devices Report, expert analysts discuss the outlook for the sector and for investors.
James B. Hawkins has served as Chief Executive Officer, and as a Member of the board of directors, since joining Natus Medical Incorporated in April 2004, and formerly, as President from April 2004 to January 2011. Before joining Natus, Mr. Hawkins was President, CEO and a Director of Invivo Corporation, a developer and manufacturer of vital sign monitoring equipment, and its predecessor, from August 1985 to January 2004. He also served as Secretary of Invivo from July 1986 to January 2004. He earned his undergraduate degree in business commerce from Santa Clara University and holds an MBA from San Francisco State University.
TWST: Mr. Hawkins, let's begin with a brief overview of Natus Medical. How did it start? How has it evolved? Where is it today?
Mr. Hawkins: Sure. Natus started back in the, let's say, early 1990s as a hearing screening company for newborns. They had a technology that could test babies for hearing before they left the hospital. They got the patents on that technology, brought it to market, but maybe more importantly over - during the 1990s made it where states, and even the federal government, made it become a standard of care because it was so compelling to do a hearing test on newborn babies to have not only cost savings but just really for the lifestyle of the family and the babies to be able to live normal lives. They were able to get that to be a standard of care. It really then blossomed starting in 2000, where now we think in the United States probably 95%, 98% of the babies have hearing testing before they leave the hospital, and then around the developed world now, we're probably up to 35%, 40%. And Natus, as they were doing this, was never really a profitable company trying to introduce a new technology into a new market. In about 2004, we were able to then change the model and focus on profitability and growth, not just trying to establish the market, and we were successful in doing that. And then from there branched into other newborn areas, where now we think we probably have the number one diverse product line going into the newborn nursery and the neonatal intensive care unit, and then since have branched out into neurology. We're one of the leading neurology companies now doing EEG, EMG and PSG, which is sleep diagnostics for sleep apnea.
TWST: Let's talk about the descriptive statistics for neurodiagnostic and newborn care. How big is this market? How fast is it growing?
Mr. Hawkins: For newborn care, it's a real interesting question. In the United States, it's sort of a flat market right now because of the headwinds being the birth rate. In the difficult economic times, birth rates are down, we think, about 10% from the peaks in 2008. And so that's created a little bit of a headwind, but it's also happened in the past. And as the economy picks up, we think it will certainly snap back. It's a little harder to know the numbers around the rest of the world, but we hear Europe birth rates are down too. Asia we're not sure about, but Asia really isn't the big user overall outside of Japan, Australia, Singapore and Hong Kong. They're not big users of hearing screening. So in the China market, the Indian market, Thailand, those kinds of places, we're just scratching that surface right now. Big opportunity down the road, but to date, maybe 1% or 2% of our sales.
TWST: Would you talk about the diversity of your product line?
Mr. Hawkins: Yes, certainly. We've been innovators. Our business model overall has been to buy technologies or products once they're introduced or will be introduced very soon. It's very difficult to develop products from scratch. When you look at the history of the venture capitalists and the money they've put into medical devices and product development, overall, it hasn't been a good bet I would say overall. So our strategy is to have internal growth. But then as companies come out and they introduce products, they might not have the sales channels, certainly both domestic and international, and then we're able to come in and buy those products from companies and then take them to the next level.
The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 51 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
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