Kinetic Concepts Inc.: Vacuum Therapy Heads East

Nov. 5, 2009
Company gains approval to market successful treatment in Japan

An innovative wound-healing therapy known as vacuum-assisted closure will make its way to Japan thanks to Kinetic Concepts Inc.

The country's Ministry of Health, Labor and Welfare granted the medical technology company final regulatory approval to sell its VAC Therapy System in Japan, KCI said on Nov. 2.

VAC Therapy promotes wound healing by delivering negative pressure (a vacuum) at the wound site through a dressing that helps draw wound edges together, remove infectious materials and actively promote granulation at the cellular level. The company says the therapy has helped heal more than 3 million wounds worldwide.

The move into Japan should help the company expand the technology, which showed flat growth in the third quarter. Worldwide revenue from VAC products was $360.6 million in the period ended Sept. 30, up slightly from $360.3 million posted in the year-ago period.

The company attributed the slow growth to unfavorable foreign currency exchange rates and lower unit prices.

Kinetic Concepts Inc.
At A Glance

Kinetic Concepts Inc.
San Antonio, Texas
Primary Industry: Medical Instruments & Equipment
Number of Employees: 6,900
2008 In Review
Revenue: $1.88 billion
Profit Margin: 9.26%
Sales Turnover: 0.63
Inventory Turnover: 11.84
Revenue Growth: 16.44%
Return On Assets: 16.44%
Return On Equity: 25.69%
The same conditions also impacted overall results. Net earnings for the quarter were $64.6 million, or 91 cents per share, compared with $53.9 million, or 75 cents a share, in the year-ago period. Revenue reached $504.4 million, compared with $503.3 million last year.

"In the third quarter we delivered revenue and earnings growth despite the impact of ongoing competitive and economic pressures," said Catherine Burzik, president and CEO of KCI, in an Oct. 21 earnings statement. "We also made progress in the quarter on several key strategic initiatives."

Some of those initiatives included the company's initial regulatory approval to sell VAC in Japan, the launch of its open abdominal therapy system ABThera and its expanded manufacturing capabilities in Ireland, Burzik said.

The company announced in May that it received clearance from the U.S. Food and Drug Administration to market its ABThera system for open abdominal wounds.

ABThera negative pressure therapy system is designed to improve therapy in managing the open abdomen by actively removing fluids and infectious material and reducing interstitial edema.

Shares of KCI fell 1.8% in afternoon trading on Nov. 4 to $33.24.

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