4. Decline in Demand

Brian Buntz

March 9, 2016

1 Min Read
4. Decline in Demand

4. Decline in Demand

"Decline in product demand is more of an issue for companies with product concentration," observes Kaplan, who cites companies like  Zest Anchors (see S&P summary from April 2015 above) and Kinetic Concepts as examples of how product concentration can hurt credit scores.

It is rare for new medical products to rapidly gain market share. For that reason, many healthcare companies have time to adapt to market changes.

Occasionally, however, a new medical product is adopted so quickly that it can spell the demise for healthcare companies. Such was the case for Imagyn Medical Technologies Inc., a maker of surgical products for treating impotence and gynecological conditions. After the launch of Viagra, the company found itself in financial dire straits and three of its creditors ultimately forced the company into bankruptcy in 1999. 

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