008 Medtech Executive Profiles008 Medtech Executive Profiles
This year's featured leaders know how to turn market challenges into strategic opportunities.
July 1, 2008
MEDTECH EXECUTIVE PROFILES
As many executives can attest, the old adage "that which does not kill us makes us stronger" extends beyond personal applications and into the business world. Indeed, many of today's most successful medical device firms are ones that have taken potentially lethal market obstacles and transformed them into opportunities.
In this issue, MX profiles company executives who have risen above current market challenges—both financial and regulatory—to drive company growth and lay groundwork for future success. This article highlights top executives whose visions for the future have led to significant financial and technological advances, as well as regulatory leaders who are helping their companies stay abreast of complex and ever-changing requirements. In addition, this year's annual medtech profiles include executives who have recently led their companies through substantial transitions—both from the public market back to private life, and vice versa.
Growth for the Future
Having a vision is one thing. Putting together a plan to achieve such a vision—and then executing on that plan—is quite another. In this section, MX looks at two companies' leaders whose visions for the future have translated into tangible company gains over the past year.
Jim Reid- Anderson
CEO, Healthcare Sector
Member of the Managing Board
In May 2008, Jim Reid-Anderson was appointed a member of the managing board of Siemens AG (Erlangen, Germany) and CEO of the company's healthcare sector. Previously, he served as CEO of Siemens Healthcare Diagnostics from November 2007. Prior to that, he was chairman, president, and CEO of Dade Behring Inc. (Deerfield, IL), which was acquired by Siemens last year.
Reid-Anderson joined Dade Behring in 1996 as executive vice president and CFO and became chief administrative officer and CFO in September 1997. In April 1999, he was promoted to the role of president and COO, and then CEO in September 2000. He was elected as the chairman of the board in October 2002.
As many in industry will attest, Reid-Anderson's achievements while at Dade Behring are nothing short of miraculous. Dade Behring was formed in 1997 through the merger of Dade International and the Behring Diagnostics business unit of Hoechst AG. However, not long after the integration, it became clear that the newly merged firm was overloaded with debt and headed for trouble.
The task of leading Dade Behring through a sea of financial hardships fell to Reid-Anderson. Between November 2000 and October 2002, he initiated a series of strategic personnel moves and structural adjustments, and led the company through a successful financial restructuring that reduced its debt by approximately 50%.
Under Reid-Anderson's leadership, Dade Behring recorded steady increases in revenues and market share, ultimately growing into one of the most successful IVD companies on the market—and an attractive acquisition candidate for Siemens.
Euan S. Thomson
Euan S. Thomson, PhD
President and CEO
Accuray Inc. (Sunnyvale, CA) is a global provider of radiosurgery devices used for applications throughout the body. Founded in 1990, the company develops and markets the CyberKnife robotic radiosurgery system, which extends the benefits of radiosurgery to include extracranial tumors, including those in the spine, lung, prostate, liver, and pancreas. Since its development in 1987, the CyberKnife system has been used to treat more than 35,000 patients worldwide and has been installed in leading hospitals in the Americas, Europe, and Asia.
At the head of Accuray is Euan S. Thomson, PhD, who has served as CEO and a member of the company's board of directors since March 2002. In October 2002, he assumed the additional title of president. During his tenure, the CyberKnife has continued to evolve, taking advantage of new technologies and expanding its use to varied parts of the body.
In early 2007, Accuray announced its initial public offering amid a notoriously challenging IPO environment. Like many medtech companies over the past year, the company has seen its stock price take significant hits. Yet at the same time, Accuray has been consistently achieving noteworthy company milestones and delivering impressive revenue growth.
For fiscal 2007, Accuray reported year-over-year revenue growth of 166%. And although such astronomic growth has tapered off, the company continues to put up impressive figures. For the third quarter of fiscal 2008, Accuray reported total revenue of $58.8 million, a 57% increase over the prior-year period. For all of fiscal 2008, Accuray expects to bring in revenues between $210 million and $230 million, which would represent revenue growth of 50–64% over fiscal 2007.
In the company's most recent quarterly earnings announcement, Thomson said, "Accuray's fifth quarter of record-setting revenue is evidence of continued momentum and worldwide demand for our CyberKnife robotic radiosurgery system. The flexibility of our CyberKnife system is changing the paradigm for cancer treatment, giving physicians the tools to aggressively treat tumors anywhere in the body with pinpoint precision."
Between March 1999 and February 2002, Thomson served during various periods as president, CEO, and a member of the board of directors of Photoelectron Corp., a publicly held medical device company. Prior to joining Photoelectron, Thomson held various positions as a medical physicist within the United Kingdom National Health Service and worked as a consultant for medical device companies, including Varian Oncology Systems and Radionics Inc.
In recent years, private equity firms have shown increased interest in acquiring larger companies with market valuations of $500 million and above. Consequently, some of medtech's most prominent players have recently retired their public registrations and ventured into the private realm. In this section, MX looks at the leaders behind some of medtech's most recent—and most noteworthy—private equity transactions.
Jeffrey R. Binder
Jeffrey R. Binder
President and CEO
Jeffrey R. Binder is president and CEO of Biomet Inc. (Warsaw, IN) and a member of Biomet's board of directors. As a 15-year veteran of the orthopedic device industry—most recently in senior management roles at Abbott Laboratories—Binder's broad-based experience includes general management, marketing, and business development roles with some of the world's most successful orthopedic medical device companies.
Binder entered Biomet amid a number of significant company transitions. Notably, Biomet was in the process of being acquired by a consortium of private equity firms at the same time that top leadership at the company was in flux. "In 2007, I joined a company that had a tremendous track record of success and innovation, but had undergone unprecedented change in the past year—including the retirement of its founder and CEO, Dane Miller, a true visionary in the orthopedics industry," Binder says.
As Binder notes, managing change is always difficult. "At Biomet, the biggest challenge has been to preserve the best aspects of Biomet's culture while making the improvements in operations required to stay ahead of the competition," he says. "To introduce changes while preserving the culture, we worked very hard to communicate the reasons for, and benefits of, the changes we were making, and to recruit managers who understood and bought into the strong cultural heritage that has defined Biomet's success. It was very important that we not turn into a stuffy big corporation, and that team members continued to be excited and confident about our future direction. We continue to work hard to strike the proper balance between preserving our cultural heritage and making needed changes."
Binder notes that he is especially proud that Biomet has managed to accelerate its top-line growth despite the vast changes it has undergone in recent years. "Our performance this past year is a real tribute to the strength and dedication of our team," Binder says.
Binder served as senior vice president of diagnostic operations at Abbott Laboratories from January 2006 until his appointment at Biomet in February 2007. He previously served as president of Abbott Spine from June 2003, and president and CEO of Spinal Concepts from 2000 until June 2003, when Spinal Concepts was acquired by Abbott Laboratories.
Prior to Spinal Concepts, Binder was president of DePuy Orthopedics' joint reconstruction and trauma business following its integration with Johnson & Johnson Inc. in 1998. He also spent four years in various senior positions at Howmedica Orthopedics and five years with the Boston Consulting Group.
DJO Inc. (formerly DJ Orthopedics)
In mid 2007, DJO Inc. (formerly DJ Orthopedics; Vista, CA) announced that it would be acquired by privately held ReAble Therapeutics for approximately $1.6 billion. An affiliate of the Blackstone Group—the controlling shareholder of ReAble—committed to provide the equity financing needed by ReAble to complete the transaction.
Immediately following the completion of the company's merger, Les Cross became CEO and a member of the board of directors of the newly merged DJO. Prior to the merger, he was CEO, president, and a member of the board of directors of the standalone DJO Inc.
In announcing the company's fiscal 2007 earnings this past spring, Cross said the company was optimistic about the significant cost reductions that should be achieved from the merging of the two companies. "The merger of ReAble and DJO has created one of the largest orthopedic and rehabilitation companies in the world, with leading market shares in many product categories," Cross added. "As our sales initiatives gain traction in 2008, we expect our full year net sales to approach $1 billion."
Cross served as CEO and a manager of DonJoy LLC from June 1999 until November 2001, and served as president of DJO LLC—or its predecessor, the bracing and support systems division of Smith & Nephew Inc.—since June 1995. From 1990 to 1994, Cross held the position of senior vice president of marketing and business development of the bracing and support systems division of Smith & Nephew. He was also a managing director of two different divisions of Smith & Nephew from 1982 to 1990, prior to which he worked at American Hospital Supply Corp.
Gerald M. Ostrov
Gerald M. Ostrov
Chairman and CEO
Bausch & Lomb Inc.
In January of this year, Bausch & Lomb Inc. (B&L; Rochester, NY) appointed Gerald M. Ostrov as chairman and CEO. At the time of Ostrov's appointment, the company reported that Bausch & Lomb chairman and CEO Ronald L. Zarrella would retire in March and continue to serve as chairman emeritus.
Prior to his current appointment, Ostrov was company group chairman of worldwide vision care at Johnson & Johnson Inc. (New Brunswick, NJ), where he led the company's global vision care businesses from 1998 to 2006. He first joined Johnson & Johnson in 1976, before leaving for Ciba-Geigy AG in 1982. He was named president of Ciba Consumer Pharmaceuticals in 1985. In 1991, he returned to Johnson & Johnson as president of its personal products business, and then became company group chairman for its North American consumer and personal care businesses.
Ostrov's appointment to the helm of Bausch & Lomb came just months after private equity firm Warburg Pincus completed its $4.5 billion acquisition of Bausch & Lomb—a move that Ostrov says has positioned the company for robust long-term growth.
"Managing expectations for dramatic growth on a short-term, quarter-to-quarter basis is tough," says Ostrov. "It's artificial. That's what many of our publicly traded competitors have to face. Alongside our private equity partner, Warburg Pincus, we're managing Bausch & Lomb for long-term growth and value creation, measured in years, not months. It's a unique opportunity.
"The greatest challenge I've faced since joining Bausch & Lomb is reaching out to a vast global workforce to help them understand the unique opportunities of being a newly private company, and to help them embrace change in a very positive way," Ostrov adds. "Our employees have overcome a number of challenges in recent years. Now, we have new ownership, new leadership, and new organizational structures all coming at once. However, employee reaction has been very positive as we empower them with the resources to succeed and grow the company."
It's no secret that the current turbulence of today's financial marketplace has made it an inhospitable environment for companies looking to execute an initial public offering. Yet there have been exceptions. In this section, MX looks at financial leaders who have recently—and successfully—navigated the daunting path to the public market.
BioMimetic Therapeutics Inc.
In May 2006, combination product developer BioMimetic Therapeutics Inc. (Franklin, TN) announced that it had priced its initial public offering of common stock at $8 per share. A year later, that stock price had grown more than 130%.
Leading the company's IPO was Larry Bullock, who joined BioMimetic Therapeutics as CFO in January 2004.
From January 1996 to February 2003, Bullock served as CFO of Ribozyme Pharmaceuticals Inc., now called Sirna Pharmaceuticals Inc., and as CFO of La Jolla Pharmaceuticals for five years prior to joining Sirna.
Bullock led both companies through their private-to-public transitions, completing private and initial public offerings and building public reporting teams.
Bullock continues to oversee the financial health of BioMimetic Therapeutics in today's often-turbulent marketplace. At press time, BioMimetic Therapeutics' stock price of $12 represented a 50% increase over its issue price of $8 in May 2006. Although the $12 figure represented a marked decline from its previous high of more than $18, it also represented a noteworthy rebound from an alarming stock price plummet this past March. In a single day, the price fell from $15.18 to $6.35 upon news of FDA's ongoing safety review of Regranex, a Johnson & Johnson product. Both Regranex and BioMimetic's GEM OS1 contain recombinant human platelet-derived growth factor (rhPDGF-BB; becaplermin) as the active ingredient.
BioMimetic later announced that the agency issued a letter to BioMimetic confirming that its U.S. GEM OS1 pivotal study for the treatment of foot and ankle fusions should continue as designed and that FDA has taken no action to change the study status. Following the announcement, the company's stock price has again seen steady growth.
Mark P. de Raad
Mark P. de Raad
Executive Vice President and CFO
Mark P. de Raad has served as executive vice president and CFO of Masimo Corp. (Irvine, CA) since June 2006. In his role, de Raad is responsible for the company's worldwide financial operations, including accounting, reporting, financial planning and analysis, tax, treasury, insurance, general control and compliance activities, and investor relations. In August 2007, he successfully steered Masimo's transformation from a private corporation to a publicly held medical technology company trading on the Nasdaq exchange. Some analysts have referred to the company's public launch as one of the most successful medtech IPO debuts in history. At press time—while other recent medtech IPOs' stock prices floundered—Masimo's stock price had increased by more than 100% over its issue price in August 2007.
De Raad's role as project leader involved concurrently managing a variety of internal and external projects involving the drafting of the original S-1 and management of subsequent SEC comment rounds. "Other efforts included working with our analysts to improve their understanding of the financial model, as well as preparing for our road show activities and related presentations," de Raad says. "I must admit that the actual 13-day international road show was the greatest marathon I have ever experienced." During the 13-day, worldwide IPO road show, Masimo touched more than 160 investor groups, de Raad says.
As a CFO, de Raad says the greatest challenges arise from unexpected surprises, delays, or other issues that companies do not—and in most cases, cannot—anticipate. "Some elements, such as the SEC review process and the overall market conditions, are examples of items that we could not control," he says. De Raad says that although SEC was able to turn the company's initial S-1 quickly, the high volume of filings that the organization was managing resulted in unexpected delays to Masimo's original timeline and target effective dates.
Also, de Raad says that just as Masimo began its road show, the financial markets became extremely volatile. During most of the company's 13-day road show, the Dow Jones industrial average on a daily basis was up or down—mostly down—by 200, 300, and sometimes even 400 points. "It was a three-week roller coaster that we had no control over," he says. "In fact, even on our first day of trading, in which we traded up by 23%, the Dow Jones industrial average was down by about 300 points."
Prior to joining Masimo, de Raad served as vice president, CFO, and secretary for Avamar Technologies Inc., a start-up enterprise software development company, from November 2002 through May 2006. Other notable positions de Raad has previously held include vice president of finance and CFO for ATL Products Inc., a manufacturer of automated tape libraries, from September 1997 through November 2002. He also worked at AST Research Inc., a personal computer manufacturer, where he held various financial management positions during his tenure from May 1987 to May 1997, the last of which was vice president of finance, treasurer, and chief accounting officer. De Raad is a certified public accountant and holds a BS in accounting from the University of Santa Clara.
In the heavily regulated medical device arena, regulatory requirements guide the actions of medical device companies in every stage of product development and commercialization. In this section, MX profiles company leaders who are helping their companies and their products stay on the straight and narrow path both to and while on the market.
Michael D. Willingham
Michael D. Willingham
Senior Director of Quality and Regulatory
Philips Ultrasound, a unit of Philips Healthcare
Michael D. Willingham is senior director of quality and regulatory for the ultrasound business of Philips Healthcare (Andover, MA). Prior to joining Philips in 2006, he spent 23 years with Medtronic Physio-Control (Redmond, WA), where he held positions as the vice president of international business operations and vice president of quality and regulatory.
Willingham started his career as an electrical engineer. He chaired the Association for the Advancement of Medical Instrumentation (AAMI) standards committees for defibrillators and electromagnetic compatibility (EMC), as well as the IEC 601 standard working group for defibrillators.
Over the past year, Willingham says his greatest professional achievement has been leading a Philips work group that is chartered to optimize the company's process for obtaining new regulatory approvals in the People's Republic of China. "It's a fascinating and dynamic market, with critical importance to our business growth in emerging markets," he says.
Although the United States still represents the world's largest healthcare market, most medical device companies are finding that key markets in Asia, Europe, and Latin America are critical to their long-term business growth strategy, Willingham notes. "There has been substantial effort to harmonize the international medical device regulatory schemes, but many countries still maintain unique requirements and approval processes," he says. "Many of the emerging market countries have developed new medical device regulations where little, if any, existed previously. Regulatory professionals must stay abreast of the most current information in order to accurately plan submissions and forecast approvals."
Vice President of Clinical and Regulatory Affairs
Andy Balo is vice president of clinical and regulatory affairs at DexCom Inc. (San Diego), a position in which he oversees all of DexCom's clinical trials, statistical analysis, and regulatory submissions. Balo serves as the industry representative on several FDA panels, including the agency's cardiovascular, neurological, and gastrointestinal panels.
Balo has been instrumental in bringing several important medical devices to market and has gained approval for more than 30 PMAs and PMA supplements.
Over the past year, Balo says his proudest professional accomplishment has been the role he played in building a cross-functional team to develop process systems and clinical trial designs that resulted in accelerated product approvals for a novel continuous glucose monitoring technology.
In bringing improved technology to market, medtech companies face significant regulatory hurdles. In Balo's opinion, the greatest regulatory challenge facing device companies today is the question of how to handle desired changes associated with products and the requirements for notifying FDA.
"FDA's current guidance suggests assessing how the change would 'impact safety and effectiveness' of the device, and that should determine whether FDA should be notified or a new submission required," Balo says. "This guidance is very broad, and at times it is difficult to tailor the agency's examples to a given company's own product."
Prior to joining DexCom, Balo held positions as vice president for regulatory and clinical affairs with Innercool Therapies and Endocardial Solutions. During the 1990s, Balo held several positions at St. Jude Medical, including vice president of regulatory, clinical, and technical services. He also served as corporate vice president of quality, regulatory, and clinical affairs and was an officer of the company.
Copyright ©2007 MX
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