2006 Medtech Executive Profiles 4051

Originally Published MX July/August 2006

EXECUTIVE PROFILES

Featured executives illustrate medtech's skill at building and operating strong companies in a complex global marketplace.

Lori Luechtefeld and Art Kerley

Whether shaping an early-stage company or steering a multi-billion-dollar operation, medical technology executives have one thing in common: vision. From harnessing a new technology to orchestrating the acquisition of an emerging company, medtech executives are constantly evaluating the industry landscape and guiding their companies accordingly.

Whatever their company's size, many medtech executives make significant contributions to advancing industry goals and improving the delivery of healthcare to patients. In this issue, MX profiles company executives whose ideas and energies are making a difference in their own companies and in other areas of industry concern. This article highlights the top-level executives behind some of industry's biggest moves over the past year, as well as other executives who are operating and succeeding outside of the limelight.

Big Deals

The medical device industry has long been characterized by its penchant for mergers and acquisitions. This past year was no exception. Medtech executives in varied sectors executed some of the most impressive deals in the medical device industry's history, effectively altering the competitive landscape for years to come. While some mergers provide companies with a means to grow and expand their established market positions, others enable firms to enter new, yet complementary sectors of the medical device industry. In this section, MX looks at four recent deals—with a combined valuation of more than $40 billion—and the medtech executives who brought them from concept to reality.

James R. Tobin
President and CEO
Boston Scientific Corp.

James M Cornelius
Chairman and CEO
Guiidant Corp.

In both size and prominence, the $27 billion acquisition of Guidant Corp. (Indianapolis) by Boston Scientific Corp. (Natick, MA) tops the list of mergers that the medical device industry has witnessed in the past 12 months. The stage was set in December 2004 by a $24 billion offer from Johnson & Johnson Inc. (J&J; New Brunswick, NJ), headed by chairman and CEO William C. Weldon.

In December 2005, Boston Scientific surprised industry observers with a bid for Guidant that not only topped that of J&J, but exceeded its own market cap. The next several weeks erupted into a bidding war between J&J and Boston Scientific. When the dust finally settled in the closing days of January 2006, Boston Scientific had secured Guidant's highly prized cardiac rhythm management business and, in so doing, became the world's largest manufacturer of cardiovascular devices.

Throughout the ordeal, Boston Scientific president and CEO James R. Tobin remained upbeat and confident in his company's ultimate success. When the deal was finally sealed, Tobin dismissed the many naysayers concerned about the damaged Guidant brand. He immediately forecast 12% annual growth for the combined company over the next five years. "The more we see, the better we like it, and the more opportunity we think we have," said Tobin.

Representing Guidant in the closing months of the transaction was James M. Cornelius, who stepped into the role of chairman and CEO following the retirement of long-time Guidant leader Ron Dollens. Cornelius left Guidant after the merger was finalized. He plans to "harvest and recycle his cash proceeds" from the Guidant deal into new Indiana investment opportunities through the Twilight Venture Partners investment firm.

Erich R. Reinhardt
President and CEO
Siemens Medical Solutions

Michael Ziering
CEO
Diagnostic Products Corp.

In late April, Siemens AG (Erlangen, Germany) agreed to the $1.86 billion purchase of Diagnostic Products Corp. (DPC; Los Angeles), thereby launching its medical unit, Siemens Medical Solutions (Malvern, PA), into the in vitro diagnostics market.

"The potential is huge to drive groundbreaking innovations by combining DPC's in vitro diagnostics leadership with Siemens' leading position in medical imaging and healthcare information technology solutions," said Erich R. Reinhardt, president and CEO of Siemens Medical Solutions.

Reinhardt's career with Siemens AG spans more than two decades. He began with the company in 1983 as the head of applications development in magnetic resonance.

On the other side of the merger is Michael Ziering, who has served as CEO of DPC since 1999. He joined the company in 1986 as legal counsel.

Daniel J. Starks
Chairman, President, and CEO
St. Jude Medical Inc.

Chris Chavez
President and CEO
Advanced Neuromodulation Systems Inc.

In a $1.3 billion deal, St. Jude Medical Inc. (St. Paul, MN) acquired Advanced Neuromodulation Systems Inc. (ANS; Plano, TX) late last year. Now a new division of St. Jude Medical, ANS is a leader in the neuromodulation device market and reportedly holds the number two market spot in the spinal cord stimulation segment.

The merger brought together the strengths of Daniel J. Starks, St. Jude Medical's chairman, president, and CEO, and Chris Chavez, president and CEO of ANS, who remains with the combined company.

Starks was named chairman, president, and CEO of St. Jude Medical in May 2004 and has served as a member of the St. Jude Medical board of directors since May 1996. He was president and COO of the company from January 2001 to May 2004 and was previously president and CEO of the company's cardiac rhythm management business, beginning in April 1998.

Chavez, who has extensive leadership experience and has served with several Fortune 500 companies in the medical device industry, joined ANS as president, CEO, and director in April 1998.

Marijn E. Dekkers
President and CEO
Thermo Electron Corp.

Paul M. Montrone
Chairman and CEO
Fisher Scientific International

In May, Thermo Electron Corp. (Waltham, MA) and Fisher Scientific International Inc. (Hampton, NH) announced that both companies' boards had unanimously approved a definitive merger agreement. Under the agreement, which is valued at more than $10 billion, the two firms will join to form Thermo FisherScientific Inc., a leading provider of laboratory products and services expected to achieve revenues of more than $9 billion in 2007.

At the forefront of the deal is Thermo Electron president and CEO Marijn E. Dekkers, who, following the merger, will become president and CEO of the combined company. Dekkers, who joined Thermo as COO in July 2000, was named CEO of Thermo in November 2002. During his time as COO, he was responsible for leading the operational integration of the company, which underwent a major reorganization beginning in January 2000.

At the helm of Fisher going into the merger is chairman and CEO Paul M. Montrone, who plans to step aside at the culmination of the deal. According to the companies, he will be "concentrating on launching new business opportunities." However, he will remain an adviser to the newly formed firm.

Montrone has been CEO of Fisher since 1991 and chairman since 1998. Under Montrone's leadership, Fisher has been transformed from a North American manufacturer and distributor into a global enterprise serving approximately 145 countries on six continents.

Big Money for New Ideas

It takes more than a great idea and an entrepreneurial spirit to bring innovative medical devices to market; it takes a good deal of cash as well. The two executives in this section have recognized this need and responded by raising impressive sums of capital. Now, with fresh financial infusions and optimistic investors working in their favor, these leaders are ready to capitalize on the market potential at their companies' cores.

Glen French
CEO
Asthmatx Inc.

In late 2005, Asthmatx Inc. (Mountain View, CA) reported that it had raised $27 million in a third round of venture funding. Glen French, CEO of Asthmatx, has wasted no time in putting the sum to work on a wave of clinical trials, leading up to an anticipated product launch in 2008.

Asthmatx has developed the Alair system to perform an investigational outpatient procedure called bronchial thermoplasty. According to Asthmatx, the early results of three clinical studies suggest the procedure may offer significant benefits to patients with asthma.

"Later this year, we anticipate announcing positive results from another study of bronchial thermoplasty in patients with very severe asthma, and our fourth study, an FDA-approved IDE pivotal study, is already well under way at roughly 40 top-tier medical centers around the world," French says.

Anthony G. Viscogliosi
Founder, CEO, and Chairman
Small Bone Innovations Inc.

Less than a year after its debut at the American Academy of Orthopaedic Surgeons annual convention in February 2005, Small Bone Innovations (SBI; New York City) announced that it had received a fresh infusion of $42.2 million in second-round financing—the largest-ever investment of venture capital in the orthopedics sector, according to Venture Source, a business unit of Dow Jones & Company, Inc.

According to Anthony G. Viscogliosi, founder, CEO, and chairman of SBI, the company focuses on the largely untapped and ever-increasing potential of the small-bone surgery sector. With solid financial backing behind it, the company is now poised to capitalize on its broad portfolio of FDA-approved implants.

"The large orthopedic firms do not see the small-bones market as large enough yet to stake out a major presence," Viscogliosi says. "We fully expect to become the market leader—and an attractive target to be gobbled up by one of the big orthopedic firms."

Founding Execs

Getting a medical device enterprise off the ground is no small task. If and when a company grows wings of its own and achieves commercial succes, it's not a surprise that many founding executives welcome the opportunity to hand over the reins of their company's day-to-day operations to another qualified leader. However, there are those founders who choose to remain at the helm and guide their companies for years—and sometimes decades—to come. In this sections, MX recognizes three executives who continue to lead the successful medical device firms that they helped to form.

John B. Simpson,
PhD, MD
Founder and CEO
FoxHollow Technologies Inc.

As a clinician and entrepreneur with a record of founding successful medical device companies, John B. Simpson, PhD, MD, founder and CEO of FoxHollow Technologies Inc. (Redwood City, CA), knows a thing or two about getting a medtech operation up and running. Since the company's initial public offering in 2004, FoxHollow's revenues have more than tripled.

In addition to FoxHollow, Simpson is the founder of Advanced Cardiovascular Systems Inc., which was acquired by Eli Lilly and Co. in 1984 for $125 million and was later spun out as Guidant Corp. He also founded Devices for Vascular Intervention Inc., which was acquired in 1990 by Lilly-Guidant for $115 million. More recently Simpson was the founder and chairman of Perclose Inc., which went public in 1995 and was acquired in 1999 for $680 million by Abbott Laboratories.

Kim D. Blickenstaff
Chairman, CEO,
and Cofounder
Biosite Inc.

Over the past 18 years, Kim D. Blickenstaff has built Biosite Inc. (San Diego) from a start-up company of four employees to a public company with more than $280 million in annual revenues and more than 1000 employees.

In addition to the company's growth last year, Blickenstaff orchestrated and executed a complete company move to a new 400,000-sq-ft facility in San Diego. Built on 30 acres of property, Blickenstaff says the new location will allow Biosite to triple in size without outgrowing its amenities.

This year, Blickenstaff expects his company will again achieve solid double-digit growth while expanding its presence in Europe and bolstering its product portfolio.

Karen D. Talmadge, PhD
Chief Science Officer and Cofounder
Kyphon Inc.

Since cofounding and funding Kyphon Inc. (Sunnyvale, CA) in 1994, Karen Talmadge, PhD, has played an integral role in growing the company to its current stature.

Currently chief science officer of the company, Talmadge has served as a member of its board of directors since the company's inception. She assumed the CSO role in 2003 and has been executive vice president of the company since 1998. During Kyphon's start-up period between 1994 and 1998, Talmadge served as president, CEO, and treasurer.

Beyond her role at Kyphon, Talmadge says her greatest challenge over the past year has been fulfilling the demands of the four additional boards of directors on which she serves. These include the boards of two start-up medical device companies, Cartilix Inc. and VeraLight Inc.; the angel investing group Life Science Angels LLC; and the American Diabetes Association.

Women on the Rise

The medical device industry is far from the man's world it once was. Today, women executives are leading the charge at a number of medical device firms, from start-ups to major corporations. The following two profiles highlight two women who have emerged at the forefront of two of the hottest and fastest-developing areas of medical technology: information technologies (IT) and women's health.

Janet Dillione
President
Healthcare Information Technology
Siemens Medical Solutions USA

With more than 20 years of experience in the healthcare IT industry, Janet Dillione is part of a senior executive team responsible for ensuring that the global healthcare IT offerings of Siemens Medical Solutions USA (Malvern, PA) enable the company's customers to achieve optimal results in patient safety, operational efficiency, and clinical outcomes. She assumed her current position on July 1, when she succeeded Tom Miller as president of Siemens' healthcare IT division. She had served as COO of the division since 2005.

As COO of the division, Dillione helped to establish a new senior management model and governance structure. "The model has fostered tightly coupled business teams and new levels of collaboration across our organization," she says.

A frequent speaker at industry forums, a member of the advisory board for the Healthcare Information and Management Systems Society (HIMSS), and HIMSS fellow, Dillione passionately espouses the need for technology to support the local delivery of healthcare. She says her greatest challenge over the past year has been establishing internal processes and business practices that can support the increasing globalization of Siemens' clinical health IT portfolio and its expansion into new markets. "We're handling the challenge by deploying the right people to help achieve greater customer intimacy globally, while gaining in-depth market insight in order to deliver products that meet and exceed customer need worldwide," she says.

Christina Anné
Global Business Unit Leader
Women's Health
Cook Group Inc.

In early May, Cook Group Inc. (Bloomington, IN) formally unveiled its new women's health business unit, devoted solely to the development and marketing of medical devices for the female patient. The genesis of the new division falls in line with a broader industry trend, in which companies in a variety of sectors are placing increased emphasis on meeting women's unique needs.

Heading up the new Cook division is Christina Anné, who joined the company in 1990 and has held a variety of roles within the company over the past 16 years. Anné began her career with Cook as a district manager selling the company's portfolio of assisted reproductive technology and gynecology products in Belgium, the Netherlands, and Luxembourg. After four years, she was promoted to European manager. Then, in 1998 she was promoted to manager for all Eastern Europe, the Middle East, and Africa. She was appointed head of the women's health unit in 2004.

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