AngioDynamics (Latham, NY) is hoping Smith & Nephew’s loss will be its gain. In mid-August, the maker of minimally invasive medical devices for vascular access, surgery, peripheral vascular disease, and oncology, tapped Joe DeVivo, former global president of Smith & Nephew Orthopedics, as its new CEO. DeVivo left Smith & Nephew after the company announced in July that it would combine its orthopedic and endoscopy divisions. He is also the former president and CEO of RITA Medical Systems, which AngioDynamics acquired in 2006.
“Joe has been our top choice since we began our search,” Vincent Bucci, AngioDynamics chairman, said in a statement. “Smith & Nephew recently reported that its [o]rthopedic business had the fastest growing rate of all its business segments again during its most recent quarter while continuing to drive share. We are thrilled to have recruited the architect of this growth.”
DeVivo takes the reins this month and inherits a company that faces challenges and shows promise. For the fiscal year 2011, which ended May 31 for the company, sales were flat and profits were down a third. Starting January 1, AngioDynamics will no longer distribute in the United States its LC Beads embolization product, which accounted for about 13% of net sales through the first three quarters of fiscal year 2011.
But when one door closes, another opens. For AngioDynamics, that door is the NanoKnife System, which interim CEO Scott Solano called the company’s “fastest-growing product line and single largest growth opportunity” during a July conference call. FDA has approved NanoKnife for surgical ablation of soft tissue, though not for treating a specific disease or condition. However, in May AngioDynamics received IDE approval to conduct clinical trials of the NanoKnife’s ability to treat prostate cancer. It has also applied for IDE approval to conduct clinical trials for using the device to treat pancreatic cancer. By mid-July, close to 700 patients had been treated with the system, and seven new commercial sales accounts were added in the fourth quarter of fiscal year 2011. Sales of the NanoKnife were up 170% over the same period in 2010.
The company’s own predictions of 0–4% sales growth for 2012 are modest, but Wall Street seems optimistic about its future. Analysts responded favorably to both AngioDynamics’ 2011 earnings report (after which investment research firm Canaccord Genuity upgraded its stock to “buy”) and its CEO choice. Investing information site The Motley Fool reported that last year brought rumors of a Johnson & Johnson or Covidien takeover of AngioDynamics. This year, AngioDynamics could be gobbling up companies. In an interview with The Business Review after his hiring, DeVivo said he looks forward to growing the company through “smart acquisitions.”