Originally Published MX March/April 2005
COVER STORY
Filling the Pipeline|
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With increased R&D spending made possible by its successful initial public offering in February 2004, Kinetic Concepts Inc. (KCI; San Antonio, TX) is moving to expand its leadership in the fields of advanced wound care and therapeutic surfaces (see Table I).
|
Revenue/Expense
|
4Q03
($ millions) |
4Q04
($ millions) |
Change
(%) |
FY03
($ millions) |
FY04
($ millions) |
Change
(%) |
| Rentel revenue |
161,346
|
196,659
|
21.9
|
582,801
|
726,783
|
24.7
|
| Sales revenue |
54,568
|
76,996
|
41.1
|
181,035
|
265,853
|
46.9
|
| Total revenue |
215,914
|
273,655
|
26.7
|
763,836
|
992,636
|
30.0
|
| R&D expenses |
7,425
|
9,461
|
27.4
|
23,044
|
31,312
|
35.9
|
| Table I. Revenue and R&D investment at Kinetic Concepts Inc. for the quarters ending December 31, 2003 and 2004 (4Q03, 4Q04), and for the company's fiscal years ending on the same dates. | ||||||
The star of KCI's business in advanced wound-care systems is the company's proprietary Vacuum-Assisted Closure (VAC) technology. The success of the VAC technology—which accounted for just over 70% of the company's revenues in 2004 and nearly all of its meteoric sales growth since 2000—helps to explain why investors have put their dollars behind KCI's future.
The VAC therapy system assists in wound closure by applying localized negative pressure to the surface and margins of the wound. The therapy is applied by means of a special dressing positioned in the wound cavity or over a flap or graft. The pressure-distributing dressing helps remove infectious material and other fluids from the wound. VAC therapy is currently indicated for chronic open wounds, diabetic ulcers, pressure ulcers, acute and traumatic wounds, flaps and grafts, dehisced wounds, and partial thickness burns.
) |
| Figure 1. The VAC Instill system by KCI. (click to enlarge) |
From its original flagship product, KCI has extended its line of VAC-based systems into more-flexible versions such as the VAC Freedom, a portable device suited for home use. The company's most recent addition to the lineup is the VAC Instill system, which combines VAC therapy with Instillation therapy to assist in the irrigation and cleansing of wounds and the removal of infectious materials (see Figure 1). The automated system controls the delivery of topical solutions such as cleansers, antibiotics, antifungals, antiseptics, and anesthetics, thereby improving patient comfort and reducing the time required for manual wound irrigation.
KCI's businesses in therapeutic and bariatric surfaces represent modest, predictable, cash-generating growth. Products include specialty hospital beds, mattress replacement systems, and overlays designed to address complications associated with immobility and obesity, such as pressure sores and pneumonia.
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| Figure 2. KCI's RotoProne therapy system. (click to enlarge) |
KCI's surfaces businesses have also benefited from the company's increased R&D spending. In July 2004 the company released its latest product, the RotoProne therapy system, which fully automates the proning process and offers kinetic therapy in both the supine and prone (face down) positions, helping to prevent and treat acute pulmonary complications associated with immobility (see Figure 2). Placing a patient in the prone position has been shown to improve oxygenation in patients with pulmonary complications and may reduce mortality among high-risk patients.
The RotoProne therapy system makes it easier to place a patient in the prone position and incorporates a tube management system to organize patient lines and tubes. A hand control positioned at the head of the unit enables a single caregiver to rotate the patient while monitoring the patient's lines and tubes. The RotoProne system can help address many of the challenges associated with manual prone positioning, such as caregiver risk-management concerns; tube management; and the labor, time, and costs involved in manually repositioning the patient to prone.
Photos courtesy KCI
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