Medical Device Link.

Originally Published MX July/August 2005

EXECUTIVE PROFILES

Today's medtech leaders provide worthy examples of corporate and industry leadership.

Steve Halasey and Ron Shinkman

In a time when company leaders in every sector of the economy are being challenged to meet higher standards of corporate governance, executives in medical technology companies offer some great examples of what company leadership should look like.

Whether they are developing a corporate vision, shaping an early-stage technology, conducting investor relations activities, or negotiating the acquisition of an emerging company, medtech company leaders often have a lot on their plates. Such wide-ranging involvement frequently provides medtech executives with just the sort of experience necessary to exercise leadership in an industry that is known for innovation. Whatever their company's size, many medtech executives also make significant contributions to advancing industry goals and improving the delivery of healthcare to patients.

In this issue, MX profiles a dozen company executives who are involved in notable activities on behalf of their own companies and the medical device industry as a whole. Their efforts to keep their own companies on the right track while also contributing to industry leadership provide strong examples of the level of executive ability now available to medical device companies.

Women in Charge

Not too many years ago, it would have been difficult—if not impossible—to find a woman at the head of a medical technology company. But that's all changed. Today, women executives are leading the charge at a number of medical device firms, from start-ups to major corporations. Having moved up the corporate ladder as the device industry has matured, more and more women are showing that they have the right stuff to take on the challenges of corporate leadership. Following are the profiles of three such women who are making their presence felt in their own companies—and beyond.

Tiffany P. Olson
President and CEO
Roche Diagnostics Corp.

When Tiffany P. Olson got her first job after graduating from the University of Minnesota in the early 1980s, her dream was to make a difference in the lives of people through healthcare. She also wanted to be a role model for women in what has been a male-dominated segment of bioscience. It appears both wishes have come true.

In May of this year, Olson was named the North American head of Swiss biotech giant Roche Diagnostics and president and chief executive officer of Roche Diagnostics Corp. (Indianapolis). The promotion comes after serving in several high-profile positions for Roche, including vice president of molecular diagnostics, vice president of corporate accounts, and business development manager for Roche Diagnostics. Prior to joining Roche in 1997, Olson ran her own firm, Resource Consulting Services, which conducted healthcare market research and new-venture project management. She also had stints at Wallace Laboratories (Cranbury, NJ) and Baxter Health Care (Round Lake, IL).

Among the product lines Olson will help oversee are diabetes care; centralized diagnostics; molecular diagnostics, including blood screening; and women's health and applied science, which includes the supplying of reagents and high-tech systems for research. The division netted a worldwide profit last year of $1.3 billion on revenue of $6.2 billion.

Nancy M. Briefs
President and CEO
Percardia Inc.

As chief executive officer of Percardia Inc. (Merrimack, NH), Nancy M. Briefs is in her third tour of duty with a medical device company start-up. "Start-ups are a very good fit for me. I am definitely entrepreneurial by nature, and I like being in an entrepreneurial environment," she says. "Developing a product that meets a clinician's needs—I find it incredibly challenging."

Percardia has received about $55 million in funding since its founding in 1998. Its principal product, the VStent coated implant, is designed to treat coronary artery disease (CAD) by increasing blood flow to arteries narrowed by plaque. CAD is the leading form of heart disease, and the biggest killer in the developed world. First-in-human (FIM) trials for the VStent are just getting under way in Italy and Argentina. A U.S. trial is expected in 2006. Although Percardia has operated lean, with just 19 employees and a handful of consultants, Briefs is confident the VStent will receive speedy FDA approval.

"You build a team around the challenge and the opportunity. This team was more heavily laden on the science side. They've really been focused on the execution, have overachieved, and the aggressive strategic milestones have been met," Brief says, adding that the typical emotional ups-and-downs of a start-up have been largely absent. As a result, she believes there will be no difficulties for Percardia securing another round of funding after the FIM trials are completed.

"I'm the visionary and the strategist, and I hire people smarter than I am," Briefs says of her management style. At the same time, she still allots time to participate in employee birthday celebrations and other morale-boosting events.

Briefs, who holds an MBA from Golden Gate University and bachelors degrees in business and psychology from Emporia State University, was elected in May to be chairman of the Medical Device Manufacturers Association (Washington, DC). Briefs believes a passionate voice is required at MDMA to represent innovative start-ups such as Percardia.

Kathy Ordonez
President
Celera Diagnostics and
Celera Genomics Group

The appointment of Kathy Ordonez as president of start-up Celera Diagnostics (Alameda, CA) in 2000 and her retention in the same role with Celera Genomics Group (Rockville, MD) in 2002 represented well-deserved achievements of a nearly 30-year career—and a triumph for one of the very few high-profile female executives in the biotech industry. But Ordonez had no time to celebrate.

Celera Genomics was founded in 1998 to sequence the human genome, patent the gene sequences it discovered, and market them to researchers and other commercial entities. However, the company's business plan foundered when the U.S. Patent and Trademark Office determined that such genetic discoveries were not patentable, and the publicly funded Human Genome Project began offering the results of its research for free. Celera Diagnostics was formed in 2000 as a joint venture with Applied Biosystems (Foster City, CA) to enhance genetic product development in the diagnostic realm.

Picking up the pieces of Celera's undermined business model, Ordonez was charged with using the treasure trove of data that Celera had compiled and converting it into marketable medical products. When she replaced founder and outgoing president J. Craig Venter, he called Ordonez Celera's "best hope" for making the transition.

Ordonez wasted little time springing into action. Within a month of her 2002 appointment, she cut Celera's workforce by 16%. Alliances were quickly formed with Seattle Genetics (Bothell, WA), Genentech (South San Francisco, CA), and Abbott Laboratories (Abbott Park, IL), among others, to identify and develop new products. In December 2002, FDA cleared the first Celera Diagnostics product, Viroseq, which spots gene mutations in the HIV virus that could undermine treatment. Two other Celera products seeking FDA approval are used to identify cystic fibrosis and hepatitis C.

In fiscal 2004, Celera Genomics lost $57.5 million on revenue of $60.1 million. That's a significant improvement over the company's 2003 loss of $81.9 million, and Celera continues to project improved margins.

Meanwhile, Celera Diagnostics has also developed alliances-notably with Abbott Laboratories and with Merck & Co. (Whitehouse Station, NJ). In fiscal 2004 the company posted a pretax loss of $42 million on revenue of $36.7 million—also an improvement on the $51 million loss on revenue of $20.8 million in fiscal 2003.

Prior to joining Celera in 2000, Ordonez held several high-level positions with Roche, including CEO of Roche Molecular Systems (Pleasanton, CA). She also had stints with Baker Instruments Corp. (Allentown, PA) and Union Carbide Corp. (Danbury, CT). 

Successors

In a recent issue, MX profiled three corporate leaders who have announced their retirement: John W. Brown of Stryker Corp. (Kalamazoo, MI), who retired as CEO in January, remaining as chairman of the company's board of directors; Ronald W. Dollens, president and CEO of Guidant Corp. (Indianapolis), who announced his intent to retire last year; and John P. Wareham of Beckman Coulter Inc. (Fullerton, CA), who completed his retirement transition in April of this year. Anyone who follows the medical device industry is aware of the impending sale of Guidant to Johnson & Johnson (New Brunswick, NJ), which is expected to close in the third quarter of this year. Dollens has agreed to remain with the company until the completion of its acquisition.

But what about those who will take over the helms of Stryker and Beckman Coulter? Following are profiles of these successors, whose challenges will certainly include filling the shoes of those they have replaced.

Stephen P. MacMillan
Chief Executive Officer
Stryker Corp.

At just 41, Stryker Corp. (Kalamazoo, MI) chief executive officer Stephen P. MacMillan seems on the young side to helm a $4 billion medical products company, but his résumé suggests otherwise.

MacMillan has 20 years of experience, having begun his career at Procter & Gamble in the mid 1980s. Before he was 30, he was responsible for marketing for Johnson & Johnson throughout Europe. By the time he was 35, he was president of Johnson & Johnson-Merck Consumer Pharmaceuticals. He joined Stryker in 2003 as president and chief operating officer, and was named CEO in December 2004.

"One of the challenges of running a broad-based company is trying to create growth," MacMillan told shareholders at Stryker's annual meeting in April. He believes that the aging baby boomer generation will provide booming future growth markets.

An overarching goal of MacMillan's is to grow revenue through diversification, partly through acquisitions. Although more than 80% of Stryker's business comes from the orthopedic implant and equipment market, its acquisition earlier this year of eTrauma (Deerfield Beach, FL) will better position it to benefit from the picture archive and communication systems (PACS) business. MacMillan has hinted that future acquisitions may also be on the horizon, but such deals will only be undertaken to improve the company's product offerings.

Also to that end, Stryker has created three distinct business units to focus on manufacturing and marketing instruments for trauma cases, in-body navigation, and pain reduction. The company is also investing nearly $70 million to construct 630,000 square feet of new manufacturing space and is constructing a new corporate headquarters.

During the first full quarter under MacMillan's leadership, revenue increased more than 16%. Stryker's stock is also up more than 10% since MacMillan became CEO.

Scott Garrett
Chief Executive Officer
Beckman Coulter Inc.

Like all successful life sciences companies, test/diagnostic giant Beckman Coulter (Fullerton, CA) is a mixture of entrepreneurial spirit and technical expertise. Chief executive officer Scott Garrett thus seems a perfect fit.

The 55-year-old Garrett was named Beckman's CEO in February, three years after joining the company as president of its clinical diagnostics division.

Prior to joining Beckman, Garrett had spent the past several years working for himself. He founded Garrett Capital Advisors in 1998, forming an alliance with Chicago Equity Capital. The two ventures acquired several medical device and life science companies. Garrett served on the boards of several of the companies and briefly as CEO of Kendro Laboratory Products, which recently merged with Thermo Electron Corp. (Waltham, MA).

A mechanical engineer by training, Garrett began his career working in the product research and development arena with Baxter International, but eventually segued into business development and management. He headed several Baxter divisions before being named president of its global laboratory products division. A decade ago he helped spin that division off into Dade International, now Dade Behring Inc. (Deerfield, IL).

Beckman Coulter, renowned over the years for introducing many diagnostic tests that are industry standards, reported 2004 sales of $2.4 billion, a 9.8% increase from 2003. About two-thirds of the company's sales are derived from after-market reagents, test kits, and consumables. Garrett predicts a similar increase in 2005 sales, led by strong growth in the company's clinical diagnostics division, particularly in the area of laboratory automation. In April, Garrett consummated his first transaction as CEO, acquiring Agencourt Bioscience Corp. (Beverly, MA) for $140 million and giving Beckman greater range in offering DNA and RNA diagnostic products. 

Healthcare IT

For many medical technology executives, the growing emphasis on information technologies in healthcare conjures a universe that is largely unknown territory. The landscape of healthcare IT is populated by companies and associations that are outside the experience of most medtech leaders, making it difficult to find a common language for discussion.

Fortunately, not everyone considers healthcare IT to be such a foreign land. Following is the profile of one executive who is well positioned to lead medical device companies into the brave new world of healthcare IT, and who has begun to make his influence felt during the past year.

Thomas N. McCausland
Chief Executive Officer
Siemens Medical Solutions USA

When Thomas N. McCausland joined Siemens nearly 20 years ago, he had a big challenge: fix the company's large motor/motor drive division. McCausland, an electrical engineer by training, used his background to identify the problems and acted accordingly. Within a few years he had tripled the division's revenue and returned it to profitability.

He has had similar success as chief executive officer of Siemens Medical Solutions USA (Malvern, PA) posting a fiscal 2004 profit of $1.3 billion on revenue of $8.7 billion. Sales have increased more than 40% since he took over the division in 1999. He has also engineered some major deals, acquiring healthcare software firm Shared Medical Systems Corp. (Malvern, PA) in 2000 for $2.1 billion.

The Shared Medical deal was part of McCausland's vision to create a fully digitized, one-stop healthcare environment for patients, whose electronic medical records can be easily shared among disparate providers. Indeed, while McCausland has boosted sales dramatically, he has also made over much of the Siemens Medical product line from mechanized to digital products. He estimates that more than 70% of Siemens Medical's product line has been revamped since he took over, with one of the biggest innovations being the introduction of the Windows-compatible Syngo software system that now governs many Siemens Medical products. To that end, McCausland envisions Siemens Medical as becoming the Microsoft of the medical industry, offering the most sought-after and cross-platform compatible operating systems.

In addition to his work at Siemens, McCausland is chair of the health information technology sector for industry association AdvaMed (Washington, DC). His goals for 2005 include the advancement of finance policies and demonstration projects that will encourage innovation in “smart” medical technologies; working with the Food and Drug Administration to minimize the problems of employing software patches on medical technology. 

Diagnostics

The in vitro diagnostics industry encompasses a wide variety of technologies and approaches to the healthcare marketplace—but also operates in a payer environment that is causing elevated concern among many of its companies. Bringing together industry representatives to address these challenges is a role that has recently been seized by the diagnostics sector of industry association AdvaMed (Washington, DC). And heading up that group is the well-known industry executive profiled below.

Henry Nordhoff
Chief Executive Officer
Gen-Probe Inc.

In an industry where breakthroughs and developments seem to occur overnight, Gen-Probe Chief Executive Officer and Chairman Henry "Hank" Nordhoff seems to be an ever-present influence.

Nordhoff is entering his 12th year at the helm of Gen-Probe (San Diego), having been appointed to his current position in 1994 and as chairman three years ago. The company markets an array of diagnostic products for screening blood and detecting diseases ranging from West Nile virus to HIV. Although Nordhoff has headed the company for more than half of its 22-year-history, Gen-Probe seems to be in good hands: in 2004, it reported earnings of $55 million on revenue of $270 million—a net margin surpassing 20%. Nordhoff estimates that Gen-Probe has an 80% market share of the U.S. market for blood screening products. The company currently earmarks nearly 30% of its revenue toward research and development. Nordhoff predicts that China and India will be huge markets for Gen-Probe's products in the coming years. In the United States, the company is working toward federal approval of its blood screening tests for West Nile—which will boost reimbursement significantly—and prostate cancer. Gen-Probe is also looking into entering the industrial testing market, which would entail the screening of food and water products.

In addition to his work at Gen-Probe, Nordhoff also chairs the diagnostics sector of AdvaMed. For 2005, his goals include reforming reimbursement policies to receive payments for advanced molecular diagnostic lab tests; speeding up reimbursements in general; and promoting a regulatory environment that prevents "impeding continued technological advancements in the development and commercialization of diagnostic products." 

Reimbursement Gurus

Of all the challenges faced by medical device companies, arranging for reimbursement from government and private third-party payers has to be considered among the most complex—and perhaps also among the most intractable. Perhaps that's why so many medtech companies today have begun to staff new offices of reimbursement specialists with high-level executive talent. The four reimbursement experts profiled below have gone beyond the realm of their own companies to help forward industry positions with regard to reimbursement policy, especially as it involves the Centers for Medicare and Medicaid Services.

Robin R. Bostic
Vice President of Reimbursement
Thoratec Corp.

In the world of pharmaceuticals and medical devices, consistency in manufacturing and delivery is absolutely necessary. Robin Bostic discovered long ago that such consistency is far from likely in the world of reimbursement.

"There is never a consistent method regarding coverage, coding, or payment, and one of the challenges is being aware of those changes and being able to augment your strategy to be aware of those changes," says Bostic, who is vice president of reimbursement for Thoratec Corp. (Windham, NH).

A perfect example was an injectible arthritis drug for which Bostic sought a reimbursement code. Because the injectible contained more effective ingredients—and cost more—than competing drugs, Bostic was able to obtain significantly higher reimbursement for her company.

"Medicare then decided to create different codes," Bostic recalls. "They didn't want it to be perceived that our company had a competitive advantage." As a result, there were eventually three different codes for the drug. "From a hospital's administrative perspective, it was a complete nightmare," she says.

Robin Bostic entered the reimbursement sector by happenstance. She began her career in the insurance industry, working for Employers of Texas (Dallas). In the early 1990s, a friend at a start-up firm sought her advice about how physicians could get paid for using its product. She had stints at Smith & Nephew (Memphis), Exogen (Piscataway, NJ) and Orthofix (Dallas) before arriving at Thoratec.

Perhaps ironically, Bostic says her best life experience for her career was being in a country and western band while she attended Baylor University. Although such an endeavor is the cultural opposite of manufacturing and distributing drugs or medical devices, Bostic believes both require similar foresight in order to succeed. "You have to be able to align agendas and have someone understand objectives," she says.

Beyond foresight, Bostic also believes teamwork plays a huge role in successfully securing reimbursement codes, and that the industry has changed to reflect that. “Ten years ago, there would be product managers who launched products without getting reimbursed,” she says. “Now, they say, here's our product, here's the protocol. What are our challenges for reimbursement? That's where you want to be.”

Jo Ellen Slurzberg
Vice President of Reimbursement and Health Policy
Almyra Inc.

Almyra Inc. (Boxborough, MA) is the holding company for a variety of firms trying to bring new therapeutic and implantable cardiac and obesity-related products to market. Getting the products through the approval process is one obstacle; equally difficult is convincing Medicare and private insurers to actually pay for them.

As a result, Jo Ellen Slurzberg, Almyra's vice president of reimbursement and health policy, believes reimbursement goes to the very value proposition of the developed product. But what actually convinces payers to cover a product often remains a mystery. "The hurdles are very high to achieve coverage. That's not a bad thing in its own right, but the market should have guidelines for the necessary evidence to convince certain populations," she says.

Given the difficulty of divining such guidelines, Slurzberg believes that discovering ways to get the product paid for is synonymous with its development. “Seeking reimbursement shouldn't come after it goes to market. The company is really going to be responsible for carving its own reimbursement pathway, and the process is complicated enough to make it a driving force for new product development.” Slurzberg stresses teamwork between the business development and regulatory groups to ensure success.

Slurzberg has spent more than a decade working on reimbursement policies for a variety of companies, including Schering-Plough Corp. (Kenilworth, NJ), who hired her as a sales representative right after graduating from the University of Virginia. She eventually helped develop Medicare coverage policies for such Schering staples as Procrit and Leustatin. She has also performed similar tasks for Ortho Biotech (Raritan, NJ); Advanced Tissue Sciences Inc. (San Diego); Cypress Bioscience (San Diego); Circe Biomedical (Lexington, MA) and Boston Healthcare Associates (Boston).

In addition to her regulatory and reimbursement work, Slurzberg co-chairs the Medical Device Manufacturers Association reimbursement committee and is the CPT coding subcommittee chair.

Daniel Waldmann
Vice President of Government Relations
Tenet Healthcare Corp.

After more than a decade working in the reimbursement field for the medical device industry, Daniel Waldmann is leaving to enter the hospital field.

Waldmann was previously the director of federal affairs and reimbursement for Johnson & Johnson (New Brunswick, NJ). But this June he accepted a new position as vice president of government relations for Tenet Healthcare Corp. (Dallas), one of the nation's largest for-profit hospital chains.

"I was attracted to taking this position because the hospital industry is going to be dealing with an immense number of fundamental changes in how they're going to be paid and reimbursed by the government," Waldmann says. In particular, he cites the emergence of industry-driven quality initiatives such as pay-for-performance and the more-intense adoption of healthcare information technology. "I see hospitals entering a new era of opportunity, to focus on quality and efficiency and to demonstrate new ways of operating that deliver benefits for payers and patients. I will be working in an environment with a much more global view of how hospitals work."

Waldmann will be setting up a Washington, DC, office for Tenet, a first for the company. He is also expected to be active in the Federation of American Hospitals and Health Systems (Washington, DC), the major lobbying group working on behalf of for-profit hospitals; the American Hospital Association (Chicago); and the Healthcare Leadership Council (Washington, DC). Waldmann recently resigned the positions he held with industry association AdvaMed (Washington, DC), where he chaired the payment advocacy and durable medical equipment workgroups, although he still expects to work with AdvaMed in the future.

Prior to working for Johnson & Johnson, Waldmann worked in the food and drug department of the law firm of McKenna & Cuneo (Washington, DC). He also served as a legislative counsel in the government affairs office of Medtronic Inc. (Minneapolis). He holds a juris doctor degree from George Washington University.

Sarah Wells
Director of Health Policy and Payment
Boston Scientific Corp.

Four years ago, Sarah Wells, director of health policy and reimbursement for Boston Scientific Corp. (Natick, MA) relocated from corporate headquarters to Washington, DC. She felt the difference almost immediately.

"I feel like I'm inside the Beltway. Being in Washington affords you the opportunity to go to many more things. I can go to all the major CMS town hall and open-door meetings, and we're very involved in meeting CMS one-on-one," Wells says. "If you're long distance and have to get on a plane, you have to make much more discriminating decisions about what you're going to do."

In her nearly seven years with Boston Scientific, Wells has played a significant role in securing reimbursement codes for many of its most important products, including key vascular and interventional radiology products for its Medi-Tech division. She also helped the company get adequate reimbursement for its drug-eluting stent when it was approved by FDA last year.

Wells considers consensus building to be one of the most important aspects of her job. "I try and balance strategic goals with data-driven details so that we can present a compelling argument for policy change at CMS," she says. "But I also have to work through other people. I work with a large and diverse group of experts at Boston Scientific so that our strategies are very business-focused."

Wells also considers it important to build relationships with other stakeholders. "I work with a lot of specialty societies, hospital customers, and other industry manufacturers to build coalitions," she says. To that end, Wells is cochair of the reimbursement task force for the Medical Device Manufacturers Association (Washington, DC). She also chairs a special task force for coverage with evidence development that's part of a CMS initiative. 

Clinical Affairs

With regulatory and competitive pressures always on the minds of company leaders, it's sometimes easy to forget that everything medical technology companies do is ultimately intended to benefit patients. But for those who specialize in clinical affairs, that isn't a lapse that occurs often. And with ever-greater importance being placed on the results of clinical studies-whether they are conducted to determine safety and efficacy or economic outcomes-companies are also unlikely to forget the importance of this area. Following is the profile of one such expert whose work has had a significant impact on patient care over the past year.

Joerg Koglin, MD
Vice President and Senior Medical Director for Cardiovascular
Clinical Services
Boston Scientific Corp.

As growth of the commercial vascular device market progresses, Joerg Koglin, MD, is certain to have a role.

Koglin, a German-born cardiologist, is vice president and senior medical director for cardiovascular clinical services at Boston Scientific Corp. (Natick, MA). Among his roles are helping to identify ways of applying new technologies to vascular and cardiovascular care; shepherding Boston Scientific toward developing such products as renal, intercranial, and carotid stents; and eventually developing new vascular technologies beyond stents.

Koglin's academic résumé is much longer than his corporate credentials. After earning his medical degree from the University of Heidelberg in 1991, he spent the better part of a decade performing fellowships in cardiology and biology and conducting academic research at the University of Munich and Harvard School of Public Health. He joined Boston Scientific in 2002 as an associate medical director, conducting medical monitoring for phases II and III of clinical trials for the company's Taxus cardiac stent. He was promoted to his current position at the start of 2005.

Although Koglin values the research being done in academic environments, he also appreciates how commercial applications can truly change the practice of medicine. "We have the chance to be a very large part of the changes taking place in cardiac care," he says.

Koglin manages a group of about 23 high-level researchers, mostly physicians and PhDs—a group he all but built from scratch since joining the company. "It's a team that can take data and dig deep to come up with relevant results," Koglin says, adding that their work drives many of Boston Scientific's decisions regarding product development and technology acquisition. Given his team's accomplishments and credentials, Koglin sees himself predominantly as a visionary manager as opposed to focusing on day-to-day operations. "This is about developing a framework and helping those individuals to develop their own paths to reach a particular goal," he says.

Copyright ©2005 MX