Kinetic Concepts Medical Device Company Intelligence Report

Medical Device Company Intelligence Reports provide a full review of the company's activities, from its origins to its latest corporate activity, including mergers and acquisitions, agreements, divestitures, major purchasing contracts and litigation. Sections are included on products, international activities and R&D, as well as a full, in-depth five year financial analysis. An introduction to each report and a full table of contents is provided for review. More than 60 Medical Device Company Intelligence Reports are currently available.

Founded in 1976, Kinetic Concepts Inc (KCI) is a global medical technology company with leadership positions in its two core businesses - advanced woundcare and therapeutic surfaces. KCI's advanced woundcare systems incorporate the company's proprietary V.A.C. technology, which KCI claims has been clinically demonstrated to help promote wound healing and can help reduce the cost of treating patients with serious wounds. The therapeutic surfaces product line includes specialised hospital beds, mattress replacement systems and overlays which are designed to address pulmonary complications associated with immobility, prevent skin breakdown and assist caregivers in handling obese patients. KCI's products are used in a variety of healthcare settings, including acute care hospitals, extended care facilities and patients' homes, both in the US and overseas.

With revenue of US$1.88 billion in 2008, KCI is the overall market leader in the advanced woundcare market. KCI's growth is primarily being driven by increased revenue from its V.A.C. Therapy systems which utilise negative pressure wound therapy (NPWT) to treat a variety of wounds. In 2008, V.A.C. revenue rose by 8.9% to US$1.39 billion, accounting for 74.2% of total revenue, compared with 79.4% and 77.9% in 2007 and 2006, respectively.

In May 2008, KCI added a third major platform to its business when it acquired LifeCell Corporation, a developer, processor and marketer of biological soft tissue repair products made from human and animal tissue. Surgeons use LifeCell's products to restore structure, function and physiology in a variety of reconstructive, orthopaedic and urogynaecologic surgical procedures. With revenue of US$242 million and year-on-year growth of 27% in 2008, LifeCell provides additional long-term growth opportunities for KCI, while delivering sustained value to its shareholders. KCI believes this combination allows it to accelerate its strategy to increase its presence in the operating room. By capitalising on LifeCell's strong relationships with acute care operating physicians, KCI believes it will have a platform upon which to launch its next-generation negative pressure-based products for the surgergy suite.

Despite increased competition and the challenging economic environment, as well as continuing uncertainty about how the US healthcare market will be reshaped under the Obama administration, KCI remains optimistic for the future. It is targeting revenue of between US$1.95 and US$2.00 billion in 2009, up by between 4% and 6% year-on-year. Earnings per share (EPS) will likely grow by 4% to 8% year-on-year, to between US$3.95 and US$4.10. The revenue guidance reflects KCI's expectation of continued capital contraints in the hospital setting, resulting in a double-digit decline in revenue from therapeutic surfaces products, combined with slower international V.A.C. Therapy revenue growth due to additional competitive and economic factors.