Irvine-based medical device maker Endologix Inc. recently cracked the $1 billion market value club and was hailed as one of the “best growth stories today in med-tech.”
Endologix makes catheter-delivered stents used to repair ruptured or ballooning segments of the abdominal aorta, the body’s main artery. The condition could cause death if left untreated.
Its products include Powerlink, AFX and the Ventana and Nellix, with the latter two still in development.
Endologix saw its revenue grow 25% last year to $105.9 million. It posted a net loss of $35.8 million for the year, up from $28.7 million in red in 2011.
Shares of Endologix were up about 10% through March after rising 22% in 2012. Its market value has remained near the $1 billion mark more recently.
“Where Endologix enters the scene is with its platform of solid (if not superior) grafts and technology,” wrote Stephen Simpson, a financial analyst and columnist for investor website Seeking Alpha.
Simpson praised Endologix’s competitiveness in the abdominal aortic aneurysm market but also noted that “the reality is that success in med-tech often comes down to an arms race, and Endologix is under-armed relative to giants,” such as Minneapolis-based Medtronic Inc. and Bloomington, Ind.-based Cook Medical Inc.
He noted that Endologix, even with advantages such as a smaller device that’s considered easier for doctors to implant, has only about 15% of the U.S. market share and 10% of the global share.
Simpson wrote that several companies could be “logical acquirers” of Endologix, including New Brunswick, N.J.-based Johnson & Johnson, Abbott Laboratories in Chicago, and Covidien PLC, the Ireland-based medical conglomerate that has a large neurovascular operation in Irvine.
Endologix has been careful in how it addresses any takeover talk.
“As a public company, we’re always going to be keen to do what’s in the best interest of the shareholders,” Chief Executive John McDermott told the Business Journal in December.
McDermott added that Endologix has “tremendous growth opportunity ahead of us for many, many years” and is planning for a long-term future as an independent company.
Hearing on Charity Care
A proposed bill that would require private nonprofit hospitals in Orange County and across California to provide set levels of charity care got its first hearing last week by the state Assembly Health Committee.
Assembly Bill 975 originally required all such hospitals and free-standing nonprofit clinics that provide multiple services to spend a minimum of 5% of their net revenue on charity care starting in fiscal year 2014 in order to maintain their tax-exempt status.
It has since been amended to leave open the possibility of some adjustment on a set rate.
The state currently requires charity care spending on a case-by-case basis for local hospitals.
The bill is timed to coincide with the expansion of federal healthcare reform, according to its sponsors in the Assembly, Bob Wieckowski and Rob Bonta, both Democrats from the Bay Area.
Two groups that are traditionally at loggerheads have continued to stake out their positions in the meantime:
Oakland-based union California Nurses Association is continuing its backing of AB 975. A statement from the union said the bill would “clearly define charity care to ensure that it is care for the poor, not marketing, cutting of services or other schemes and redefine genuine community benefit.”
The California Hospital Association, a Sacramento-based trade group, ripped AB 975, calling it “a manufactured solution in search of a problem” in a news release. The group also contended that the proposal “replaces local control with a ‘guilty until proven innocent’ burden on well-managed hospitals” and would affect implementation of federal healthcare reform.
Charity care has been a sensitive subject in California over the past year or so, with concerns heightened in part by media reports showing that the costs of providing healthcare for underinsured or uninsured patients primarily falls on financially strained public hospitals in some parts of the state.
Orange County is one of three in California that does not have a publicly run hospital. The county’s Medical Services Initiative program pays for care for the indigent or otherwise needy at a number of local hospitals.
Bits and Pieces
Madison, Wis.-based Erdman Co., a healthcare consulting, facility planning and development company, said it will open an office in Newport Beach, its ninth … Newport Beach-based Nvision Eye Care Centers is now offering dry-eye treatment with a device called LipiFlow made by Morrisville, N.C.-based Tear Science Inc.
