Orange County’s reputation as a center of the healthcare industry is borne out in the Business Journal’s annual lists of fastest-growing public companies based here.
Seventeen of the 49 companies on this week’s collection of three lists—which is based on revenue gains over a two-year period and broken into small, medium and large categories—are claimed by companies in the healthcare sector (see Special Report, page 37; related stories throughout issue).
The lists confirm the area’s long standing as a hub of the medical device and drug sectors, both of which have helped related companies take root and flourish. Healthcare and related companies also accounted for 40% of the fastest-growing large companies, placing six entries among the 15 on that list, which has a minimum of $500 million in revenue.
Healthcare also has a significant if smaller presence on the medium-size companies list, with three of 13 entries, or 23%, falling under that banner. Medium-sized companies have between $100 million and $500 million in revenue.
The lists also point up OC’s reputation as fertile ground for companies across the industry spectrum.
Companies in the healthcare sector account for 40% of the entries—eight out of 20—on the list of fastest-growing small companies, which includes enterprises with $100 million in sales or less.
The lists also illustrate how the spread of the healthcare industry in OC goes beyond device and drug makers. Other sectors represented by entries on the list include a software company that specializes in healthcare providers, a hospital company, and operators of nursing homes and other healthcare facilities.
Medical Devices
Two Irvine-based companies—Masimo Corp. and Edwards Lifesciences Corp.—appear on the large-companies list.
Edwards, a maker of replacement heart valves, posted a 25% growth in revenue to $1.97 billion for the 12 months ended in June from $1.58 billion for the same period ended in June 2011. It ranked No. 7 on the large-companies list.
Edwards has picked up much of its growth from the late 2011 approval of the less-invasive Edwards Sapien heart valve, which is inserted via catheter.
No. 8 Masimo makes patient monitoring devices. Its revenue rose 21.5% to $521.3 million for the 12 months ended in June from $429.2 million in the same period ending in June 2011.
Cofounder and Chief Executive Joe Kiani has been making news on the patient safety front, arguing that Masimo and other device makers should share data to prevent patient deaths in hospitals. Kiani’s effort has even attracted former President Bill Clinton, who spoke at Masimo’s summit earlier this year.
Irvine-based vascular device maker Endologix Inc. is the highest-ranking healthcare company on the fastest-growing list for medium-sized companies.
Endologix is No. 4 on the list, with a 59% increase in revenue to $119.7 million for the period ending June 30.
The company makes stents used to treat abdominal aortic aneurysms, or a ballooning of the body’s main artery.
Todd Abraham, Endologix’ vice president of operations, in a June interview cited revenue growth as a reason for moving to a new Irvine Spectrum headquarters. He estimated that the device maker’s revenue was growing at roughly a 20% clip over the past few years.
“We project that we will run out of capacity if we didn’t make a move—we want to make sure we stay ahead of that growth curve,” Abraham said.
Two Irvine-based device makers are on the small-companies list: Dental laser maker Biolase Inc. and Patient Safety Technologies Inc., which makes a medical device designed to reduce the amount of sponges accidentally left in patients’ bodies after surgeries.
Biolase ranked No. 9 on the list, with 59.9% revenue growth to $61.7 million in the 12 months ending June 30 from $38.6 million in the 12-month period ended June 2011. No. 11 Patient Safety’s revenue grew 49.9% from $13.2 million in the 12-month period ended June 2011 to $19.8 million in the 12 months ending June 30.
Drug Makers
The fastest grower overall on this year’s lists was Aliso Viejo-based drug maker Avanir Pharmaceuticals Inc. (see story, page 42). Avanir topped the small-companies list and the field overall with a 1,088% increase in revenue from $5.6 million to $67.2 million.
Anaheim-based Questcor Pharmaceuticals Inc. topped the large-companies list. The maker of injectable H.P. Acthar Gel—(see story, page 38)—saw its revenue shoot up 333% to $620.6 million in the 12 months ended June 30 from $143.4 million in the 12 months ended June 2011.
Irvine-based Botox maker Allergan Inc.—(see story, page 1)—came in at No. 11 on the fastest-growing list of large companies. Allergan, which has been fueled by 11 Food and Drug Administration product approvals since 2010, posted a 15% revenue gain from $5.2 billion in the 12 months ended June 2011 to $5.98 billion in the 12 months ending June 30.
Facilities
The Ensign Group Inc., a Mission Viejo-based nursing home operator, is the No. 9 entry on the fastest-growing list for large public companies. Ensign, which has a strategy of buying underperforming nursing homes and turning them around, saw its revenue grow 21% to $856.5 million in the 12 months ending June 30 from $706.7 million in the 12-month period ending June 2011.
Santa Ana-based hospital operator Integrated Healthcare Holdings Inc. is making its debut on the list for large public companies. Integrated owns Western Medical Center-Santa Ana and Coastal Communities Hospital, both in Santa Ana, along with Western Medical Center-Anaheim and Chapman Medical Center, both in Orange. It saw its revenue grow 14.5% to $519.2 million from $453.6 million in the 12 months ended in June 2011.
Service Providers
Irvine-based Quality Systems Inc. came in at No. 8 on the medium-companies list. The healthcare software maker posted 22% revenue growth in the 12-month period ended June 30 to $451.4 million.
Quality, which was one of the fastest-rising OC stocks in the 2000s, has faced some challenges in recent years as its market has changed, including doctors’ preferences for cloud-based software, as well as narrowing opportunities in its core markets.
Among the smaller companies, Newport Beach-based Pacific Health Care Organization Inc. came in at No. 3. Pacific’s revenue grew 169% to $5.6 million in the 12 months ending June 30 from $2.1 million in the same period ending in June 2011.
Pacific manages and administers networks of doctors established to serve the workers’ compensation insurance industry. It has two healthcare organizations—one is managed by primary care doctors and requires a referral to specialists, along the lines of a traditional health maintenance organization. Injured workers can be seen and treated by specialist doctors sans referral in the other network.
It sells its services to California businesses and claims administrators.
Mission Viejo-based Auxilio Inc., a company that offers print management services to help hospitals and other healthcare providers cut their dependence on paper records, is the No. 6 entry on the list for small public companies. Auxilio’s revenue jumped 117% to $38.3 million in the 12 months ended in June compared to $17.6 million in the period ended in June 2011.
Download the 2013 OC’s FASTEST-GROWING PUBLIC COs list (pdf)
