Amid Economic Slowdown, OC Medical Device Makers Add Jobs; Beckman No. 1
After a period of industry contraction and consolidation, Orange County’s largest biomedical employers added products and customers and grew their aggregate workforce in the past year.
The 25 largest medical device and instrument makers with operations in OC reported an overall job gain of 872 positions, or 10%, according to this week’s Business Journal list. The companies reported a total of 9,963 Orange County workers as of the end of July.
“It looks like a fairly good year, despite the general economy, in terms of hiring or layoffs,” said David Anast, publisher of the Biomedical Market Newsletter in Costa Mesa.
Last year, the employers on the list reported a local employment drop of 7%. That decline was linked to several large biomedical employers relocating operations, shutting down plants or streamlining operations and included Medtronic Inc.’s closing its Anaheim blood oxygenation plant and moving jobs to its Minnesota base or to Mexico.
Another example was Tyco, a Bermuda-based manufacturing and service conglomerate, picking off Mallinckrodt Inc., a maker of respiratory devices and radiopharmaceuticals, for $3.1 billion. Tyco ranks No. 7 on this year’s list, with 318 workers in Irvine.
Beckman Coulter Leads List
Orange County is considered by some to be a nerve center of the biomedical industry. And the list illustrates the dominance of Beckman Coulter Inc. and Edwards Lifesciences Corp., two homegrown biomedical companies.
Beckman retained its position as the No. 1 life sciences company in Orange County, seeing its local employment grow 5% to 2,299. Fullerton-based Beckman, a biomedical testing bellwether, has been busy in recent months, introducing a range of new testing assays and striking two separate deals worth $70 million with Quest Diagnostics Inc.’s Nichols Institute in San Juan Capistrano and Premier Inc., a San Diego-based alliance of hospitals and health systems, for hematology instruments and supplies.
Meanwhile, heart-valve maker Edwards Lifesciences, headquartered in Irvine, remained in the No. 2 spot on the list. The OC workforce at Edwards, which became a freestanding public company less than 18 months ago, grew 11% to 1,581 jobs.
“Some of that was meeting the needs of the company’s growth following the spin-off from Baxter (International),” said Scott Nelson, an Edwards spokesman. Edwards added employees both to build the corporate infrastructure necessary for a standalone public company and as a result of growth in its core heart-valve business, Nelson said.
Edwards’ job gain came after it jettisoned two of its less profitable businesses in its first year of operation. Edwards sold Novacor, a heart-device unit, to World Health Corp. of Ottawa, Canada, for a 25% World Heart stake valued at around $58 million in May 2000.
Edwards also sold Bentley Laboratories, a maker of disposable oxygenators, blood reservoirs and filters used during heart surgery, for $30 million to Jostra AG, a German company.
No. 3 B. Braun McGaw Inc., maker of intravenous solutions, infusion pumps and hospital pharmacy items, reported flat employment numbers with 1,325 workers in Irvine. B. Braun McGaw, in the previous year, dropped 390 Irvine jobs after shifting some of its operations to its American headquarters in Bethlehem, Pa. B. Braun McGaw is a unit of B. Braun Melsungen AG of Germany.
Meanwhile, Alcon Laboratories Inc., No. 4 on this year’s list, saw its Irvine workforce surge up 30% to 580 workers. Alcon is a maker of ophthalmic pharmaceuticals, surgical products and instruments. In the contact lens product arena, Alcon competes with Irvine-based Allergan Inc. (see story, page 28).
No. 5 Medtronic, however, reported an 8% job growth to 430 at its heart valve plant in Santa Ana.
Most Firms Added Jobs
Overall, 13 of the 25 companies on this year’s list reported employment gains, with five reporting job losses and the remainder reporting flat growth. On a list-to-list basis, employment among included companies was also up 10%.
One of Orange County’s newest public companies made its debut at No. 11 on this year’s list,Sybron Dental Specialties Inc., with corporate offices in Orange and 250 local workers. Sybron Dental went public in November, when it was spun off from former parent Sybron International Corp., a maker of general laboratory products.
Sybron, which boasted a market capitalization of around $800 million as of last week, debuted at around 13 a share and has generally traded in the low 20s. The company makes general dental, orthodontic, endodontic and infection-control products.
Sybron appears to be an exception to current rules about device makers and going public, analysts said.
“The IPO market for local medical-device makers is essentially dead unless it’s a very large, established private company,” Anast noted.
Small Companies Grow
On the employment front, smaller device concerns including ICU Medical Inc. in San Clemente, SensorMedics Corp. in Yorba Linda and Horizon Medical, a Santa Ana contract device manufacturer, reported some of the largest percentage jumps.
For instance, No. 12 ICU, which makes intravenous therapy products, said its employment jumped 76% to 238 workers. No. 8 SensorMedics, a maker of diagnostics and therapeutics for respiratory care, reported its workforce grew at a 49% clip, to 306 workers. Employment at No. 10 Horizon was up 40%, to 280 workers.
Companies that were on last year’s list but dropped off this year’s included three Irvine-based concerns. Those were Imagyn Medical Technologies Inc., which makes urological, gynecological and general surgery medical products; Trimedyne, a maker of medical/surgical lasers and optical energy delivery systems and Radiance Medical Systems Inc., a catheter maker. n
