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Device Makers Eye Expansion in Costa Rica

Inari Medical Inc. (Nasdaq: NARI) is following the blueprint, and travel plans, of larger medical device companies in Orange County with its latest expansion.

Inari, among the area’s faster-growing public companies since going public in 2020, recently announced plans to invest a minimum of $15 million in a new manufacturing facility in Grecia, Costa Rica.

The company recently signed a lease agreement for a roughly 70,000-square-foot development in that city’s Evolution Free Zone, a high-tech business park that is roughly an hour’s drive from San José, Costa Rica’s capital.

The lease agreement, which allows for two sizeable phases of expansion beyond the first building, also comes with an option to buy the manufacturing and distribution facility, according to regulatory filings.

Inari expects to initially hire 300, and ultimately 600 people, at the new location and its future phases, which are scheduled to open sometime next year, according to a statement.

It counted 630 workers at its Irvine headquarters as of last year, according to Business Journal data.

The investment will help Inari meet “growing global demand” for the company’s tools which treat venous thromboembolism and other vascular diseases, Medial Operations Senior Vice President Paul Koehn said in a statement.

The building would mark Inari’s largest facility outside OC, regulatory filings indicate.
Its Spectrum-area headquarters, which it moved into a few years ago, runs 130,000 square feet.

The Costa Rica facility “will exponentially increase [Inari’s] production capacity and will add to the company’s existing manufacturing facilities in Irvine,” local officials said at the time the deal was struck.

“It’s a great place for us to make a second home,” Inari officials said when the deal was announced.

Top Export

Inari’s upcoming facility will join the operations of other local medtech companies in Costa Rica, including Edwards Lifesciences Corp., MicroVention Inc. and Johnson & Johnson MedTech, that opened in the last 10 years.

Inari’s announcement comes less than a year after J&J Medtech, one of the world’s largest medical device manufacturers, and with a sizeable campus in Irvine, revealed its own plans to build a 200,000-square-foot facility in Alajuela, Costa Rica.

Construction has already begun on the production plant, which is expected to add 3,000 jobs in the region over the next three to five years, the company said.

Once completed, the facility will manufacture products with an emphasis on heart rhythm solutions and orthopedics.

J&J MedTech—which has its headquarters in New Jersey, but counts over 2,000 employees at its campus in Irvine—said it has had commercial operations in Costa Rica for more than 40 years.

“Our company has benefited enormously from the country’s local talent that has specialized experience in our industry,” Gustavo Galá, J&J MedTech Latin America international vice president, said in a statement.

In 2017, medical devices surpassed agricultural products as Costa Rica’s top export for the first time in the country’s history.

The U.S. is Costa Rica’s top trading partner with medical devices accounting for more than $293 million in two-way trade, according to the International Trade Administration.

Costa Rica’s proximity to the U.S., Canada and Europe has made it a prime nearshoring destination for medical device companies including locally headquartered Edwards Lifesciences and MicroVention.

Edwards, best known for its heart valve products, six years ago expanded its presence in Costa Rica with a $100 million investment in a 274,000-square-foot facility in La Lima Industrial Park in Cartago.

Edwards (NYSE: EW) is the largest medical device maker in Orange County, as well as the second largest public company, with a market cap of $56 billion and annual revenue of $6 billion for 2023, a 12% increase from the year prior.

Aliso Viejo-based MicroVention counts three manufacturing plants in Costa Rica dedicated to making medical devices for cerebral aneurysms and other neurovascular diseases.

In 2013, it opened its first location outside of the U.S. in San José, Costa Rica. The company said it hired about 150 employees for the 80,000-square-foot facility, which was then expanded to 150,000 square feet in 2018.

MicroVention is a U.S. subsidiary of Tokyo-based Terumo Corp., which counts about $6 billion in annual revenue and operations in more than 160 countries.

The company’s OC operations, including its base in Aliso Viejo, are reported to total about 1,200 workers.

ClotTriever

Inari last month posted positive two-year interim results for its ClotTriever system that was designed to capture and remove large blood clots from veins.

The 228 patients in the study showed “significant and sustained improvement” in post-thrombotic syndrome after using ClotTriever.

Inari said it is currently enrolling patients for another trial which will compare outcomes after using ClotTriever versus blood thinners.

“We are committed to generating best-in-class clinical data,” Chief Medical Officer Thomas Tu said in a statement.

Inari closed its acquisition of Paris-based LimFlow SA the same month it announced plans to expand into Costa Rica.

The company agreed to pay as much as $415 million for LimFlow, a maker of products used to reduce amputation in patients with chronic limb-threatening ischemia. It’s Inari’s largest-ever acquisition.

LimFlow’s products are currently made by third-party contract manufacturers in Germany and Costa Rica, according to Inari’s latest annual report.

Inari in February reported $132.1 million for fourth-quarter revenue, up 23% from the year before.

The company said the revenue growth was mainly driven by increased adoption of its procedures, new products and global commercial expansion.

“Our solid fourth-quarter performance was driven by strong underlying procedural growth and crisp execution across our three growth pillars led by our core VTE business, with meaningful contributions from emerging therapies and international geographies,” Inari’s Chief Executive Drew Hykes said in a conference call.

Inari counted a $2.5 billion market cap at press time; its shares have more than doubled since its 2020 IPO.

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