Irvine-based medical device makers Edwards Lifesciences Corp. and Endologix Inc. are vastly different when it comes to revenue and profit, but they both rank among the top 10 hirers in the medical technology field over the past five years, according to a recently released report.
London-based market intelligence consulting firm Evaluate Ltd. and its editorial arm, EP Vantage, analyzed 99 U.S. and European-based device makers and their companywide employment trends for the report, which they released in August.
Endologix, a maker of devices to repair abdominal aortic aneurysms, or a ballooning of the body’s main artery, posted 154% staff growth from the period of 2008 to 2013, bringing its end-of-year headcount to 482 workers. It ranked No. 8 on EP Vantage’s top 10 hirers of the past five years by the percentage of staff added.
Heart valve maker Edwards added 2,400 jobs over the past five years, bringing its companywide headcount to 8,600 at the end of last year. Edwards tied for ninth on EP Vantage’s ranking by the number of staff it added.
“The remarkable success of Edwards’ transcatheter heart valves and our other innovations that are positively impacting patients’ lives have allowed us to aggressively add great, new talent,” Chief Executive Michael Mussallem said in a statement.
Edwards believes that “investing early in strong talent” is a “critical element” for extending its leadership in structural heart disease and critical care technologies, Mussallem said.
Endologix did not respond to a request for comment.
Growth Fuels Hires
Both companies have grown in recent years, likely necessitating the headcount increase.
Edwards, for example, introduced its fast-growing Edwards Sapien less-invasive replacement heart valve domestically in 2011.
Endologix’ growth has come organically and through acquisitions, including a $15 million deal in 2010 for Bay Area-based Nellix Endovascular Inc., which gave it the line of Nellix aneurysm seals that are under development.
EP Vantage noticed differences among the ranks of the top 10 hirers in terms of percentage and actual job numbers.
The research firm noted that the top 10 gainers by percentage are smaller in size than those with the largest number of hires, “with fewer than 1,300 employees on average.”
The report noted that the largest hirers by percentage had bigger market values, “being worth an average of $2.6 billion. Most have experienced large increases in their market cap over the past five years as shareholders buy into the same promise that prompted the increase in headcount,” EP Vantage said.
Edwards, however, defies that generalization. Its recent market value was $10.4 billion, while Endologix’ market capitalization came in at about $906 million.
Elizabeth Cairns, the report’s author, shared more thoughts on volume hirers in an e-mail interview. Cairns said volume medical device hirers are more likely to grow by acquisition because “they already have many marketed technologies and have the money to buy other companies, adding large numbers of staff swiftly.”
“However, they also hire organically too, particularly when they have new product launches coming up,” Cairns said.
Overall, “the story in medtech employment over the course of 2013 is one of slow and steady growth, enlightened by a handful of dramatic mergers and divestments,” the report said.
EP Vantage’s report also looked at the top 15 medical technology companies and their employee numbers in terms of their ranks by market value at the end of last year.
Only three of those companies cut their headcounts last year. Two of those, Abbott Laboratories and Covidien PLC, dropped because they spun off their drug businesses.
“Big medtech seems to be getting purer,” EP Vantage said.
Many of those companies have Orange County operations, including Johnson & Johnson; Chicago-based Abbott and Baxter International Inc.; Minnesota-based Medtronic Inc. and St. Jude Medical Inc.; and Covidien, which operates from Mansfield, Mass., along with Natick, Mass.-based Boston Scientific Corp.
Baxter, which has 300 local workers and is the former parent of Edwards, increased its job count by the greatest proportion in the last year, according to EP Vantage.
It added the jobs mainly through a $4 billion deal last year for Gambro AB, a Stockholm-based maker of devices used for kidney dialysis. The buy added 8,000 workers to Baxter’s rolls.
But EP Vantage said Baxter will turn in the other direction when it comes to its employee base.
“It will lose weight in the future: Baxter intends to spin off its biotechnology operations and its vaccines business. However, this will not affect the jobs numbers until the divestments conclude in calendar 2015,” EP Vantage’s report said.
Hires Signal Health?
The consulting firm cautioned that job growth “does not necessarily correspond to a healthy company” and pointed to Sunnyvale-based device maker Intuitive Surgical Inc. as an example of such, even though Intuitive added 430 jobs from the end of 2012 through the end of 2013, an 18% growth rate.
“Intuitive Surgical has been the subject of falling sales and reports that its suite of Da Vinci robotic surgery systems are less safe and certainly less cost-effective than standard operations performed by human surgeons,” the report said.
Covidien and Boston Scientific also turned up in the top 10 firers over the past five years. EP Vantage’s report showed Covidien cut 3,200 jobs during that period and that Boston Scientific slashed 1,800 positions.
