When it comes to regenerative medicine, Integra LifeSciences is integral to the healing process. Using its proprietary collagen matrix technology, the firm makes biological implants (including grafts and wound dressings) for brain, spine, and other orthopedic surgeries that eventually become part of a patient's body, helping it to generate new bone, tissue, and nerves to replace damaged elements. In addition, Integra makes surgical equipment, including bone fixation devices, spinal fixation systems, tissue ablation equipment, and drainage catheters used in neurosurgery and orthopedic reconstruction, as well as basic surgical instruments. Its products are marketed worldwide through direct sales and distributors.
Integra gets a majority of its sales from its orthopedic segment and its neurosciences segment, each accounting for about 40% of sales; nearly one-third of those segment revenues come from regenerative medicine supplies. Traditional medical instruments such as surgical forceps, scopes, lights, and retractors account for about 20% of revenues.
The company's products are intended mainly for niche markets not targeted by larger medical device firms. Most of Integra's orthopedic products, for instance, are designed for orthopedic reconstruction of the extremities such as the feet and ankles (rather than the hip and knee replacement products offered by the likes of Zimmer and DePuy). However, the company has reached those larger and more diverse markets through a select number of original equipment manufacturer deals with firms such as Medtronic and Zimmer.
Integra has several specialty sales forces that market its products directly throughout the US. Its Integra Orthopedics businesses sell to orthopedic and spinal surgeons, while its Integra NeuroSciences unit targets neurosurgeons and intensive care doctors at hospitals and surgery centers. The Integra Medical Instruments sales force markets the company's medical and surgical instruments (primarily under the Jarit, Luxtec, and Miltex brands) to hospitals, clinics, and dental and veterinary offices. The company also has direct sales representatives in Canada and several European and Asia/Pacific countries, and it utilizes independent distributors in certain markets.
Integra has expanded its operations over the years through both acquisitions and product research and development efforts. It has expanded both its product lines and geographic reach through some 40 acquisitions since its formation, including recent additions of direct distribution assets in Australia and the UK. In 2011 the company expanded its product line through purchases of SeaSpine, which makes hardware and biologics for spinal fixation procedures, and Ascension Orthopedics, which makes implants for extremity repair procedures. R&D efforts in recent years aim to produce enhanced orthobiologic spinal devices, bone grafts and fixation systems, dural repair grafts, and monitoring and ablation systems.
As a result of its growth efforts and string of acquisitions, the company implemented a number of cost-cutting measures. For instance, Integra consolidated certain US distribution and manufacturing facilities, eliminated redundant positions, and realigned certain marketing activities during 2010 and 2011, while at the same time upgrading its manufacturing capacity for its lucrative regenerative medicine offerings. Integra continues to evaluate its operations for cost-cutting opportunities.
Integra's internal growth and external expansion efforts have allowed it to increase revenues each year over the last decade, including a 7% rise in sales to some $780 million in 2011. This increase was largely due to increased orthopedic sales, primarily attributed to the added products from acquisitions and increased sales of regenerative medicine products. However, profits (which had increased in several previous years) were cut in half in 2011 as net income dropped to some $28 million due to an increase in expenses from acquisitions, restructuring efforts, IT infrastructure changes, and executive compensation.
Director and company founder Richard Caruso owns about 25% of the company. – less