Volcano creates its own sound and light show to get your heart's blood flowing. The company develops, manufactures, and sells medical imaging devices for cardiovascular care and other specialties. Its products include intravascular ultrasound (IVUS) and fractional flow reserve (FFR) consoles and imaging catheters that provide information about the condition of arteries as well as plaque and lesions. Its functional management (FM) consoles and single-use pressure and flow guidewires measure characteristics of blood around plaque in arteries. Volcano sells its products to physicians, hospitals, and other health care providers worldwide through a direct sales force and distributors.
Volcano also operates an industrial segment through its Axsun Technologies subsidiary. The unit, which makes up only about 3% of sales, makes lasers and optical engines used in OCT imaging systems and is responsible for Volcano's activities in the telecommunications market, where Axsun sells spectrometers and optical channel monitors to telecom firms.
The US accounts for about half of the company's sales, and Japan brings in about 30%; other markets include Europe and South Africa, where Volcano employs direct sales employees. The company uses independent distributors to sell its products in the Middle East, the rest of Asia, and other regions. With more than 6,800 consoles installed at facilities worldwide, Volcano is working to expand its distribution network in emerging markets. In recent years sales in Japan have seen significant growth, thanks in part to its contractual relationship with Johnson & Johnson, which distributes Volcano's IVUS products there. Volcano gets more than 80% of its medical segment revenues from sales of its single-use disposable catheters and guidewires used with its IVUS and FM systems.
The company makes continuous improvements on its products (especially its top-selling IVUS systems), hoping to improve the diagnosis of heart conditions and take advantage of the growing trend of using minimally invasive surgical treatment procedures. As part of a development program that aimed to allow the company's products to network with interventional devices made by other manufacturers, Volcano has developed an IVUS console (s5i) customized for use in cardiac catheterization laboratories in hospital surgery suites.
Along with in-house research and development, Volcano grows through acquisitions, such as the 2010 purchase of Fluid Medical, a company that develops imaging technology for use in various structural heart applications including mitral valve repair. Fluid Medical's technology is being used to develop a Forward-Looking Intra-Cardiac Echo, or FLICE, catheter to expand Volcano's minimally invasive structural heart applications. The $4 million purchase also enhances the company's suite of visualization products.
To further grow its interventional cardiology development pipeline, the company purchased IVUS technology firm Novelis for $12 million in 2008. Novelis' development-stage FLIVUS technology widened Volcano's product applications in minimally invasive heart procedures.
By acquiring marketing rights to the Xtract line of thrombus aspiration catheters from private medical device firm Lumen Biomedical in 2010, the company expanded into the clot removal market. Through similar acquisitions and development efforts, Volcano aims to offer diagnostic and treatment options for a wide range of vascular conditions.
Volcano's strategy includes building its sales and marketing infrastructure to market to physicians and PCI (percutaneous interventional) procedure technicians in hospitals as well as to personnel who make purchases for hospitals.
Over the past three years Volcano's revenues have increased year-over-year from about $228 million in 2009 to $343.5 million in 2011. This was mainly driven by increased product sales, most notably a 44% increase in its FFR single-procedure disposables and a 34% jump in sales to Japan. The company's operating income exceeded $25 million for fiscal 2011, continuing its run of profitability for the second consecutive year. – less