07.28.10
$2.5 Billion
KEY EXECUTIVES:
Jeffrey R. Binder, President and CEO
Daniel P. Florin, Sr. VP and Chief Financial Officer
Glen A. Kashuba, Sr. VP, President of Biomet Trauma and Biomet Spine
Gregory W. Sasso, Sr. VP, President of Biomet SBU Operations
Maggie Anderson, Sr. VP, President of Biomet 3i LLC
Jon C. Serbousek, Sr. VP, President of Biomet Orthopedics LLC
Bradley J. Tandy, Sr. VP, General Counsel and Secretary
Roger P. Van Broeck, Sr. VP, President of Biomet Europe, Middle East and Africa
Robert E. Durgin, Sr. VP, Quality, Regulatory and Clinical Affairs
Robin T. Barney, Sr. VP, Worldwide Operations
Sujata Dayal, Corporate VP and Chief Compliance Officer
NO. OF EMPLOYEES: 3,548
GLOBAL HEADQUARTERS: Warsaw, Ind.
Over the past year, Biomet Inc. President and CEO Jeffrey R. Binder has been quite a forceful critic of the healthcare reform efforts taking place in the nation’s capital. He is particularly bothered by the medical device excise tax included in the final version of the new law, and he hasn’t been shy about making his feelings known.
“The tax would create the worst of all possible situations: escalating costs on the newest technology and reduced capital to invest in jobs and R&D,” Binder wrote last fall in his blog on the company’s website.
With the central role research and development has played in Biomet’s transformation from an eight-member company with $17,000 in first-year net sales to a $2.5 billion leader in the manufacture of orthopedic implants, Binder’s discontent certainly is well-founded. The company has released 900 new products over the last 10 fiscal years; an additional 100 are expected to launch during fiscal 2010 (which began June 1).
Since the start of fiscal 2007 (which began June 1, 2006), Biomet has spent a total of $295.3 million on research and development. Throughout the company’s history, R&D funding has resulted in the development of dozens of profitable products for Biomet, including the AGC Total Knee System (1983), Maxim Total Knee System (1993), Mallory-Head Modular Calcar Revision Series (1996), M2a-Taper Acetabular Hip System (2000), Vanguard Complete Knee System (2004) and the Oxford Partial Knee (2005). In 2007, the Oxford knee captured 54 percent of the U.S. market share and became the world’s most widely-used knee implant, according to the company.
In fiscal 2009 (ended May 31, 2009), new products and more established devices helped drive revenue, generating $2.5 in total sales. Gross profit jumped 27 percent to $1.6 billion, while R&D funding grew 13.7 percent to $93.5 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for fiscal 2009 was $926.4 million, or 37 percent of sales, compared with adjusted EBITDA of $829.1 million, or 34.8 percent of sales for fiscal 2008, an increase of 12 percent.
Three out of four products sold by Biomet in fiscal 2009 were reconstructive devices such as hip or knee implants, extremity systems such as the Absolute Comprehensive Shoulder System and Total Evolutive Shoulder System, and dental reconstructive products. These devices contributed a total of $1.8 billion to Biomet’s bottom line, a 17 percent increase compared with the $1.5 billion the privately held company garnered in fiscal 2008 from the sale of reconstructive devices.
Among the new reconstructive devices Biomet introduced in fiscal 2009 were the Regenerex Primary Tibial Tray and the E1 Antioxidant Infused Technology Tibial Bearings. The bearings, according to the company, are made from Vitamin E-infused highly crosslinked polyethylene, which is designed to provide strength and oxidative stability for improved wear characteristics.
Fixation products—including electrical stimulation systems, bone substitute materials and items such as nails, plates, screws, pins and wires—were popular but contributed only a fraction of revenue to total sales compared with reconstructive devices. In fiscal 2009, fixation product sales amounted to $234.1 million, a 15 percent increase compared with the $203.2 million those products earned for Biomet in fiscal 2008.
Spinal product sales experienced the largest growth in fiscal 2009, rising 21.3 percent compared with the previous fiscal year. Total sales of these products (bone substitute and allograft
materials, precision-machined allograft and motion preservation devices) came to $222.1 million. To address a growing interest in minimally invasive spinal procedures, Biomet launched two new products in fiscal 2009—the Ballista Percutaneous Pedicle Screw Placement System and the AccuVision Minimally Invasive Access System. The AccuVision system, according to company literature, features a retractor frame and a series of blades, shims and retractor modules that provide surgeons with better access to bones.
Sales of other products, including arthroscopy devices and orthopedic support systems such as back and knee braces, wrist and forearm splints, cervical collars, slings and ankle supports, contributed $196.9 million, a 16 percent increase compared with the $169.6 million these items earned for Biomet in fiscal 2008.
The company posted double-digit sales increases domestically and internationally in fiscal 2009, with U.S. sales bringing in $1.5 billion, a 22.1 percent increase compared with the previous fiscal year. International sales garnered $264.5 million, a 21 percent jump compared with the $219.4 million the company posted in fiscal 2008. European sales rose a modest 7.2 percent to $711.7 million, according to Biomet’s fiscal 2009 annual report.
The year was not without controversy, though. Last spring, executives disclosed that the firm was facing several federal investigations over its bone growth stimulation devices. According to a filing with the U.S. Securities and Exchange Commission (SEC), federal prosecutors in West Virginia and Massachusetts investigated the sale and marketing of bone growth stimulation devices manufactured by the company’s EBI unit in Parsippany, N.J. The unit makes osteogenesis and bone growth stimulation devices that enhance the regeneration of bone in post-surgical patients.
Biomet settled lawsuits brought by 24 of 27 plaintiffs over the Ionic Spine Spacer System and its SpF and OsteoGen implants. The suits claimed a single surgeon at a West Virginia hospital implanted the devices in more than 120 patients during a six-month stint at the hospital and 27 of the patients either were misdiagnosed, harmed or died as a result. Biomet admitted no wrongdoing in the settlements, which are being kept confidential.
A subpoena from the Boston, Mass.-based U.S. attorney’s office is related to another whistle blower lawsuit, filed in March 2005. In that complaint, the owner of a Missouri medical billing company claimed several spine companies, including Biomet, were improperly billing bone-growth stimulators as devices that must be purchased, rather than rented.
In addition to the Massachusetts investigation, Biomet also faces a probe by New Jersey’s attorney general over potential financial ties between the company and doctors running its clinical trials. “Medical device makers have a duty to make certain that clinical trial results are accurate and unbiased,” Anne Milgram, former attorney general for the Garden State, said in issuing subpoenas last May to five major medical device manufacturing companies seeking information about their business practices.
Biomet’s legal woes infiltrated its European division as well. In January 2009, German precious metals and technology firm Heraeus Kulzer GmbH sued Biomet and its subsidiary, Biomet Europe BV, claiming the both the company and its subsidiary “misappropriated” Heraeus Kulzer trade secrets while developing a new line of European bone cements. The suit seeks roughly $44 million in damages and asks court officials to stop Biomet from producing its current line of European bone cements.
KEY EXECUTIVES:
Jeffrey R. Binder, President and CEO
Daniel P. Florin, Sr. VP and Chief Financial Officer
Glen A. Kashuba, Sr. VP, President of Biomet Trauma and Biomet Spine
Gregory W. Sasso, Sr. VP, President of Biomet SBU Operations
Maggie Anderson, Sr. VP, President of Biomet 3i LLC
Jon C. Serbousek, Sr. VP, President of Biomet Orthopedics LLC
Bradley J. Tandy, Sr. VP, General Counsel and Secretary
Roger P. Van Broeck, Sr. VP, President of Biomet Europe, Middle East and Africa
Robert E. Durgin, Sr. VP, Quality, Regulatory and Clinical Affairs
Robin T. Barney, Sr. VP, Worldwide Operations
Sujata Dayal, Corporate VP and Chief Compliance Officer
NO. OF EMPLOYEES: 3,548
GLOBAL HEADQUARTERS: Warsaw, Ind.
Over the past year, Biomet Inc. President and CEO Jeffrey R. Binder has been quite a forceful critic of the healthcare reform efforts taking place in the nation’s capital. He is particularly bothered by the medical device excise tax included in the final version of the new law, and he hasn’t been shy about making his feelings known.
“The tax would create the worst of all possible situations: escalating costs on the newest technology and reduced capital to invest in jobs and R&D,” Binder wrote last fall in his blog on the company’s website.
With the central role research and development has played in Biomet’s transformation from an eight-member company with $17,000 in first-year net sales to a $2.5 billion leader in the manufacture of orthopedic implants, Binder’s discontent certainly is well-founded. The company has released 900 new products over the last 10 fiscal years; an additional 100 are expected to launch during fiscal 2010 (which began June 1).
Since the start of fiscal 2007 (which began June 1, 2006), Biomet has spent a total of $295.3 million on research and development. Throughout the company’s history, R&D funding has resulted in the development of dozens of profitable products for Biomet, including the AGC Total Knee System (1983), Maxim Total Knee System (1993), Mallory-Head Modular Calcar Revision Series (1996), M2a-Taper Acetabular Hip System (2000), Vanguard Complete Knee System (2004) and the Oxford Partial Knee (2005). In 2007, the Oxford knee captured 54 percent of the U.S. market share and became the world’s most widely-used knee implant, according to the company.
In fiscal 2009 (ended May 31, 2009), new products and more established devices helped drive revenue, generating $2.5 in total sales. Gross profit jumped 27 percent to $1.6 billion, while R&D funding grew 13.7 percent to $93.5 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for fiscal 2009 was $926.4 million, or 37 percent of sales, compared with adjusted EBITDA of $829.1 million, or 34.8 percent of sales for fiscal 2008, an increase of 12 percent.
Three out of four products sold by Biomet in fiscal 2009 were reconstructive devices such as hip or knee implants, extremity systems such as the Absolute Comprehensive Shoulder System and Total Evolutive Shoulder System, and dental reconstructive products. These devices contributed a total of $1.8 billion to Biomet’s bottom line, a 17 percent increase compared with the $1.5 billion the privately held company garnered in fiscal 2008 from the sale of reconstructive devices.
Among the new reconstructive devices Biomet introduced in fiscal 2009 were the Regenerex Primary Tibial Tray and the E1 Antioxidant Infused Technology Tibial Bearings. The bearings, according to the company, are made from Vitamin E-infused highly crosslinked polyethylene, which is designed to provide strength and oxidative stability for improved wear characteristics.
Fixation products—including electrical stimulation systems, bone substitute materials and items such as nails, plates, screws, pins and wires—were popular but contributed only a fraction of revenue to total sales compared with reconstructive devices. In fiscal 2009, fixation product sales amounted to $234.1 million, a 15 percent increase compared with the $203.2 million those products earned for Biomet in fiscal 2008.
Spinal product sales experienced the largest growth in fiscal 2009, rising 21.3 percent compared with the previous fiscal year. Total sales of these products (bone substitute and allograft
materials, precision-machined allograft and motion preservation devices) came to $222.1 million. To address a growing interest in minimally invasive spinal procedures, Biomet launched two new products in fiscal 2009—the Ballista Percutaneous Pedicle Screw Placement System and the AccuVision Minimally Invasive Access System. The AccuVision system, according to company literature, features a retractor frame and a series of blades, shims and retractor modules that provide surgeons with better access to bones.
Sales of other products, including arthroscopy devices and orthopedic support systems such as back and knee braces, wrist and forearm splints, cervical collars, slings and ankle supports, contributed $196.9 million, a 16 percent increase compared with the $169.6 million these items earned for Biomet in fiscal 2008.
The company posted double-digit sales increases domestically and internationally in fiscal 2009, with U.S. sales bringing in $1.5 billion, a 22.1 percent increase compared with the previous fiscal year. International sales garnered $264.5 million, a 21 percent jump compared with the $219.4 million the company posted in fiscal 2008. European sales rose a modest 7.2 percent to $711.7 million, according to Biomet’s fiscal 2009 annual report.
The year was not without controversy, though. Last spring, executives disclosed that the firm was facing several federal investigations over its bone growth stimulation devices. According to a filing with the U.S. Securities and Exchange Commission (SEC), federal prosecutors in West Virginia and Massachusetts investigated the sale and marketing of bone growth stimulation devices manufactured by the company’s EBI unit in Parsippany, N.J. The unit makes osteogenesis and bone growth stimulation devices that enhance the regeneration of bone in post-surgical patients.
Biomet settled lawsuits brought by 24 of 27 plaintiffs over the Ionic Spine Spacer System and its SpF and OsteoGen implants. The suits claimed a single surgeon at a West Virginia hospital implanted the devices in more than 120 patients during a six-month stint at the hospital and 27 of the patients either were misdiagnosed, harmed or died as a result. Biomet admitted no wrongdoing in the settlements, which are being kept confidential.
A subpoena from the Boston, Mass.-based U.S. attorney’s office is related to another whistle blower lawsuit, filed in March 2005. In that complaint, the owner of a Missouri medical billing company claimed several spine companies, including Biomet, were improperly billing bone-growth stimulators as devices that must be purchased, rather than rented.
In addition to the Massachusetts investigation, Biomet also faces a probe by New Jersey’s attorney general over potential financial ties between the company and doctors running its clinical trials. “Medical device makers have a duty to make certain that clinical trial results are accurate and unbiased,” Anne Milgram, former attorney general for the Garden State, said in issuing subpoenas last May to five major medical device manufacturing companies seeking information about their business practices.
Biomet’s legal woes infiltrated its European division as well. In January 2009, German precious metals and technology firm Heraeus Kulzer GmbH sued Biomet and its subsidiary, Biomet Europe BV, claiming the both the company and its subsidiary “misappropriated” Heraeus Kulzer trade secrets while developing a new line of European bone cements. The suit seeks roughly $44 million in damages and asks court officials to stop Biomet from producing its current line of European bone cements.