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The top 30.

The word "normal" is a relative term. Civilized societies have used it for centuries to describe any type of activity, behavior, emotion, habit or trait that its members deem common or appropriate. Normal has no universal representation; it has long maintained a chameleon-like tendency to assimilate easily into its surroundings. Over the last several years, "normal" has transformed itself quite effectively (and drastically, some would argue) in the medical device sector, an industry built on equal parts of risk and innovation. Since the start of the Great Recession, "normal" has taken on a vast array of different meanings. It now describes the dried-up capital markets, the pricing pressures, and the tough regulatory landscape facing major medtech manufacturers. It also defines the stock market's chronic bipolar disorder and the economy's feeble recovery efforts. Such a confluence of "new normal" realities is forcing device manufacturers to rely on some unconventional methods for long-term growth.

Rather than foster expansion solely through innovative technologies, companies increasingly are turning to acquisitions and emerging markets to secure their futures. Many of the companies in this year's report made significant investments in other parts of the world to boost sales in 2011 or created their own venture capital programs to invest in promising new technologies. Baxter International Inc., for instance, formed Baxter Ventures as a means to enhance its early stage product pipeline and ultimately turn high-potential concepts into commercial reality'. "We are not going to go back to where we've come from," Mohamed A. El-Erian, CEO and co chief information officer of PIMCO, the Newport Beach, Calif. based global investment solutions provider best known for bond investing, warned during a 2009 global investment conference. "The notion should not be, 'Is this recession going to be over?' [The notion] should be, 'What does the new normal look like when the system stabilizes?'"

Chances are it will look anything but normal.

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1. Johnson & Johnson

$25.8 Billion ($65B total)

KEY EXECUTIVES:

Alex Gorsky, CEO & Chairman, Executive Committee

Dominic J. Camso, VP, Finance & CFO

Karen A. Licitra, Chairman, Global Medical Solutions Group

Gary J. Pruden, Chairman, Global Surgery Group

Jesse J. Wu, Chairman, Consumer Group

Joaquin Duato and Paul Stoffels, M.D., Chairmen, Pharmaceuticals Group

Douglas K. Chia, Corporate Secretary & Assistant General Counsel

Stephen J. Cosgrove, Corporate Controller & Chief Accounting Officer

John A. Papa, Treasurer

Michael H. Ullmann, VP, General Counsel, Executive Committee

Andrew Ekdahl, President, DePuy Orthopaedics

NO. OF EMPLOYEES: 117,900 (total)

GLOBAL HEADQUARTERS: New Brunswick, N.J.

No profession has mastered the art of the comeback quite like the business world. Some of the most inspirational entrepreneurial rebirths have been hatched by the likes of Frederick W. Smith, the founder, president, chairman and CEO of FedEx, who bounced back from a failed 1984 attempt at electronic mail distribution to grow his core delivery business into a $40 billion empire, and Donald Trump, the outspoken, big-thinking real estate mogul who climbed out of a $4.4 billion bankruptcy hole in the early 1990s to reclaim his spot among the planet's richest inhabitants (Forbes recently estimated his worth to be nearly $3 billion). Of course, these and other corporate comeback tales pale in comparison to perhaps the greatest reincarnation in business history: that of Steve Jobs, the cold, often controlling Apple Computer visionary who was fired from his own struggling company in 1985 only to resurrect it more than a decade later through creative thinking, savvy business moves (that $150 million investment from rival Microsoft was pure genius) and cornering the market on all gadgets named "i."

Though it has none of the fairy tale-like attributes of Jobs' return to glory, the comeback fable penned last year by healthcare con glomerate Johnson & Johnson is nonetheless impressive, particularly in light of the company's recent series of costly missteps.

Worldwide sales at the New Brunswick, N.J.-based firm reached $65 million last year, a 5.6 percent increase compared with the $61.5 billion J&J generated in 2010. Adjusted earnings rose 4.4 percent to $13.9 billion, while adjusted earnings per share climbed 5 percent to $5, according to the company's 2011 annual report.

"Several years ago, we set out to build on our strong foundation and sustain our track record of growth, even as we prepared to address a daunting challenge: the patent expirations for two of our major drugs, Risperdal (risperidone) and Topamax (topiramate). We also prepared ourselves for other market issues to which we had a good line of sight," former Board Chairman/CEO William C. Weldon told shareholders in a farewell letter published within the company's 2011 annual report. The 63-year-old retired in April 2012 after spending a decade as chief executive; he was succeeded by Alex Gorsky, a former army captain and endurance athlete who had led the firm's Medical Devices & Diagnostics (MD&D) business unit since 2009.

"Additional developments could not be as easily foreseen: the severe economic decline; the tightening of consumer spending and healthcare budgets; over-the-counter (OTC) product quality issues at McNeil Consumer Healthcare and the recall of the DePuy ASR Hip System," Weldon's letter continued. "Our company was severely tested. As 2011 came to a close, we moved through a turning point. The headwinds from patent expirations, tough portfolio choices, litigation matters and OTC product quality issues had been, or were being addressed ... We have turned the corner on a particularly difficult period."

J&J may indeed have turned a corner on a difficult past, but its future is far from trouble-free. The 2010 ASR recall promises to haunt the company for quite some time, thanks to thousands of civil lawsuits that eventually could cost the firm billions of dollars in legal settlements. Lawsuits also are piling up over the Pinnacle Acetabular Cup System, an ASR model predecessor that was approved by the U.S. Food and Drug Administration (FDA) in 2000. The Pinnacle was designed to have more flexibility and range of motion than previous hip implants, but studies have shown it to be prone to early failure. In fact, studies have proven that all-metal implants such as the Pinnacle, the ASR XL Acetabular and the ASR Hip Resurfacing systems can cause severe pain and lead to implant dislocation, which ultimately necessitates revision surgery.

J&J's DePuy Orthopaedics Inc. franchise has acknowledged a 13 percent failure rate with its ASR implants, more than quadruple the average 0.5-3 percent failure rate found in most implants currently on the market. Such high failure rates, as well as the ASR recall and those of other defective metal implants, prompted the FDA to conduct a two-day expert advisory panel meeting in June 2012 to evaluate the overall safety of metal-on-metal devices.

Despite two 12-hour sessions, the advisory panel reached no formulative conclusions. "Metal-on-metal, ceramic-on-ceramic and metal-on-ceramic are unforgiving couples," Michael B. Mayor, M.D., of Dartmouth Medical School's Thayer School of Engineering, told his fellow panel members. "They all show evidence of impact loads delivered by the edge of the acetabular component onto the surface of the head in the form of edge stops and gouges. Those are fairly severe alterations of articular surface."

Still, all the brouhaha over the ASR recall (93,000 worldwide, including 37,000 in the United States) and controversy over the efficacy of all-metal implants affected DePuy's 2011 revenue. J&J reported a 4 percent rise in DePuy franchise sales last year but acknowledged the unit was buoyed by sales from its Mitek sports medicine and trauma product lines as well as newly-acquired merchandise from its $480 million acquisition of Micrus Endovascular Corporation in 2010. DePuy folded Micrus Endovascular into its Codman & Shertleff Inc. business to compliment its existing line of neuro devices, which includes bare platinum coils, vascular reconstruction devices and access devices. Micrus Endovasonlar added enhanced bioactive coils and new technologies to improve the treatment of ischemic stroke and aneurysms to the Codman & Shertleff portfolio.

DePuy introduced several new products to the market last year in an attempt to offset its ASR recall woes, sagging hip and knee sales, pricing pressures and shrinking reimbursement rates. In February, the franchise received FDA approval for its Reclaim Revision Femoral Hip System and Gription TF titanium foam implants.

The Reclaim system features various sizing options and a modular design that can help restore function. The product, according to DePuy, combines advances in strength, fixation and instrumentation to optimize both the surgical and clinical experience during moderate to complex hip revision surgery.

The company's highly porous Gription implants are made from commercially pure titanium, a strong, corrosion-resistant metal with high surface roughness and a similar elasticity to bone. The Gription TF Acetabular Augment System fills gaps between the acetabulum (hip bone) and cup in patients with severe bone defects, while the Universal Gription Cones are used in knee replacement surgery to enhance missing bone in the tibia] or femoral areas.

Over the summer, DePuy unveiled the Trumatch Personalized Solutions instruments and computer software system for its Sigma Fixed-Bearing Knee system. The company's Trumatch technology uses the software and computed tomography scans to create customized femoral and tibial cutting blocks that better match patients' bone surfaces. The Trumatch system also reduces the amount of time it takes to conduct knee replacement procedures, company executives claim.

Despite its litany of challenges last year, DePuy was the top revenue-generating franchise in Johnson & Johnson's MD&D unit, one of three operated by the multinational firm. With $25.8 billion in sales, the MD&D unit is the world's largest medical device business, permeating dozens of sectors within the comprehensive market. Sales for the year ended Dec. 31 grew 4.8 percent, though operational sales growth came in at 1.7 percent and operating profit fell 36.4 percent to $5.2 billion, according to the company. Executives attributed the sharp dropoff in profit to the ASR recall, restructuring expenses, increased investment spending and costs associated with the historic $19.7 billion buyout of Synthes Inc., a move that is likely to reinvigorate J&J's struggling orthopedics business and is consistent with the company's strategy of acquiring businesses with leading positions in promising markets.

The deal, first announced in April 2011, is J&J's largest acquisition to date, easily surpassing the $16.6 billion merger with the consumer health arm of Pfizer Inc. in 2006.

West Chester, Pa.-based Synthes, which manufactures spine and bone-replacement products, is expected to help J&J significantly expand its presence in the $5.5 billion global orthopedic reconstruction industry as well as in emerging markets, an area the firm particularly is targeting for growth. Last year, Synthes reported $424.4 million in sales in the Asia Pacific region, up 19 percent compared with 2010.

To receive regulatory approval of the deal in Europe, J&J agreed to sell DePuy's trauma segment to Warsaw, Ind.-based Biomet Inc. for $280 million.

J&J completed the acquisition in mid-June and shortly thereafter integrated Synthes into its corporate structure, creating the DePuy Synthes Cos. of Johnson & Johnson. A pop-up message on Synthes' website enlightens visitors to the new entity: "Introducing the new DePuy Synthes Companies," the electronic note reads. "Inspired by listening carefully to what patients and healthcare professionals have to say. United for greater ingenuity. Committed to superior quality. Driven to make a sizable impact on orthopedic and neurological care. We are the new DePuy Synthes Companies and we are ready to advance patient care by delivering total solutions that go beyond the products themselves to help improve people's lives."

J&J bigwigs expect the Synthes merger to slightly boost company profit this year and significantly improve 2013 earnings by 10 cents to 15 cents per share (excluding special items). The company estimates the deal to cost $1.1 billion in after-tax charges for the remainder of 2012, including restructuring and integration expenses.

The Synthes purchase was one of several strategic portfolio decisions undertaken by J&J last year to increase profit. One choice that caught many industry pundits by surprise was the company's decision to end the manufacturing of its Cypher and Cypher Select Plus drug-coated heart stents, used to prop open clogged arteries. It was a bittersweet move for J&J--leaving its stent business forced the company to close two factories (in Cashel, Ireland, and San German, Puerto Rico), cut hundreds of jobs and incur $500 million to $600 million in restructuring charges, but it was a necessary one nonetheless, according to analysts. Over the last few years, J&J has lost ground to Abbott Laboratories and Boston Scientific Inc. in the $4 billion global stent market. The company's Cordis Corporation subsidiary sold $627 million in drug-coated stents in 2010, a 31.7 percent decrease compared with the $919 million in stent sales it generated in 2009 and a staggering 76 percent tumble from 2006, when the firm sold $2.62 billion in stents, according to data compiled by Bloomberg.

"Cordis has been a leader in establishing many markets, including diagnostic and guiding catheters, bare metal and drug-eluting stents, carotid stenting, and treatment of peripheral vascular disease and arrhythmias," Cordis Group Chairman/Worldwide Chairman Seth Fischer said when the decision was announced last spring. "[But] due to evolving market dynamics in the drug-eluting stent business, we see greater opportunities to benefit patients and grow our business in other areas of the cardiovascular device market."

Late last winter, Cordis launched the Sleek OTW Catheter, a new transluminal angioplasty balloon device designed to help prevent lower-limb amputation in patients with end-stage peripheral arterial disease, also known as critical limb ischemia. The Sleek OTW catheter features a small crossing profile that helps doctors reach small arteries between the knee and foot; its various sizes (diameters of 1.25 millimeters to 5 millimeters and lengths up to 220 millimeters) allow physicians to treat the disease with fewer inflations.

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Cordis followed up the Sleek catheter launch with FDA approval of its Exoseal Vascular Closure device, a product that has been available in Europe, Asia and Latin America since June 2010. The device features a bioabsorbable plug that closes the femoral artery puncture site with minimal or no inflammation and is fully reabsorbed by the body within 60-90 days.

Such innovative vascular technologies, however, could not reverse a 10.3 percent sales slide in the MD&D unit's Cardiovascular Care franchise. Revenue totaled 2.2 billion, with drug-eluting stent sales comprising 11 percent, or less than half of its 2010 total of 25 percent.

J&J's Vision Care franchise sustained the most robust growth of MD&D's seven divisions, rising 8.8 percent to 2.91 billion in 2011. Executives attributed the growth to higher sales of its 1-Day ACUVUE and astigmatism lenses in both Asia Pacific and Europe.

Revenue was similarly healthy in the Ethicon franchise, where sales jumped 8.2 percent to $4.8 billion. Higher suture sales in emerging markets, hearty demand for its Physiomesh and Securestrap products (introduced to the market in the fall of 2010) and growth in the biosurgical, Women's Health and Urology and Acclarent product lines contributed to the increase in that division, according to the company.

Ethicon's Securestrap provides surgeons with several advantages when performing hernia repair procedures, including two fixation points to straddle mesh pores and fibers; excellent holding strength when deployed at different angles, and secure mesh fixation during tissue integration. The Securestrap device also minimizes patients' exposure to bacteria and other foreign material on internal organs.

The Physiomesh product is a lightweight and partially-absorbable polypropylene mesh that stretches to closely match the abdominal wall. The large pore construction allows for excellent parietal tissue integration, while the poliglecaprone 25 transparent film serves as a tissue separation barrier to minimize visceral attachments.

Diabetes care devices continued to perform well for J&J in 2011, generating $2.6 billion in sales, a 7.4 percent increase compared with its 2010 tally. J&J executives credited the growth to the company's OneTouch product line.

Though its 6.8 percent growth rate was among the lowest of Johnson & Johnson's seven franchises, the Ethicon Endo-Surgery division ranked second in total revenue last year, posting $5.08 billion in revenue. Robust sales of advanced sterilization and Harmonic ultrasonic products contributed to the increase, but total growth was negatively impacted by the divestiture of the unit's breast care business in the third quarter of 2010.

There's a good chance that divestiture will have little effect on 2012 sales figures. Last fall, the franchise acquired privately held SterilMed Inc., a Maple Grove, Minn.-based firm that reprocesses and repairs medical devices, including various probes, patient monitors, forceps, diagnostic catheters, laparoscopic instruments and cannula sets. Its customers include the Cleveland Clinic, Duke University in Durham, N.C., and Tenet Healthcare, a large, investor-owned healthcare delivery system. Four years ago, SterilMed merged with The Scope Exchange, an endoscope sales and service company based in Greensboro, N.C.

After flying under the radar practically since its 1997 founding, SterilMed received some recognition last year in a New York Times article on the growing dilemma of excessive medical waste generated by healthcare facilities--a problem that can be solved in part by increased device reprocessing. Along with Phoenix, Ariz.-based Ascent Health care Solutions, the two companies perform roughly 95 percent of device reprocessing in the United States, the Times reported.

SterilMed has become part of J&J's Ethicon Endo-Surgery franchise and is managed as such but it operates as a standalone company under its own name.

Besides the SterilMed purchase, Ethicon Endo-Surgery's 2012 revenue also is likely to benefit from the FDA clearance of its Enseal G2 Curved and Straight Tissue Sealers products, a line of devices designed to help surgeons achieve strong vessel seals while remaining gentle on tissue in both open and minimally invasive procedures. The portfolio of eight tissue sealer devices includes four shaft lengths and options for both curved and straight jaws. The entire Enseal G2 Tissue Sealer line, according to J&J, helps surgeons achieve uniform compression, better control temperature and minimize thermal spread.

Lower sales of donor screening products cut into MD&D's Ortho-Clinical Diagnostic revenue last year, but the franchise nevertheless managed to increase sales by 5.4 percent to $2.1 billion. Growth primarily stemmed from strong demand for the company's Vitros 5600 and 3600 analyzers.

"Over the past few years, we have navigated steadily through a series of significant challenges, keeping a long-term perspective, maintaining a disciplined approach to managing our investments for growth and our portfolio of broadly based businesses, and staying true to our operating model and values," Weldon said in his annual shareholder letter. "Though we continue to face difficult and uncertain macroeconomic conditions, our ongoing investments have us well positioned to grow and increase our market leadership ..."

2. GE Healthcare

$18.1 Billion ($147.3B total)

KEY EXECUTIVES:

Jeffrey R. Immelt, Chairman & CEO, General Electric

John Dineen, President & CEO, GE Healthcare

Marcelo Mosci, President & CEO, GE Healthcare Americas

Tom Gentile, President & CEO, Healthcare Systems

Reinaldo A. Garcia, President & CEO,

GE Healthcare International

Jim Davis, VP & General Manager, Global MR

Mark Vachon, President and CEO, Global Diagnostic Imaging

Jan De Witte, President and CEO, Integrated IT Solutions

Kieran Murphy, President and CEO, Life Sciences

Pascale Witz, President and CEO, Medical Diagnostics

Joe Shrawder, President and CEO, Surgery

NO. OF EMPLOYEES: 46,000 (304,000)

GLOBAL HEADQUARTERS: Fairfield, Conn.

To say that multinational industrial giant General Electric (GE) is a prolific innovator with a global focus would be an understatement. It seems as if the company--whether you're talking about jet engines to lift the world's largest passenger planes or lights that give New York City's Times Square its famous glow--is motivated by the relentless pursuit of creating the proverbial "better mousetrap." That creative inspiration fuels the conglomerate's Healthcare division's pursuits as well.

The company, as usual, posted a string of new technology in the sectors the Healthcare division (based in the United Kingdom) serves--medical imaging and information technologies, medical diagnostics, and patient monitoring systems, as well as others.

Among the new product rollouts for the 2011 fiscal year (ended Dec. 31) was the Mavric SL, a magnetic resonance (MR) imaging technique for imaging the joints of patients with metallic implants, in response to a growing clinical need for assessing soft tissues in the vicinity of joint replacements (called arthroplasty in surgical lingo) and metallic instrumentation. The technology was developed in collaboration with Stanford University and the Hospital for Special Surgery in New York, N.Y.

"The ability of MR to image tissues adjacent to metal implants and fixation hardware is significantly hampered by severe image artifacts," said Jacques Coumans, general manager of Premium MR at GE Healthcare. "Mavric SL is designed to help reduce these artifacts as the number of procedures requiring MR imaging near metal continues to grow."

Combining acquisition and reconstruction techniques, the system is intended to help reduce artifacts caused by the presence of metal in both in-plane and through-plane dimensions compared to conventional MR imaging techniques. The information may be useful in helping physicians to image tissue adjacent to the metal instrumentation and take action to correct complications from joint implants.

GE Healthcare also unveiled what it claims is the first interventional X-ray system designed to capture the advantages of both floor- and ceiling-mounted systems. The Discovery IGS 730 is neither floor- nor ceiling-mounted, but enables full patient access without the need to suspend the system above the patient. It has the mobility of a C-arm with the power and image quality of a fixed system. This laser-guided, motorized mobile gantry creates an interventional environment without boundaries. It allows complete access to the patient and unlimited parking capability, while creating sterility for a flexible and secure operating room environment, according to the company. The unique gantry comes with a new wide bore design, which allows for steep angles and ease of use in 3-D acquisition, especially for large patients. The C-arm is mounted on an advanced guided vehicle (AGV), a motorized and fully mobile system. Based on laser guidance, the AGV can move freely from imaging position to parking or back-out positions, using predefined trajectories to provide total patient access.

Another noteworthy product release was the Mini Telemetry System, which received 510(k) clearance by the U.S. Food and Drug Administration (FDA). The system addresses the growing demand for mobility during labor. It is designed to enable a more ambulatory experience for the mother and increase caregiver efficiency, while ensuring continuous monitoring. Among its features are audio monitoring of fetal heart rate via either transmitter speaker or headphones; compact size; one-touch marking of the baby's movements; and multiple monitoring modes: fetal heart rate, uterine activity and ECG monitoring.

The FDA also cleared the Optima CT660 lower-dose computed tomography (CT) system for fast, high performance imaging for patients in a variety of clinical settings, including cardiac, neurological, emergency room and routine CT; the AngioViz imaging system for vascular anatomy; the GEM (Geometry Embracing Method) Suite of surface coils designed for use with the Optima MR450w 1.5T wide bore magnetic resonance imaging system that helps technologists reposition patients less often and cover more anatomy; and the Optima MR430s 1.5T musculoskeletal magnetic resonance system for imaging of the arm, including the elbow, wrist and hand, or the leg, including the knee, ankle and foot.

In a move that surprised many in the medical device industry, GE moved the headquarters of its 115-year-old X-ray business to Beijing to tap growth in China. The headquarters will move from Waukesha, Wis., amid a broader parent-company plan to invest about $2 billion across China, including opening six "customer innovation" and development centers. The company said no jobs were cut as a result. The move followed the introduction earlier in 2011 of GE Healthcare's "Spring Wind" initiative to develop and distribute medical products and services in China. More than 20 percent of the X-ray unit's new products will be developed in China. The division expects double-digit growth rates as China converts from film and analog to digital X-ray technology. About $1.1 billion of GE Healthcare's sales came from the China market in 2010. The company wants to keep its leading position in providing medical devices targeted at higher-end Chinese customers, and also break into China's growing market for primary health care, a key goal of the Chinese government's healthcare reform plans. To do that, GE Healthcare plans to boost China-based re search, enabling it to introduce at least 20 products for the local market during the next three years.

With a multi-billion dollar division such as GE Healthcare, you can bet that acquisitions also are part of the mix. They certainly were in fiscal 2011.

In April the company acquired the assets of privately held Steady State Imaging, a Minneapolis, Minn.-based company that develops novel magnetic resonance imaging technology. Terms of agreement were not disclosed. Through that acquisition, GE Healthcare expanded its current advanced technology portfolio with the addition of the University of Minnesota's sweep imaging with fourier transform (SWIFT) method, which allows the visualization of tendons, ligaments and other tissues not normally seen using conventional imaging methods. The SWIFT method has gained interest among MRI researchers for its potential for imaging in areas near the lungs and other parts of the body where conventional MRI is not typically effective.

"The fact that a startup company based on University of Minnesota technology is being acquired by an industry leader like GE Healthcare is tremendous news," said Tim Mulcahy, vice president for research at the University of Minnesota. "This not only helps fulfill our mission of moving researcher inventions to the public domain as quickly as possible, it also validates the innovative work of ... the University's Center for Magnetic Resonance Research."

Also in April, GE acquired Issaquah, Wash.-based Applied Precision Inc., a supplier of cellular imaging technologies for the fast-growing cell biology and biomedical research sectors. The acquisition of Applied Precision will allow GE Healthcare to expand its offering of products and services for pharmaceutical and life-science research. Applied Precision develops and manufactures high-resolution and super-resolution microscopy instruments with software and data visualization tools that provide scientists with detailed information on the structure and behavior of live and fixed cells.

During the year, GE renewed its collaborative relationship with STERIS Corp. to continue offering interventional suites optimized with products from both companies. Combining the companies' technologies provides physicians with a unified system for imaging and surgical procedures in integrated and hybrid operating rooms. The relationship brings together GE Healthcare's Innova imaging systems for single plane with custom-designed high-definition 360-degree suites from STERIS featuring LED surgical grade lighting, video-switching and visualization systems, and equipment management solutions. The two companies will collaborate to facilitate room planning and installation for seamlessly integrated interventional suites tailored to the precise needs of each facility.

In December, GE Capital (the company's financial services division) and GE Healthcare invested in C8 MediSensors Inc., a privately held developer of non-invasive continuous glucose monitors for diabetic patients. The investment was made through the GE Healthymagination Fund, an equity fund that makes investments in highly promising healthcare technology companies. The investment is aligned with GE Healthcare's expanding focus on disease management solutions that can improve healthcare globally, as well as GE's broader healthymagination initiative, which focuses on reducing cost, increasing patient access and improving quality in healthcare. Financial terms of the transaction were not disclosed. As many as 552 million people, or about 1 in 10 adults worldwide, could have diabetes by 2030, according to a recent report by the International Diabetes Federation. Additionally, as many as 183 million people may be unaware that they have diabetes, according to the report, and the highest proportion of cases is among those ages 40 to 59. C8 MediSensors has combined their proprietary technology with Raman spectroscopy to commercialize a non-invasive glucose monitor that can improve the lives of diabetics by giving them a continuous view of their glucose levels without the pain, inconvenience and high cost of invasive glucose monitoring. MediSensors is pursuing the European market before seeking regulatory approval in the United States.

The 2011 fiscal year also brought executive transition.

GE Healthcare promoted Kieran Murphy to succeed current Life Sciences president and CEO Peter Ehrenheim who retired. Murphy was GE Healthcare's head of Global Commercial Operations, Life Sciences. Kieran joined GE upon its acquisition of Whatman pig where he was CEO, in 2008. Ehrenheim retired after a career with the company beginning in 1983 as a mechanical designer in R&D with Pharmacia, which was acquired in 1997 by Amersham International. In 2003 Peter was appointed to the Amersham executive team and upon its acquisition by GE in 2004, he was promoted to vice president and CEO, Life Sciences.

Jan De Witte who was serving as president and CEO of GE Healthcafe's Performance Solutions division, also was named president and CEO of its Healthcare IT business. De Witte, who reports to GE Healthcare President and CEO John Dineen, succeeds Vishal Wanchoo who was named senior vice president of Growth Initiatives for GE India. De Witte was named head of Performance Solutions in June 2010. He has served in a number of strategic technology and business leadership roles since he joined GE in 1999. He has a diverse background in services, digital business strategy, supply chain, manufacturing, quality and Lean Six Sigma. De Witte graduated from the Katholieke Universiteit Leuven in Flanders, Belgium, with a Master's of Science Degree in Electro-Mechanical Engineering, and earned his MBA from Harvard Business School.

GE's healthcare division also gained some executive leadership from its highly successful aviation unit. GE Aviation's Tom Gentile joined Healthcare as president and CEO of Healthcare Systems. Mike Swinford was named president and CEO of a new Global Services business. Gentile was vice president of GE Aviation's Services division. He succeeded Omar Ishrak, who left GE to lead Medtronic Inc. as CEO. Gentile was a 13-year GE veteran and recently spent three years leading a team that transformed GE's Aviation services business into a global $7 billion platform. Before Aviation, he held a series of leadership roles in GE Capital's businesses in the United States, France and Australia, overseeing key acquisitions, consumer product launches and driving profitable growth. Gentile earned his bachelor's degree in economics and his MBA from Harvard University, and studied international relations at the London School of Economics. Swinford was services leader for GE Healthcare's North American division. His new role puts him at the helm of Global Services, a new business that will be responsible for driving GE Healthcare's service strategy globally, creating new service growth platforms across product lines and expanding the capabilities of each region's service operations. He has held a series of services, quality and supply chain leadership roles in GE Healthcare. He joined the company in 1992 through the Manufacturing Management Program and holds a bachelor's degree in electrical engineering from the University of Missouri-Rolla.

But what was the result of all this innovation and corporate machination? Increased revenue, of course. GE's Healthcare division revenues were $18.1 billion in 2011, an increase of $1.2 billion, or 7 percent, due to higher volume and the weaker U.S. dollar. The revenue increase was split between equipment sales and services. Revenue increased in the United States and international markets, with the strongest growth in emerging markets. Segment profit of $2.8 billion in 2011 increased 2 percent, or approximately $100 million.

For GE, full-year revenues were $147.3 billion, up 7 percent. Full-year net earnings were $14.2 billion in 2011 ($1.23 per common share), compared with $11.6 billion in 2010, up 22 percent.

Did You Know?

According to the American Academy of Orthopedic Surgeons, between 1990 and 2002, the number of primary arthroplasty procedures in the United States increased by 62 percent for total hip replacements and by 195 percent for total knee replacements. During the same period, the number of revision procedures (surgical replacement of problematic joint prostheses) increased by 79 percent for hips and 192 percent for knees. The need for arthroplasty revision is accelerating significantly due to the increased frequency of primary arthroplasty procedures and the younger ages at which the procedures are being performed. It is estimated that by 2030, arthroplasty revisions in the United States will increase from 2005 levels by 137 percent for hips and 601 percent for knees.

3. Siemens Healthcare

$17 Billion ($100B total)

KEY EXECUTIVES:

Peter Loscher, President & CEO, Siemens AG

Hermann Requardt, President & CEO, Siemens Healthcare

Michael Sen, CFO, Siemens Healthcare

Gregory Sorensen, M.D., CEO, Siemens Healthcare, United States

Tom Miller, CEO, Customer Solutions, Siemens Healthcare

Michael Reitermann, CEO, Siemens Healthcare, Diagnostics

Bernd Montag, CEO, Siemens Healthcare, Imaging & Therapy Systems

Norbert Gaus, CEO, Siemens Healthcare, Clinical Products

Barbara Kux, Head of Supply Chain Management & Chief Sustainability Officer

NO. OF EMPLOYEES: 51,000 (360,000)

GLOBAL HEADQUARTERS: Munich, Germany

The picture for Siemens' four Healthcare Sector divisions (Clinical Products, Customer Solutions, Imaging & Therapy Systems, Clinical Products and Diagnostics) was "mixed," according to company reports.

Strong development in the imaging business contrasted with "operative challenges" in the diagnostics business. Revenue and new orders were slightly above levels for 2010, at $17 billion and roughly $18 billion, respectively. Sector profit doubled to roughly $1.8 billion, thanks in large part to stronger imaging performance. Thirty-six percent of sales came from Europe, C.I.S. (Commonwealth of Independent States comprising countries of the former Soviet Union), Africa and the Middle East; 42 percent from the Americas; and 22 percent from Asia and Australia. By far, the largest single national market for Healthcare is the United States, with 35 percent of external revenue for the Sector during fiscal 2011.

Across all the company's divisions--from lighting and home appliances to automation and drive technology--Siemens ended fiscal 2011 (Sept. 30, 2011) with record operating results. Total sectors profit climbed by 36 percent (in euros) to $12.4 billion, and income from continuing operations increased by nearly two-thirds to approximately $9.5 billion. Revenue and new orders also increased. Revenue from continuing operations grew 7 percent (in euros) to approximately $100 billion; new orders rose 16 percent to $116 billion.

For Healthcare, there were a number of new technology rollouts for the year.

One of the most significant introductions from Siemens was in the area of medical imaging. According to the company, the Biograph mMR is world's first whole-body scanner to fully integrate magnetic resonance imaging (MRI) and positron emission tomography (PET) in one system. The systems first received CE Mark in Europe in December 2010 and then got clearance from the U.S. Food and Drug Administration (FDA) in June 2011. While MR provides detailed morphological and functional details in human tissue, PET goes further to investigate the human body at the level of cellular activity and metabolism. The system has the potential to identify neurological, oncological and cardiac conditions of disease and support the planning of appropriate therapies. Because MRI does not emit ionizing radiation, Biograph mMR may provide an added benefit with lower-dose imaging. The Biograph mMR also creates opportunities for research, such as the development of new biomarkers or new therapeutic approaches.

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"Biograph mMR is the latest breakthrough innovation of Siemens in the field of diagnostic imaging. It will be a new instrument for driving personalized medicine forward," said Walter Maerzendorfer, CEO of the Magnetic Resonance business unit at Siemens Healthcare.

Siemens also garnered a number of other important FDA wins in FY11. A few of the standout items are detailed here.

The company's computed tomography (CT) iterative reconstruction algorithm SAFIRE, which stands for Sinogram Affirmed Iterative Reconstruction, received FDA clearance. The system is made up of image reconstruction software and hardware to allow for a reduction of radiation dose in CT examinations. Additionally, the use of projection raw data during the iterative image improvement process enables a reduction of subtle image artifacts and therefore a further improvement in general image quality. According to Siemens, SAFIRE helps users reduce dose by up to 60 percent compared to previous filtered back projection techniques. The system's fast reconstruction speed of 20 images per second enables reconstruction of a typical high-resolution thorax examination of 30 centimeters in just 15 seconds.

"From a clinical perspective, SAFIRE helps to significantly reduce radiation exposure across the whole portfolio of clinical applications and continues to demonstrate Siemens' commitment to deliver the best possible patient care at the lowest possible radiation dose," said Elliot Fishman, M.D., CT section chief of radiology at Johns Hopkins Medical Institutions in Baltimore, Md., and a member of the SIERRA (Siemens Radiation Reduction Alliance) dose expert panel.

Also 510(k) cleared by the FDA was the Mobilett Mira, the company's first mobile digital X-ray system with a wireless detector. The Mira's wireless capability facilitates examinations of patients with limited mobility, and its rotating swivel arm is designed for easier use by clinical staff.

"The process of having an X-ray can be stressful for patients with mobility challenges. The Mobilett Mira addresses that challenge with its ability to move to wherever the patient is most comfortable," explained Gerhard Schmiedel, vice president, X-ray Products, Siemens Healthcare." At the same time, the new rotating swivel arm is an important benefit for radiologists and technologists, giving them more flexibility to access patients and capture high-quality images with greater ease."

Mobile X-ray systems frequently are used when patients cannot be moved to an X-ray room--for example, when they are in the intensive care unit. Until now, a mobile unit's X-ray detector was connected to the system via a data cable that could lengthen the exam process, cause patient discomfort, and hamper the imaging efforts of clinical staff. With the Mobilett Mira, the advantages of mobile X-ray imaging are combined with the flexibility of a wireless detector.

On the leadership front, Siemens Healthcare appointed Gregory Sorensen, M.D., CEO of Siemens Healthcare in the United States, succeeding Randy Hill, who served as interim CEO. Sorensen also oversees the Canadian activities of Siemens Healthcare. He began in June 2011.

He's responsible for leading the marketing, sales, service, and support functions for Siemens Healthcare in the United States, based at the company's headquarters in Malvern, Pa. Sorensen served as Professor of Radiology and Health Sciences & Technology at Harvard Medical School; he was a faculty member of the Harvard-MIT Division of Health Sciences and Technology, and a co-director of the A.A. Martinos Center for Biomedical Imaging at Massachusetts General Hospital. Sorensen is a practicing neuroradiologist and active researcher with significant experience in clinical care, clinical trials, and translational research.

"Dr. Sorensen is well known in the industry for his innovative research on medical imaging and for his expertise in clinical practice. It is a great privilege for me to welcome him to Siemens Healthcare," said Tom Miller, CEO,, Customer Solutions, Siemens Healthcare Sector.

4. Medtronic

$15.9 Billion

KEY EXECUTIVES:

Omar Ishrak, Chairman and CEO

Michael J. Coyle, Exec. VP & Group President, Cardiac and Vascular Group

Christopher J. O'Connell, Exec. VP & Group President, Restorative Therapies Group

Richard Kuntz, M.D., M.Sc., Sr. VP & Chief Scientific, Clinical and Regulatory Officer

Stephen N. Oesterle, M.D., Sr. VP, Medicine and Technology

H. James Dallas, Sr. VP, Quality and Operations

NO. OF EMPLOYEES: 40,000

GLOBAL HEADQUARTERS: Minneapolis, Minn.

When CEO Art Collins retired after six years at the helm of Medtronic Inc. in 2007, the buzz, of course, was out who would replace him. Two top internal candidates certainly were in the running. One was Michael DeMane, president of Medtronic's spine business at the time, and the other was Chief Operating Officer Bill Hawkins. Hawkins was viewed as a steady hand as part of the company's leadership team. DeMane was more of an aggressive maverick, whose drive for growth brought with it some legal and regulatory scrutiny (he later moved on to spine company Lanx Inc. as CEO in 2010 and then to spine stimulation firm Nevro Inc. in 2011).

As anyone who follows the industry knows, Hawkins won out, but his tenure of less than five years was relatively short-lived compared with his predecessors. He retired a little after the end of the company's fiscal year (Medtronic's fiscal cycle is earlier than most. Fiscal 2011 ended on April 29, 2011). It wasn't that Hawkins was unprepared, but he took the helm during uncertain times. He tried to make the company more efficient--making key acquisitions and divestitures--but Wall Street remained unimpressed. During his tenure, Medtronic stock fell from around $54 to $37 (though that period includes the Great Recession). The company also had to deal with some legal wrangling over faulty defibrillator leads and issues with its Infuse bone graft product. Medtronic also is a company in transition. It's a mature firm, and its pacemaker and implantable cardioverter defibrillator businesses aren't the growth drivers they used to be.

Medtronic looked outside the company for its next chief executive. They found him at GE Healthcare. Omar Ishrak, former CEO of GE Healthcare Systems, became Medtronic's CEO in June 2011. During Ishrak's 16-year tenure with Chalfront, St. Giles, United Kingdom-headquartered GE Healthcare, he also served as senior vice president of GE Corp. and was a member of the GE Corporate Executive Council. The company experienced significant growth in clinical systems and ultrasound devices; revenues for the Clinical Systems Division almost doubled from 2004 to 2009, reaching approximately $5 billion. Revenues in the ultrasound business grew from $400 million in 1998 to $1.8 billion in 2010. Ishrak, who is a member of the board at the Blood Center of Wisconsin and a member of the Health Leadership Council of the Save the Children Foundation, previously held senior and management roles at Philips Ultrasound, Diasonics Inc. and Elbit Ultrasound Group. He holds a bachelor's degree and a Ph.D. in electrical engineering from the University of London, King's College.

"I am honored and excited to have the opportunity to lead Medtronic--a great company with a renowned, mission-based heritage of saving and improving lives," Ishrak said. "I look forward to working with the Medtronic team to continue to advance the company as a global healthcare leader."

The company hopes that Ishrak will be the new product marketing whiz that he was with GE and that he'll be aggressive about pursuing new markets at home and abroad, particularly in developing countries.

As the new CEO grabbed the reins, Medtronic posted KY11 revenue Of $15.9 billion, an increase of I percent as reported or an increase of 2 percent after adjusting for $12 million of favorable foreign currency impact and approximately $200 million of revenue benefit from the extra week in the first quarter of fiscal year 2010. Net earnings were $3.1 billion, which was fiat, or $2.86 per diluted share, an increase of 3 percent.

International revenue of $6.8 billion grew 6 percent both as reported and after adjusting for a $12 million favorable foreign currency impact and the benefit of the extra week in fiscal year 2010. International revenue represented 43 percent of total company revenues for the year. Strong market sales were reported in China, India and Latin America. Company executives reported that" steady growth" across most businesses and geographies was offset by "challenging dynamics" in the U.S. implantable cardiac defibrillator (ICD) and spinal markets. Starting in the first quarter of fiscal year 2011 the firm began to operate under two reportable segments and two operating segments, the Cardiac and Vascular Group (composed of the Cardiac Rhythm Disease Management [CRDM], CardioVascular, and Physio-Control businesses--Physio-Control was sold to Bain Capital during fiscal 2012 for $487 million) and the Restorative Therapies Group (composed of the Spinal, Neuromodulation, Diabetes, and Surgical Technologies businesses).

The Cardiac and Vascular Group at Medtronic reported worldwide sales of $8.5 billion, which was flat compared with 2010. Group performance was driven by double-digit sales growth in AF (atrial fibrillation) Solutions, Coronary and Peripheral, Structural Heart, and Endovascular, and offset by declines in CRDM implantables. The implantable cardioverter defibrillator (ICD) market slowdown in the United States partially was offset by the performance of the Protecta ICD, which had strong sales in Europe and was approved by the U.S. Food and Drug Administration (FDA) late in the fourth quarter of 2011. The FDA also approved the Revo MRI SureScan pacing system, designed for use in a magnetic resonance imaging environment.

The Restorative Therapies Group reported worldwide sales of $7.4 billion, which increased 2 percent. Within the group, spinal sales totaled $3.4 billion (core spinal revenue was $2.5 billion, while biologics sales were $884 million), down 2 percent. Neurovascular sales were $1.6 billion, up 2 percent. Diabetes-related sales were $1.3 billion, up 9 percent. Surgical technologies were up 8 percent to $1 billion.

In April 2011, Medtronic combined its U.S. Cardiac and Vascular Group sales functions into a single, unified cross-divisional sales organization, effective at the start of Medtronic's new fiscal year, May 1, 2011. David Roberts, formerly vice president of sales for the Cardiac Rhythm Disease Management business at Medtronic, assumes the leadership of this new 2,700-person organization as the national vice president, Cardiac and Vascular Group Sales. The Cardiac and Vascular Group of businesses at Medtronic operates across 15 cardiovascular market segments.

"Our Cardiac and Vascular Group of businesses have historically focused primarily on clinicians as the primary decision makers for medical device selection for their patients," said Michael Coyle, executive vice president and group president of the Cardiac and Vascular Group of businesses at Medtronic." With the growing partnership between clinicians and administrators as they work together to address the changing healthcare environment, our strategy going forward is to leverage Medtronic's breadth of talent, technologies, products and services across our 15 market segments to help hospital administrators address their unmet needs, while maintaining and strengthening our ability to serve clinicians and their patients. This new leadership strategy and structure uniquely positions Medtronic as the only medical device company capable of doing both."

Among the acquisitions in FY2011, Medtronic bought privately held Ardian Inc., a developer of catheter-based therapies to treat hypertension and related conditions. The purchase price was $800 million in cash up front, plus additional cash payments equal to annual revenue growth through the end of Medtronic's 2015 fiscal year. Medtronic had previously invested in Ardian and, prior to completion of the acquisition, held an 11.3 percent ownership stake in the company. Ardian's flagship product, the Symplicity catheter system, addresses uncontrolled hypertension through renal denervation, or ablation of the nerves lining the renal arteries. It received the CE Mark and Australia's Therapeutic Goods Administration listing, but is not yet approved by the U.S. Food and Drug Administration (FDA) and is undergoing clinical trials prior to FDA approval. Acquiring Ardian offers Medtronic the opportunity to lead the development of renal denervation for the treatment of uncontrolled hypertension. The acquisition augments Medtronic's existing interventional therapies and complements the company's expertise in catheter design and ablation technologies. Hypertension is the leading attributable cause of death worldwide (see the Datawatch column on page 46). It is a significant, escalating global healthcare problem affecting approximately 1.2 billion people and is associated with an increased risk of heart attack, stroke, heart failure, kidney disease and death. Hypertension is estimated to have a direct cost to the global healthcare system of more than $500 billion annually.

In a move to expand biologics product offerings, Medtronic acquired Osteotech Inc. for $123 million.

"This acquisition is an important step in building a broader business in regenerative biologics," said Tom McGuinness, general manager of Medtronic's Biologics business. "The acquisition complements our bone healing portfolio and will expand our current presence in spine, orthopedic trauma and dental into new treatment areas including joint reconstruction, foot and ankle, sports medicine and neurosurgery."

Osteotech's product line includes Grafton demineralized bone matrix, and MagniFuse bone grafts and Plexur biocomposites, which are used in a broad range of musculoskeletal surgical procedures.

A number of new Medtronic products received the FDA nod in FY11.

The FDA approved Medtronic's Revo MRI SureScan pacing system designed for use in a magnetic resonance imaging (MR environment and approved as MR-Conditional. Shipments of Revo MRI will begin immediately. Until now, MRI procedures had been contraindicated for patients with implanted pacemakers due to the potential for serious adverse events. According to Medtronic, an estimated 200,000 pacemaker patients in the United States have to forgo MPd scans each year, which are critical for making a wide range of health diagnoses. As the population ages, the use of pacemakers is growing, with approximately 5 million patients worldwide who currently are implanted with a pacemaker or implantable cardioverter-defibrillator. At the same time, the use of MRI as a diagnostic tool is increasing, with approximately 30 million scans completed in 2007. People older than age 65 are twice as likely to need an MRI compared with younger patients, and between 50 and 75 percent of patients with electronic cardiac devices likely will need an MRI over their device's lifetime. Prior to the introduction of Revo MRI, pacemaker patients could face serious complications if they were exposed to the powerful magnetic fields generated by MRI machines, which can be as much as 30,000 times more powerful than the Earth's magnetic field. Complications to exposure could include interference with pacemaker operation, damage to system components, or a change in pacing capture threshold, which is the minimum amount of current required to evoke a cardiac contraction.

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The FDA gave its OK for Medtronic's InterStim therapy for bowel control. InterStim therapy, previously available to treat the symptoms of overactive bladder and non-obstructive urinary retention, now also is approved for the treatment of chronic fecal incontinence in patients who have failed or are not candidates for more conservative treatments. InterStim is a minimally invasive option proven to improve or restore bowel control in more than 80 percent of patients who received the therapy in a multi-center clinical trial, according to the company. The implantable system uses mild electrical stimulation of the sacral nerves to influence the behavior of the pelvic floor muscles and bowel. As a result, the therapy significantly reduced fecal incontinent episodes for a high percentage of clinical trial patients. The system consists of a thin wire lead and a neurostimulator, or pacemaker-like device, as well as external clinician and patient programmers. The technology originally was cleared by the FDA in 1997 for urinary urge incontinence.

Medtronic received FDA approval for the CD Horizon Legacy Spinal System for the treatment of adolescent idiopathic scoliosis (AIS), a condition that affects nearly 6 million people in the United States (1 million of those patients are children). Characterized by a side to side curvature of the spine, AIS usually develops in children older than 10; its cause currently is unknown. Medtronic's CD Horizon Spinal System consists of rods, hooks, and screws that are implanted in the spine to correct the curve. The system is available in multiple rod diameters and screw sizes so surgeons can choose the appropriate size based on a child's condition, anatomy, and activity level (3.5 millimeter rods most commonly are used in pediatric cases), according to the company's 510(k) application to the FDA. Doctors have used the CD Horizon Legacy Spinal System since 2004 in more than 500,000 surgeries. Medtronic applied for the 510(k) clearance to allow surgeons to use "pedicle screw-based constructs" to treat pediatric cases of AIS, the firm's application stated. Besides information about the system such as materials used and precise sizes of components, Medtronic provided the FDA with published clinical data of pediatric AIS patients treated with the CD Horizon pedicle screw instruments. The data included the results of more than 600 pediatric patients treated with pedicle screw constructs alone and more than 900 patients treated with a hybrid construct of both pedicle screws and hooks. David L. Skaggs, M.D., professor and chief of orthopedic surgery at the Children's Hospital in Los Angeles, Calif., said pedicle screws can help children retain their active lifestyles and possibly reduce the need for future surgeries. "Using pedicle screws in the treatment of adolescent idiopathic scoliosis gives my patients the best chance of correcting their spine and chest deformities, and preventing future surgeries," he said.

The company also resolved issues with two FDA warning letters. The agency sent two warning letters to the firm--one in November 2009 regarding the company's Mounds View, Minn., facility and another in June 2009 regarding its manufacturing facility in Juncos, Puerto Rico. Medtronic received an FDA warning letter following an August 2009 inspection of the company's MoundsView facility, which serves as the headquarters of the Cardiac Rhythm Disease Management business. The company also received an FDA warning letter following a December 2008 inspection of the company's facility in Juncos, which is a manufacturing location for the Neuromodulation, Diabetes and Cardiac Rhythm Disease Management businesses.

Medtronic officially opened the doors of its new manufacturing facility in Singapore in March 2011. The new site was built to respond to the future expected growth of cardiac devices in Asia. By the end of 2011, Medtronic invested more than $56 million to the development of its Singapore facility. Singapore also serves as the distribution hub for the Asia-Pacific region. The new facility, which began operations in January, was designed to enable Medtronic to respond more effectively and efficiently to the needs of customers and patients with cardiac rhythm disorders, improving standards of care in Asia.

Unrelated to the expansion in Singapore, Medtronic announced plans in February 2011 plans to reduce its workforce by 4-5 percent by the end of April the same year due to slower growth in some of the markets the company serves.

For fiscal 2012 (ended April 30), Medtronic posted gains. The company reported revenue of $16.2 billion, an increase of 3 percent on a constant currency basis after adjusting for a $273 million positive foreign currency impact or 4 percent as reported. Net earnings were $3.6 billion or $3.41 per diluted share, an increase of 17 percent and 19 percent, respectively.

5. Baxter International

$13.9 Billion

KEY EXECUTIVES:

Robert L. Parkinson Jr., Chairman & CEO

Philip L. Batchelor, Corporate VP, Quality

Michael J. Baughman, Corporate VP & Controller

Jean-Luc Butel, Corporate VP and President, International

Robert M. Davis, Corporate VP and President, Medical Products

Ludwig N. Hantson, President, Bioscience

Robert J. Hombach, Corporate VP & Chief Financial Officer

Norbert G. Riedel, Ph.D., Corporate VP & Chief Scientific Officer

NO. OF EMPLOYEES: 48,500

GLOBAL HEADQUARTERS: Deerfield, Ill.

The portrait is simply stunning. Far too striking, some might argue, for the cover of a corporate financial report. In the photograph, Kanyakom Piasukho smiles demurely amid Thailand's ancient rains, her head tilted slightly, her Hershey bar-colored hair and eyes bathed in a soft golden light.

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Piasukho's portrait truly would be better suited for the cover of a travel brochure. But it graces the front of Baxter International Inc.'s 2011 annual report, providing both inspiration to company leaders and insight to industry observers curious about the firm's commitment to overseas markets.

Piasukho was diagnosed with chronic nephritis in infancy and experienced acute kidney failure in 2009. As she awaits a kidney transplant, the Bangkok resident undergoes peritoneal dialysis (PD), an alternative to traditional hemodialysis (HD) treatment that increasingly is becoming popular in countries with limited health care resources. Piasukho is one of thousands of Thailand residents who have taken advantage of the 4-year-old "PD First" policy, which encourages the use of peritoneal dialysis over in-center HD to expand access to treatment, enhance patients' quality of life, and control costs.

Response in Thailand to the government's PD First policy has been overwhelming. The number of PD patients in the southeast Asian kingdom grew 10-fold between January 2008 and Dec. 31, 2011; over the next five years, Baxter projects the total (which stood at 10,000 at the start of 2012) to skyrocket another 250 percent to 35,000.

Thailand's success with its PD First initiative has prompted neighboring Asian countries-including India, Malaysia, Taiwan and Vietnam--to evaluate similar policies to increase access to PD and manage the growing need for renal disease treatment among low-income patients within their borders. One of the most effective PD First programs exists in Hong Kong, where PD penetration encompasses about 80 percent of all dialysis patients (the city-state prioritized peritoneal dialysis as a treatment nearly 20 years ago).

Expansion of the PD First or a similar program in southeast Asia certainly would benefit Baxter, which increasingly has relied on the region for a good portion of its sales. In 2011, Asia-Pacific net sales totaled $2.1 billion, roughly one-sixth of the $13.9 billion in total revenue reported, according to the company's annual report. Asia Pacific sales have grown considerably over the last three years, jumping 16.2 percent in 2010 and 12.5 percent in 2011; Latin American/Canadian sales also rose during that same time period, but not as significantly-revenue in that region climbed 4.6 percent in 2010 and 11 percent last year.

Domestic sales have bounced around like a yo-yo since the Great Recession, falling a percentage point in 2010 but jumping 8.4 percent in 2011. European sales lagged behind all other regions, remaining flat in 2010 and climbing just 4.8 percent last year, Baxter's annual report indicates.

"Baxter's definition of success goes beyond sound financial performance," Chairman and CEO Robert L. Parkinson Jr. wrote in a letter to shareholders at the start of Baxter's 132-page annual report."It reflects a commitment to responsible corporate citizenship and a will to make a difference in communities around the world."

That commitment and desire to make a difference prompted the Deerfield, Ill.-based company to undertake several humanitarian efforts last year. Baxter shipped 70,000 units of saline solution and donated more than 4,000 units of intravenous (IV) solutions to northeast Japan after the deadly March 11, 2011, earthquake and tsunami. The company also sent 1.2 million containers of IV solutions to Thailand last fall to ensure that PD patients could still receive their therapy amid the worst flooding in recent memory. Flooding and mudslide victims in El Salvador, Guatemala, Honduras and Nicaragua received a helping hand from Baxter, too, as did Waterbury, Vt.-area residents left hobbled by a surprisingly powerful Eastern Seaboard hurricane.

Those humanitarian efforts, of course, benefitted Baxter as well by promoting customer/brand loyalty and securing a footprint in emerging markets. "We aid worthy causes around the world through volunteerism, product donations and financial support," Parkinson noted in his shareholder letter." Our ability to mobilize in times of crisis is matched by our focus on the long-term."

Such a steady focus likely helped the company grow its sales by 8 percent and its net income by 57.1 percent in the year ended Dec. 31, 2011. On an adjusted basis (excluding special items), Baxter's net income rose 4 percent, going from $2.4 billion in 2010 to $2.5 billion in 2011. Earnings per diluted share increased 8 percent to $4.31 from $3.98 in 2010.

A focus on long-term growth also was behind most all of the company's major decisions last year, from its creation of an equity program for early-stage drug development firms to its acquisitions.

One of the most interesting steps that Baxter took toward ensuring long term growth occurred with the mid-summer creation of Baxter Ventures, a $200 million investment project aimed at helping new companies develop therapies that complement the firm's existing product portfolio.

"Baxter's mission is to apply innovative science to develop therapies and medical technologies that save and sustain patients' lives," Parkinson said when the announcement was made in late July. "As the company's internal capabilities have advanced our late-stage pipeline, we have the capacity to further accelerate the early-stage development of essential therapies."

About a month after creating Baxter Ventures, the company further invested in its future by paying $380 million for Baxa Corporation and its portfolio of pharmacy technology products that increase the efficiency and safety of oral and IV dose preparation and delivery. The deal broadens Baxter's market leadership in nutrition and expands its presence in the pharmacy.

In mid-December, Baxter shelled out an additional $325 million for Synovis Life Technologies Inc., a St. Paul, Minn.-based provider of biological and mechanical products for soft tissue repair, including Peri-Strips Dry, Tissue-Guard and Veritas Collagen Matrix. The firm's portfolio also includes products used in head, neck and hand microsurgery such as the Coupler, Flow Coupler and Gem Microclip. These devices also are used to join small diameter vessels during autologous breast tissue reconstruction or to seal small blood vessels. The deal, according to executives, will help expand Baxter's presence in the soft tissue repair market, estimated to be worth $1.6 billion by 2016.

Baxter incorporated Synovis into its BioScience business segment, a unit that posted $6 billion in sales last year. The company restructured its reporting segments in 2011, combining its former Medication Delivery and Renal units to create a Medical Products business. The newly-created unit generated more than half of the company's 2011 sales, collecting $7.8 billion from global customers. The segment's net sales rose 9 percent in 2011 and 3 percent in 2010, with renal products garnering the most revenue for the unit.

Renal device sales were driven by gains in the number of global PD patients--particularly in emerging markets with historically underserved patient populations--but the growth was somewhat stunted by the loss of domestic PD patients to another company. Still, sales rose 6 percent to $2.5 billion.

Global injectable products earned $2 billion for Baxter in 2011, a 6 percent increase compared with the $1.8 billion those goods generated in 2010. Executives attributed the increase to strong sales of certain enhanced packaging products and growth in the firm's U.S. pharmaceutical partnering and international pharmacy compounding businesses.

Better pricing and higher demand for IV solutions and nutritional items helped Baxter's IV Therapies division collect $1.8 billion in sales last year, a 7 percent jump compared with 2010.

Infusion Systems, however, experienced the most robust growth of any division within the Medical Products business (except for the category dubbed "Other," which more than doubled its sales to $30 million), surging 38 percent in 2011 to $901 million. The company credited the expansion to increased sales of Sigma Spectrum infusion pumps and fewer charges relating to the damaging 2010 recall of its Colleague infusion pumps. Baxter executed its final Colleague recall plan through July 14, 2012, providing both service and support for customers still using the pump. The company incurred a special pre-tax charge of $400 to $600 million in Q1 2010 to cover the recall's cost. That charge lowered first-quarter revenue in 2010 by $213 million but favorably impacted total sales in 2011 by 33 percentage points.

Emerging market growth spared the Anesthesia product category from losing ground in 2011 and reversing two consecutive years of gains. The division posted a 2 percent rise in revenue to $537 million, but further gains were offset by lower U.S. demand for inhaled anesthetics as well as competitive pricing pressures for generic sevoflurane, a sweet-smelling, nonflammable highly fluorinated methyl isopropyl ether used to induce and maintain general anesthesia.

While not as powerful an engine for growth as the new Medical Products segment, Baxter's BioScience sector nevertheless delivered strong results last year, expanding 7 percent compared with 2010. Recombinants was the top revenue-generator with $2.2 billion in total sales, followed by plasma proteins with $1.4 billion in sales, antibody therapy with $1.5 billion in sales, regenerative products with $580 million in sales and "other" items, with $280 million in sales.

The "Other" product category was the only device class in either business segment to lose money in 2011. Strong sales of FSMEIMMUN, a tick-borne encephalitis vaccine, could not offset weak demand and low sales of the influenza vaccine (the 2011-2012 flu season began significantly later than normal last year and was remarkably mild in the United States, according to a World Health Organization review).

Regenerative medicine sales were driven by increased demand for surgical sealant products, including Floseal and Tisseel, while market adoption of Baxter's advanced recombinant therapy, Advate, was responsible for much of the recombinant products sales surge.

6. Philips Healthcare

$11.4 Billion ($29.2B total)

KEY EXECUTIVES:

Frans van Houten, President & CEO

Ron Wirahadiraksa, Exec. VP & Chief Financial Officer

Jim Andrew, Exec. VP & Chief Strategy and Innovation Officer

Deborah DiSanzo, CEO, Philips Healthcare

Ronald de Jong, Exec. VP & Chief Market Leader

Patrick Kung, Exec. VP & CEO, Philips Greater China

NO. OF EMPLOYEES: 37,955 (125,241)

GLOBAL HEADQUARTERS: Amsterdam, Netherlands

Royal Philips Electronics N.V. has always managed to stay n step with the pace of innovation. The Dutch company as the first to develop a commercial X-ray diffractometer (an instrument that analyzes material structure), and it introduced consumers to such electronic marvels as the compact audio cassette tape (1963), a combination portable radio/cassette recorder (marketed as a "radiorecorder" but now better known as the boom box), a home video cassette recorder (1972), and, together with Sony, the compact disc (1982), a format that eventually evolved into the DVD and later, Blu-ray.

Over the last several decades, Philips grew into a global design powerhouse, becoming one of the most coveted places for young engineers to work. Last year, the multinational firm celebrated a record-breaking number of international design awards, prompting Fortune magazine to compare the company's design prowess to both Apple and BMW.

Despite such ingenuity, however, Philips has lost some of its competitive edge in recent years. The global recession and ongoing European sovereign debt crisis is partly to blame for the setback--its lighting and healthcare divisions particularly have struggled as worldwide construction slowed and both consumers and governments have cut back on spending--but Philips also has conceded market share to rivals with more innovative ideas*

To help the 120-year-old company regain its past dominance across the globe, Philips executives launched a performance and change management program last year called "Accelerate!"

"With lack of consistent growth in recent years and lean, agile new competitors winning over customers, it was clear that we urgently needed to speed up in order to improve our performance and competitiveness," President/CEO Frans van Houten wrote in a letter to shareholders in the company's 2011 annual report." To this end ... we launched our Accelerate! program--the first step on our journey to unlock our full potential and seed the ground for our future success. Accelerate! aims to significantly boost profitable growth by stepping up meaningful innovation and competitiveness, expanding margins, driving productivity and reducing complexity and working capital.

"It is designed to ensure that we empower and strengthen our customer-facing teams to win profitable market share, that we reduce complexity costs and deliver our innovations faster and more efficiently along the end-to-end chain to the customer, that we drive performance with transparency and accountability for granular business/market plans," van Houten's letter continued. "And that we carry through our strategies with the resources and determination to win our critical market battles and achieve leadership in our chosen markets."

In accordance with its Accelerate! program, Philips executives announced a series of performance goals to be realized by the end of next year. Those goals included comparable sales growth (compound annual growth rate) of 4-6 percent, assuming real gross domestic product growth of 3-4 percent; a 12-14 percent return on invested capital; reported EBITA (earnings before interest, taxes and amortization) margins of 10-12 percent companywide, 15-17 percent for the Healthcare division, and 8-10 percent for both the Lighting unit and the Consumer Lifestyle division (excluding unrelated licenses).

The Healthcare unit is well within reach of its goal. Data from the annual report show the division achieved an EBITA of 12.9 percent for the year ended Dec. 31, 2011, a 0.9 percent slip from the 13.8 percent recorded in 2010 but more than 2 percentage points higher than 2009's EBITA. (Editor's note: Percentages reflect changes based on the local currency in which the financials were reported--in this case, the Euro--and do not take into account annual foreign currency exchange fluctuations. Dollar amounts were converted using the exchange rate on the last day of the reporting period.)

Healthcare was the top-grossing division for Philips last year, comprising more than one-third of the company's $29.2 billion (22.5 billion euros) in sales. Healthcare revenue has leveled off over the last three years, though, rising minimally from $11.2 billion (7.8 billion euros) in 2009 to $11.4 billion (8.8 billion euros) in 2011. Sales rose 0.8 percent compared with 2010, though the increase is larger (3 percent) when measured in euros.

Executives attributed last year's sales increase (regardless of the euro-dollar discrepancy) to higher sales in the Healthcare division's four business units: Imaging Systems, which includes X-rays, computed tomography (CT), magnetic resonance (MR), nuclear medicine and ultrasound imaging equipment, and women's health; Patient Care & Clinical Informatics, which comprises perinatal care, therapeutic care, hospital respiratory systems, and ventilation; Home Healthcare Solutions, which encompasses sleep management and respiratory care, medical alert services, remote cardiac services, and remote patient management; and Customer Services, which includes consultancy, site planning and project management, clinical services, Ambient Experience, and equipment maintenance and repair.

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Imaging Systems generated the most revenue last year, constituting 39 percent of the Healthcare division's total sales. Customer Services sales were responsible for 25 percent of total revenue, while Patient Care & Clinical Informatics and Home Healthcare Solutions brought up the rear with 22 percent and 14 percent of total sales, respectively.

Imaging Systems sales drivers included the Ingenuity TF PET/MR, the first new imaging modality introduced in a decade. The system, according to Philips, integrates the molecular imaging capabilities of positron emission tomography (PET) with the soft tissue contrast of MR, enabling the system to perform both standalone MR and hybrid PET/MR studies. This dual capability eliminates the need for multiple scanners, reduces throughput time and improves patient comfort (those undergoing the tests can remain on the same table for both scans).

Besides the PET/MR device, Philips also released a new Ingenuity CT platform last fall that provides low dose and high image quality. The Ingenia MR made its debut as well--company executives described that device as the "first digital broadband MR system" to deliver superior image quality and increase patient throughput by up to 30 percent.

Philips' Ambient Experience continued to infiltrate the globe in 2011, particularly in emerging growth pockets like the Middle East. The total number of locations with this Experience is close to 300, the company estimates.

The Ambient Experience takes patients on a multimedia ride, allowing them to personalize the lighting, projected images, and sounds in the examination or lab room. Themes are selected on a wireless touchscreen tablet and projected on both walls and ceilings and through TV screens, wrapping the user in a multi-sensory setting of his or her own choosing.

The company's female health portfolio received a significant boost with last summer's $100 million acquisition of Sectra AB's digital mammography business. The deal landed Philips basically all of Sectra Mamea AB, which reported roughly $20 million in sales in 2010. The purchase, however, did not include the Swedish firm's other female health products such as mammography PACS or RIS software.

The Sectra deal is expected to help Philips markedly expand its breast care portfolio. Currently, the company's digital mammography unit, the MammoDiagnost DR, is available only in Europe.

Other significant 2011 acquisitions include the purchase of Dameca, a Danish provider of anesthesia machines and operating room accessories, and a partnership with Natick, Mass.-based Corindus Inc. to jointly develop robotic-assisted systems for minimally invasive treatment of obstructed coronary arteries.

The Dameca purchase broadens Philips' anesthesia product portfolio, executives said, adding anesthesia machines, wall panels, pendant systems, flow meters, suction units and other accessories to the company's current lineup.

Philips' Patient Care & Clinical Informatics unit introduced a number of clinical decision support algorithms, telehealth applications, workflow tools and other innovative systems last year that most likely will contribute to increased sales in 2012. Included in the class of newcomers were the IntelliVue MX600, MXT00 and MX800 patient monitors, which give clinicians an expanded, real-time view of patients 'vital signs and a wealth of clinically relevant information from a hospital's intranet and applications, all on a single screen. Each device combines a highly configurable, widely scalable bedside patient monitor with an optional built-in personal computer. The monitor and PC operate concurrently and independently.

Another standout was the IntelliVue MX40 monitor, recognized as the best new product at the 2011 Military Smart Monitoring Summit. The wearable device, designed specifically for ambulatory patients, features a color touchscreen display that enables nurses and other healthcare providers to check patients' clinical status with the push of a button. The monitor also displays two channels of real-time waveforms, offers four different screen formats and has alarm settings, patient histories and vital trends built into its operating system, according to Philips.

The monitors, however, were not the only breakthrough products introduced by the Patient Care & Clinical Informatics division in 2011. The unit also pioneered telehealth applications to address customers' need to improve financial and clinical outcomes. Sisters of Mercy Health System in St. Louis, Mo., for instance, expanded its use of the Philips eICU telehealth program across four states and eight hospitals to support stroke victims with timely access to scarce stroke neurologists. The Sisters of Mercy planned to extend its use of the eICU program to 24 hospitals by the summer of 2012.

Philips' Home Healthcare Solutions division experienced a productive year as well. The unit introduced its medical alert service Lifeline Auto Alert to Japan to expand the company's presence in one of the world's most rapidly aging markets. Customized to the needs of Japanese patients and developed in close collaboration with Japanese hospitals, the Lifeline service offers seniors an easy-to-use personal response service that enables them to summon emergency help 24/7.

The company also invested considerably in emerging markets last year. Philips introduced Chest Pain Centers in China to help cardiologists better manage acute cardiovascular events, while the first imaging systems rolled off an assembly line at the company's Suzhou, China, facility. In addition, Philips expanded its value segment assets in Interventional X-ray Systems by setting up a greenfield healthcare research and development/manufacturing plant in Pune, India.

"We are still in the early stages of a multi-year transformation of our company," van Houten told shareholders." Accelerate! will drive granular execution of our plans and enable the necessary investments in innovation, people, systems, and markets to deliver profitable growth and return on invested capital. And we will reap the benefits of our new culture of entrepreneurship and accountability, and commitment to business excellence."

39,000

The number of registered trademarks owned by Royal Philips Electronics N.V.

7. Abbott Laboratories

$9.9 Billion ($39B total)

KEY EXECUTIVES:

Miles D. White, Chairman & CEO

Thomas C. Freyman, Exec. VP of Finance & Chief Financial Officer

John M. Capek, Ph.D., Exec. VP, Medical Devices

Edward L. Michael Exec. VP, Diagnostic Products

Robert B. Hance, Sr. VP, Vascular

Heather L. Mason, Sr. VP, Diabetes Care

James V. Mazzo, Sr. VP, Medical Optics

Brian J. Blaser, Sr. VP, Diagnostics

Corlis D. Murray, Sr. VP,, Quality Assurance,

Regulatory & Engineering Services

NO. OF EMPLOYEES: 90,000 (total)

GLOBAL HEADQUARTERS: Abbott Park, Ill.

This is the last year that Abbott Laboratories will be on the MPO Top 30 list in its current form. The big news announced by the company toward the end of the 2011 fiscal year (ended Dec. 31) was that it was splitting into two publicly traded companies, separating its medical products business from its research-based pharmaceuticals operations.

The medical products company will consist of Abbott's genetic pharmaceutical, devices, diagnostic and nutritional businesses, and will keep the Abbott name. The research-based pharmaceutical firm, on the other hand, will include proprietary pharmaceuticals as well as biologics, and will be rebranded. The announcement came in October.

The medical products business generates about $22 billion in annual revenue, according to Abbott estimates. The portfolio for this newly-formed company will comprise branded genetic drugs sold outside the United States, adult and pediatric nutritional products, core laboratory diagnostics, point-of-care and molecular diagnostics, vascular devices (including the top-selling Xience heart stent), vision care products and medical systems that diagnose and treat diabetes. Executives expect the company to generate nearly 40 percent of its sales in "high-growth emerging markets."

The research-based pharmaceutical company, by contrast, will focus on various specialty drugs in such areas as immunology, multiple sclerosis, chronic kidney disease, Hepatitis C, oncology and women's health.

Current Abbott Chairman and CEO Miles D. White will remain chairman and CEO of the medical products company, while Richard A. Gonzalez, currently Abbott's executive vice president of Global Pharmaceuticals, will become chairman and CEO of the research=based pharmaceuticals business. Gonzalez is a 30-year Abbott veteran who previously served as president and chief operating officer of the Abbott Park, Ill.-based healthcare conglomerate.

The split should completed by the end of this year. The company has posted declining profits in recent quarters due to restructuring and acquisition charges, though lately it has generated stronger revenue. Abbott's diverse portfolio has shielded the company from some of the common problems plaguing other drug manufacturers, such as patent expirations and competition from generic-brand pharmaceuticals.

Splitting the company into two separate businesses could help raise share value and sales, analysts predict. With Johnson & Johnson's exit from the stent market earlier this year, Leerink Swann LLC analyst Rick Wise told Medical Product Outsourcing that Abbott could very well increase Xience stent sales, which in turn, should offset lower pricing for the product.

"[The split] is good news," Jan David Wald, an analyst at Morgan Keegan & Co. in Boston, Mass., told Bloomberg Businessweek at the time the move was announced." You'll start to see more people interested in the stock, which has languished for years. The two companies each will be more valuable than they are together."

For the company as a whole, FY11 posted solid financial results across its lines of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. Total sales were $38.9 billion, an increase of 10.5 percent. Net earnings were $4.7 billion, compared with $4.6 billion in fiscal 2010. In device-specific segments, the news was equally positive. Core Laboratory Diagnostics sales were nearly $3.4 billion, an operational increase of 4.1 percent (7.9 percent reported). Molecular Diagnostics division products created $442 million in sales, up on an operational and reported basis--12.4 and 14.7, respectively. Total revenue for the Point-of-Care Diagnostics business was $301 million, an increase of 9.5 percent operationally (10.4 percent reported). Gains for the Vascular division were a little more modest in FY11, yielding $3.3 billion, a slight increase of 1.2 percent operationally (up 4.4 percent on a reported basis). Diabetes Care products were steady earners--nearly $1.4 billion, up 3.8 percent on an operational basis (7 percent, reported). Gains for the Medical Optics unit were $1.1 billion, a slight increase of 0.7 percent operationally (4.6 percent, reported).

"Despite another challenging year for the global economy, Abbott again delivered leading performance, including strong sales and ongoing earnings-per-share growth," White said. "2011 was a significant year for Abbott, with the announced plan to separate into two leading health care companies in research-based pharmaceuticals and diversified medical products, each offering shareholders distinct identities with unique investment opportunities. We remain on track to complete the separation by the end of 2012."

Notably, the 2011 fiscal year certainly was a year of regulatory wins for Abbott's vascular division. In January, the company kicked off the year with CE Mark of its Absorb drug-eluting bioresorbable vascular scaffold (BVS) for the treatment of coronary artery disease, which the company claims is a market first. Abbott's BVS device restores blood flow by opening a clogged vessel and providing support to the vessel until the device dissolves within approximately two years, leaving patients with a treated vessel free of a permanent metallic implant. Full commercial launch took place throughout this year. In the United States, Absorb currently is investigational and is not available for sale.

"The CE Mark approval for Absorb in Europe is a significant accomplishment that validates the impressive clinical results that have been observed with this device," said Patrick W. Serruys, M.D., Ph.D., professor of interventional cardiology at the Thoraxcentre, Erasmus University Hospital, Rotterdam, the Netherlands.

The stent is made of polylactide, a proven biocompatible material that commonly is used in medical implants such as resorbable sutures. Since a permanent metallic implant is not left behind, a patient's vessel treated with the stent ultimately may have the ability to move, flex and pulsate similar to an untreated vessel. Restoration of naturally occurring vessel functions is significant in the treatment of coronary artery disease. Continuing research also indicates that long-term dual anti-platelet therapy may be reduced because the temporary scaffold is completely resorbed.

CE Mark approval for Absorb in Europe was supported by data from clinical trials that included patient follow-up out to three years. Following approval, the company initiated a randomized, controlled clinical trial in Europe and New Zealand enrolling approximately 500 patients at 40 centers to compare Absorb to its own Xience Prime drug-eluting stent. The trial will provide additional data to support European commercialization and reimbursement activities.

In May, the U.S. Food and Drug Administration (FDA) approved an expanded use of the RX Acculink carotid stent system for patients with carotid artery disease who are at standard risk of adverse events from carotid endarterectomy (standard of care surgery). The system previously was indicated for patients at high risk of adverse events from surgery.

Patients with carotid artery disease have three treatment options: carotid artery stenting, carotid surgery (known as carotid endarterectomy) or medical therapy. The traditional surgical treatment for carotid artery disease usually requires general anesthesia and involves an incision in the patient's neck and artery to remove plaque from inside the vessel wall. In contrast, during a stenting procedure, an embolic protection system is positioned in the carotid artery and a stent is deployed using a catheter inserted into a small puncture in the patient's groin. The patient usually remains conscious while the stent is implanted at the site of the blockage. The embolic protection system is designed to capture particles of plaque that might be dislodged during the procedure, which potentially could lead to stroke.

Abbott also began the process to obtain Medicare coverage for carotid stenting based on the clinical trial results that were the basis for FDA approval. In addition, a post-approval study was initiated to track clinical outcomes at 30 days and annually for three years.

Stroke is the third leading cause of death in the United States and the leading cause of disability in adults, according to the American Heart Association. An ischemic stroke, the most common type, can occur when the carotid artery becomes narrowed and small particles of atherosclerotic plaque become dislodged from the diseased carotid artery wall. This embolic material can travel through the bloodstream and block blood vessels in the brain. More than 795,000 Americans will have new (610,000) or recurrent (185,000) strokes each year. On average, every four minutes someone in the United States dies of stroke. Carotid artery disease is the leading cause of stroke in the United States, with more than 60 percent of all stroke occurrences linked to carotid artery disease. The carotid arteries supply oxygen and blood to the parts of the brain where thinking, speech, personality, and sensory and motor functions reside.

In May, the company received FDA approval for the Xience Nano drug-eluting stent for treating coronary artery disease in small vessels. The Nano, which is based on the same platform as the Xience V everolimus-eluting coronary stent provides a new option for treating vessels as small as 2.25 mm in diameter. Small vessels often are associated with increased levels of restenosis, or tissue re-growth, following a stent implantation. The Xience nano features thin struts measuring 0.0032 inches.

"The treatment of small vessels is often complex and associated with higher rates of complications compared to larger vessels," said Marco Costa, M.D., Ph.D., professor of medicine, director of the Interventional Cardiovascular Center, and director of the Center for Research and Innovation, Harrington-McLaughlin Heart and Vascular Institute, University Hospitals Case Medical Center, Case Western Reserve University, Cleveland, Ohio, and principal investigator of the SPIRIT SmallVessel clinical trial.

FDA approval of the Nano was supported by results from the SPIRIT small vessel clinical trial, which showed low late loss (a measure of vessel re-narrowing) of 0.20 millimeters and a target lesion failure (TLF) rate of 8.1 percent, which is comparable to results observed during the SPIRIT trials with Xience V. TLF is defined as a composite measure of important efficacy and safety outcomes for patients and includes cardiac death, heart attack attributed to the target vessel (target vessel myocardial infarction), and ischemia-driven target lesion re-vascularization.

The Xience family of drug eluting stents is available in the United States in diameters from 2.25-4.0 millimeters.

In November, Abbott finally received FDA approval for Xience Prime for coronary artery disease. The Prime stent uses the same drug and biocompatible polymer as the XienceV and features an enhanced stent design and a delivery system designed for greater flexibility, ideal radial strength, excellent longitudinal strength and more accurate stent placement, according to the company. The device uses cobalt chromium technology and features a "peak-to-valley" mechanical design that imparts longitudinal strength and stability to the stent, according to the company. Prime is offered in lengths up to 38 mm. The same device received CE Mark in Europe in 2009. Japanese approval came in April this year.

8. Covidien

$9.6 Billion ($11.6B Total)

KEY EXECUTIVES:

Jose E. Almeida, President & CEO

Charles J. Dockendorff, Exec. VP and Chief Financial Officer

James C. Clemmer, President, Medical Supplies

Michael Tarnoff, M.D., F.A.C.S., Corporate Chief Medical Officer

Michael Sgrignari, Sr. VP, Quality & Operations

NO. OF EMPLOYEES: 41,000 (total)

GLOBAL HEADQUARTERS: Dublin, Ireland

"Be brave. Take risks. Nothing can substitute experience." Jose E. Almeida may recognize the quote from his fellow countryman, Brazilian author Paulo Coelho. In July 2011, Almeida took the reins of Covidien as president and CEO following retirement of his predecessor Richard J. Meelia. Almeida became chief executive after heading the company's Medical Devices division. Maybe its Almeida's device background. Or perhaps it is that medical devices make up 68 percent of the company's total sales that the Dublin, Ireland-based company is so aggressive about its medtech sales. The company has leveraged its experience in a number of key sectors and has taken risks with an aggressive acquisition agenda. It certainly was evident in the company's bottom line.

The medical device industry--once accustomed to regular double-digit growth--has come to recognize that high single digit gains aren't too shabby. But that wasn't good enough for Covidien in 2011.

For fiscal 2011 (ended Sept. 30), Medical Devices sales rose 17 percent to $7.8 billion from $6.7 billion in the prior year. Favorable foreign exchange contributed approximately four percentage points to the increase. Medical devices were 68 percent of the company's total net sales. Strong sales of oximetry and monitoring devices, vascular products and venous insufficiency products led to increased led other sectors.

For fiscal 2011, sales of Medical Supplies, at nearly $1.8 billion, were up 3 percent from last year's $1.72 billion. The increase was a result of higher sales of nursing care and medical surgical products.

For the company as a whole, net sales of $11.6 billion were 11 percent above the $10.43 billion in the previous year, with favorable foreign exchange increasing the sales growth rate by approximately three percentage points. The addition of an extra selling week in fiscal 2011 also added approximately two percentage points to the sales growth rate. Net income was $1.9 billion, up from $1.6 billion. Earnings per share were $3.79, compared with $3.26 for fiscal 2010.

In the ultimate device-centric move, Covidien announced in December that it would peel off its pharmaceutical business into an independent public company in order to better focus on the specific models, sales channels, customers, capital requirements and talent bases demanded by its significant device operations.

"We've evaluated whether to separate these businesses for several years, due to the major differences between the medical products and pharmaceutical industries,'Almeida said at the time of the announcement." We believe that now is the right time to do so because we have significantly improved the operations, performance and pipeline of our pharmaceuticals business. "Almeida pointed out that the device and pharmaceutical pipelines" differ substantially in length, regulatory approval requirements, possible risks and potential returns," making it easier just to separate the two businesses.

The main segments Covidien manufactures devices for are endomechanical, energy, soft tissue repair, vascular, oximetry and monitoring, and airway and ventilation. Staple products, which fall under the endomechanical business, have been a boon to Covidien, representing 13 percent of total net sales in FY11. They contributed 12 percent of net sales in FY10.

New products certainly have been a major focus in 2011. One of the first products to kick off the year was the Endo GIA curved tip staples and black reloads with Tri-Staple technology for thoracic surgery, announced in January with full roll-out mid-year. The company claimed that the curved tip reload was to be the first and only surgical stapling device that features a curved tip for improved maneuverability around hard-to-reach tissues and vessels. It also offers blunt dissection during minimally invasive procedures such as video-assisted thoracoscopic surgery to remove a portion of the lung. The black reload enables surgeons to consistently staple in extra thick tissue applications that previously were beyond the indications of any minimally invasive stapler, according to Covidien.

Other devices released during the fiscal year include: The Fentanyl Transdermal System patch for pain management; the TurboHawk Plaque Excision System for small vessels, for the treatment of peripheral arterial disease; the LigaSure Curved, Small Jaw, Open Sealer/Divider surgical instrument for general surgery applications; the Pipeline Embolization Device, intended for the endovascular treatment of large or giant wide-necked intracranial aneurysms in the cavernous and paraclinoid regions of the internal carotid artery; the DuraSeal Exact spine sealant; and another addition to the V-Loc wound closure device family, the V-Loc PBT (polybutester) for knotless incision closure. All of these products were released in the United States, where approximately 55 percent of Covidien's net sales are generated--also where the company's primary operational headquarters are located (Mansfield, Mass.).

The company experienced healthy business in Europe too. FY11 saw the launch of the Self-Expanding Peripheral Stent System in Europe, as well as the Parietex Optimized Composite mesh for laparoscopic ventral hernia repair, and the Infinity MCable with Nellcor and OxiMax technology as an integrated component of the Drager Infinity Acute Care System, which monitors patient hemoglobin levels.

September brought the announcement of Covidien's first-ever research and development facility in China. Located in Shanghai, the facility focuses on tailored products customized to the specific needs of China and other emerging markets, as well as making use of the specific talents offered by Asian employees to develop and create new medical device technologies. The location was planned to be fully operational by July this year.

Like many other companies, Covidien had operations impacted as a result of the Tohuku earthquake and tsunami of March 11, 2011. The earthquake rocked Japan, causing almost 16,000 confirmed deaths. Covidien has a manufacturing facility in Shizuoka as well as offices in Tokyo (both about 500 miles from the epicenter of the quake), but on March 17 the company confirmed that none of its 1,500 employees had been injured. Transport routes were affected by the earthquake and ensuing tsunami, and some of Covidien's local suppliers suffered damage, but the company fed from raw material stores to keep supply up during the period of uncertainty.

Because of its ties with Japan, Covidien worked closely with disaster relief organizations and donated more than $1 million in products, corporate grants and employee matching gift funds to support the country. Japan represented approximately 8 percent of Covidien's fiscal year 2010 net sales, but Japan sales were not ad versely affected by the disaster--they ended up being 9 percent of the company's net sales for FY11.

So far in 2012, Covidien is getting a reputation for fast and furious acquisitions. Working toward its goal of expanding and making the most of its booming device business, Covidien has been purchasing device companies around the world. Early in January, the $325 million acquisition of BARRX Medical Inc. was completed-the purchase was first announced in November 2011. BARRX produces technology for the treatment of Barrett's esophagus, a condition where the lining of the esophagus is damaged by stomach acid. Covidien also has finalized the purchase of Newport Medical Instruments Inc. for $108 million, and Oridion Systems Ltd. for $310 million. The companies have been folded into Covidien's ventilation and oximetry businesses, respectively.

9. Cardinal Health

$8.9 Billion ($102.6B total)

KEY EXECUTIVES:

George S. Barrett, Chairman & CEO

Jeffrey W. Henderson, Chief Financial Officer

Michael A. Lynch, CEO, Medical Segment

Michael C. Kaufman, CEO, Pharmaceutical Segment

Mark R. Blake, Exec. VP, Strategy & Corporate Development

Stephen T. Falk, Exec. VP, General Counsel & Corporate Secretary

Craig S. Morford, Chief Legal & Compliance Officer

NO. OF EMPLOYEES: 22,600 (total)

GLOBAL HEADQUARTERS: Dublin, Ohio

Most all businesses experience defining years. Some, like Apple, encounter them in their infancy; others stumble upon them rather late in their existence (the massive 2009 financial collapse of the 103-year-old General Motors Company certainly qualifies, considering its quick return to profitability). Cardinal Health experienced its own defining year in fiscal 2011. Chairman and CEO George S. Barrett branded the year as an outstanding one, but noted it still contained isolated pockets of subpar performance. Such imperfections, however, only intensified the company's efforts to increase profits and secure future growth.

"It was a year of outstanding accomplishments, exceeding our key company financial goals, and making great strides on both operational and strategic levels," Barrett told investors during a conference call last summer to discuss Cardinal's fourth-quarter and full-year earnings. "All in all, we achieved an excellent balance of investing for current and future growth, and returning significant value to our shareholders."

"As strong as our year was, there are still areas for improvement," Barrett continued. "Although it was an outstanding year for us in generics, system-wide supply disruptions created challenges for us and for our customers. This [had] an impact on our generic compliance growth rate. We set some aggressive generic compliance rate improvement goals for fiscal 2011 on top of strong growth in fiscal 2010. We have continued to progress to competitive levels, but we did fall a bit short of our goal of another 10 percent improvement. We will continue to keep our foot on the accelerator here."

Executives also are keeping their collective foot on the accelerator of Cardinal's Medical business, which lost 14 percent in profit during the fiscal year ended June 30, 2011. The segment's profit fell to a recession-era level of $369.9 million, a 3.9 percent decline compared with the $384.9 million the unit posted at the height of the downturn in 2009. Bigwigs attributed the sharp slip in profit to higher product prices.

"Although our Medical segment faced some unique challenges," Barrett noted in a letter to shareholders within the company's 2011 annual report, "... the underlying performance of the business is strong."

Not as strong as the Pharmaceutical segment, which reported a 4 percent rise in revenue and a 25 percent surge in profit. The growth represents an impressive turnaround from FY2010, when the segment reversed roles with its counterpart. Cardinal's Pharmaceutical business recorded a meager 2 percent overall revenue increase (which, ironically, is the precise amount of the Medical segment's growth in fiscal 2011) and a 3 percent decline in profit that year. Executives attributed the tumble in profit to a spate of generic drug launches and a shortage of Technetium-99, an isotope used by doctors 40,000 times a day to detect cancers and heart disease.

With replenished levels of Technetium-99 last year, there was one less hurdle to overcome in the Pharmaceutical segment's quest for growth. A frustrating roadblock remained, though--the conversion of branded drugs to generics, an amazingly effective drain on growth that Cardinal executives estimate cost the unit 5 percent in revenue.

Nevertheless, the Pharmaceutical segment managed to offset that lost revenue through $2.7 billion in divestitures, a $1.8 billion increase in existing customer sales, and several strategic acquisitions.

The company's largest merger in fiscal 2011 was the $1.3 billion deal for Kinray Inc., a privately held pharmaceutical distributor based in New York, N.Y. Before its purchase, the company generated more than $3.5 billion in annual sales and served more than 2,000 retail pharmacies, mostly in the New York metropolitan area.

The Kinray acquisition, announced in November 2010, boosts Cardinal's presence among smaller pharmacies in the Northeast and reduces its dependency on two dominant customers (most likely Walgreen Co. and CVS Caremark Corp., which uses distributors such as Cardinal to buy generic drug supplies). Analysts believe the Kinray deal increases the number of independent pharmacies served by Cardinal by 40 percent, to about 7,000.

Just weeks after announcing the Kinray deal, Cardinal bought Zuellig Pharma China, a 19-year-old drug distributor, for $470 million. Known in the Middle Kingdom as Yong Yu, the company is China's largest pharmaceuticals importer and gives Cardinal a foothold in the world's second-largest drug distribution market.

"The acquisition of Yong Yu in China not only expanded our pharmaceutical business in a market which is growing rapidly, but it also enables growth opportunities for other parts of our portfolio, including nuclear, consumer health, and medical product distribution," Barrett noted in the annual report.

Besides Kinray and Yong Yu, Cardinal set its sights on Healthcare Solutions Holding LLC early in fiscal 2011, doling out $517 million in cash and an additional $150 million over three years for the company.

Healthcare Solutions Holding is the privately owned parent of operating companies that provide software tools, services and data to specialty-care doctors, drug companies and insurers to improve both patient care and the efficiency of their practices. Both outcomes can help reduce healthcare costs. For example, the firm's P4 Healthcare and its P4 Pathways in Ellicott City, Md., offer oncology practice and disease management tools to healthcare providers.

Cardinal executives orchestrated the Healthcare Solutions acquisition to extend the company's reach in the specialty pharmaceuticals market, which is expected to grow at twice the rate of traditional pharmaceuticals over the next five years and generate more than $160 billion in worldwide sales by 2013, according to data from Parsippany, N.J.-based IMS Health.

While such notable purchases were non-existent in the Medical segment, the unit still made some significant strides toward long-term growth in fiscal 2011. One of the more noteworthy moves came courtesy of the U.S. Department of Defense (DOD), which awarded the company a 20-month contract for the distribution of medical supplies. The contract, according to Cardinal executives, has an option for two additional 20-month contract periods, for a total of five years. Executives expect the DOD contract to impact revenue during the second half of FY2012.

Other potential long-term profit boosters include the Medical Business Transformation Initiative, which was scheduled for implementation during the second half of fiscal 2012; the introduction of Cardinal's Hybrid Preference Pack, a sustainable surgical kitting solution that combines reusable and disposable surgical items into a single kit; and encouraging clinical research regarding the Surgi-Count Safety-Sponge System, a sponge counting and documentation system distributed by the Dublin, Ohio-based company.

The research, published in the February 2011 edition of The Joint Commission Journal on Quality and Patient Safety, showed that institutions successfully can eliminate the occurrence of retained or misplaced surgical sponged by using the Surgi-Count system. The study cited results from a high-volume surgical practice that reduced its retained surgical sponge rate to zero from a previous average of once every 64 days.

Despite such a rosy outcome, however, the research--as well as the Hybrid Preference Pack unveiling--could not push the Medical segment's revenues much past $8.9 billion, a 2 percent increase compared with FY 2010. Total segment assets barely moved in fiscal 2011, inching up 0.71 percent to $3.89 billion, according to the annual report.

Revenue for the entire company rose 4 percent to $102.6 billion and operating earnings jumped 16 percent to $1.5 billion. Non-GAAP diluted earnings per share from continuing operations were $2.67, a 20 percent increase.

50 Approximate percentage of all U.S. surgeries that use Cardinal Health products.

10. Stryker Corp.

$8.3 Billion

KEY EXECUTIVES:

Curt R. Hartman, Interim CEO, VP & Chief Financial Officer

Lonny J. Carpenter, Group President, Global Quality and Operations

Ramesh Subrahmanian, Group President, International

Kevin A. Lobo, Group President, Orthopaedics

Timothy J. Scannell, Group President, MedSurg & Spine

William R. Enquist, President, Endoscopy

James N. Heath, President, Instruments

William J. Huffnagle, President, Reconstructive

Vivian Masson, President, Osteosynthesis

Mark H. Paul, President, Neurovascular

Bradford L. Saar, President, Medical

Spencer S. Stiles, President, Spine

NO. OF EMPLOYEES: 21,241

GLOBAL HEADQUARTERS: Kalamazoo, Mich.

If that famous 19th-century idiom is true--the one proclaiming imitation to be the most sincere form of flattery--then former Stryker Corp. Board Chairman John W. Brown should be tickled pink. Brown, now retired from the Kalamazoo, Mich.-based orthopedic manufacturer, was quoted by executive management in the company's most recent annual report.

"Since Dr. Stryker's first invention, we have been a company of inventors, experimenters and achievers--all united behind the single goal of improving the delivery of healthcare in ways that positively affect the work of caregivers and the lives of patients," Interim CEO/Vice President/Chief Financial Officer Curt R. Hartman wrote in a four-page letter to shareholders at the start of Stryker's 2011 annual report. (Hartman assumed the post after former Chairman, President and CEO Stephen P. MacMillan resigned abruptly in February 2012). "I am excited about our future and our prospects for continued growth. To borrow a quote from John W. Brown, Chairman Emeritus, which graced these pages several years ago, 'I am still long on Stryker.'"

[GRAPHIC OMITTED]

Hartman has good reason to be "long" on his company: Revenue grew by $1 billion, or 13.5 percent last year (to $8.3 billion) and adjusted net earnings ballooned 12 percent to $3.72, finishing near the high end of executives' original guidance.

Further cementing Hartman's rosy outlook on Stryker most likely was the 9.1 percent jump in gross profit and the 5.6 percent rise in net earnings to $1.34 billion in the year ended Dec. 31, 2011. Solid growth in both domestic and international sales indubitably contributed as well--U.S, revenue swelled 9.9 percent to $5.2 billion while international proceeds totaled $3 billion, a 13.4 percent increase in constant currency compared with 2010.

Indeed, Stryker's financial health was nearly picture-perfect last year, save for a 3.7 percent decrease in operating income (a mere hiccup for all intents and purposes) and a $38 million severance outlay to cover the pensions and health benefits of employees affected by a restructuring that will reduce the company's global workforce 5 percent by the end of 2012. Stryker initiated the restructuring to realign resources and potentially minimize the impact of the 2.3 percent medical device excise tax that is set to take effect next year.

Stryker also incurred an additional $38 million in asset impairments and other contractual obligations in 2011, but the company recouped that expense (and the severance charge) by negotiating a $99 million settlement with the U.S. Internal Revenue Service (IRS) over the firm's cost-sharing arrangement with two wholly owned Irish entities.

While notable, the IRS settlement was mere pocket change compared with the additional revenue generated by each of Stryker's three business segments last year. The most impressive gains came from the Reconstructive unit, which surmounted dramatic changes in the global healthcare environment and lower surgical procedural volume to achieve a 4.5 percent rise in sales.

"Our reconstructive implant business was affected as high unemployment and fears about job security drove down the number of elective surgical procedures," Hartman told shareholders in the annual report. "For the first time ever, visits to doctors' offices in the U.S. declined. At the same time, pricing pressures from hospitals and Europe's debt crisis further curtailed our revenues. Conversely, providers in emerging economies such as India and China are struggling with how to meet soaring healthcare demands. Despite these headwinds, we managed to post a year of solid growth ..."

The Neurotechnology and Spine segment was the biggest contributor to that growth, generating an additional 48.4 percent in revenue last year. Executives attributed much of that increase to torrid sales of neurotechnology products throughout the year and the rollout of the company's next-generation Target detachable coils (manufactured by Boston Scientific Corp., the devices are designed to occlude blood flow in vascular abnormalities).

Neurotechnology product sales more than doubled last year, reaching $750 million, or nearly half of the $1.4 billion in total segment revenue, according to Stryker's annual report. Spinal product sales climbed 6 percent to $687 million.

The MedSurg segment turned in a solid performance as well, surpassing $3 billion in global revenue (ending the year with $3.1 billion in net sales) for the first time in company history. Patient handling and medical equipment devices recorded the highest sales volume increase (23.8 percent) but the lowest sales total ($722 million). Instruments, conversely, generated the most revenue for the segment--$1.1 billion--but experienced the smallest change in sales volume (9.4 percent compared with 2010 data). Endoscopy devices filled in the financial middle gap, falling behind Medical in sales volume change (9.6 percent) and trailing Instruments in net proceeds ($1 billion).

Stryker's Reconstructive segment posted some imposing gains in 2011, considering the challenges it has faced since the start of the Great Recession. Hip and knee sales comprised the lion's share of revenue for the unit, earning $1.2 billion and $1.3 billion respectively. Hip implant sales grew 6.4 percent compared with 2010 while knee replacement sales remained basically flat, rising a negligible 0.7 percent. Trauma and extremities product sales jumped 10.1 percent to $931 million in 2011, helping the unit to accrue $3.7 billion in total proceeds.

While much of Stryker's growth last year can directly be linked to product portfolio changes and higher demand for its implants, the company also benefited from a spate of savvy acquisitions as well as healthy investments in research and development.

R&D spending, in fact, grew 17.3 percent to $462 million in 2011--the largest increase since the carefree days of extravagance in the early 2000s. "Our research and development spending ... is driving our internal innovation pipeline as well as fueling additional innovations in our acquired businesses," Hartman noted in his shareholder letter. "By optimizing our cash flow capabilities to pursue both focused M&A and investing in internally driven innovation, we believe we are well-positioned to outpace our competitors."

Stryker certainly outpaced its competitors in acquisitions last year. It kicked off 2011 by closing its $1.5 billion acquisition of Boston Scientific's neurovascular business, a move that immediately made the company a leader in the increasingly competitive $900 million global neurovascular market.

Other conquests included the $316 million purchase of Malvern, Pa.-based Orthovita Inc., and the $150 million acquisition of French metal alloy manufacturer Memometal Technologies. The Orthovita purchase enables Stryker to complement its existing orthobiologics offering through Orthovita's signature products, including Vitoss (a bone graft substitute), Cortoss (a bone augmentation material) and the Vitagel surgical hemostat. The purchase also is likely to help Stryker better compete with rivals Medtronic Inc. and Johnson & Johnson in the $5 billion orthobiologics market.

Taking Memometal under its wing, on the other hand, is expected to strengthen Stryker's presence in the fast-growing market for foot and hand products. It also is likely to help the company capture a greater share of the podiatric surgery sector, analysts said.

Executives targeted privately held Concentric Medical Inc. of Mountain View, Calif., specifically for its array of products that treat acute ischemic stroke, a "brain attack" that cuts off blood flow and oxygen to the human body's most complex organ. Ischemic strokes are the most common (comprising approximately 87 percent of all "brain attacks") and generally are caused by blocked arteries in the brain.

Stroke is the fourth-leading cause of death in the United States, killing more than 133,000 Americans annually, according to data from the Centennial, Colo.-based National Stroke Association. About 795,000 U.S. residents suffer a stroke each year.

"The Neurovascular and Concentric acquisitions created what we think of as one of the most exciting stories in medical technology today," Hartman said in the annual report. "This is a story about Stryker and how we can bring together technologies and treatment capabilities not just to improve lives, but also to help save them. By coupling the hemorrhagic stroke treatment capabilities with Concentric's devices to treat AIS, Stryker is now a world leader in complete stroke care and is able to bring life-saving technologies to patients."

Those technologies include the Merci Retrieval System, a minimally invasive catheter-based system designed to retrieve and remove clots in patients who experience AIS; and the DAC family of catheters, which help improve distal neurovascular access and provide additional microcatheter stability closer to the treatment site.

Stryker also rolled out some innovative new non-life-saving technologies last year. Among the standouts was the MDM X3 Modular Dual Mobility Mobile Bearing Hip System, a third-generation device designed to enhance stability and jump distance, which could lead to increased range of motion in certain patients. The MDM X3 system also is applicable to a broader patient population.

Other products that made their market debuts in 2011 included the ShapeMatch Cutting Guides (for use with Stryker's Triathlon Total Knee System) and the VersiTomic G-Lok implant. The cutting guides, according to executives, use 3-D imaging software to develop a customized pre-operative surgical plan for patients undergoing knee procedures; studies have shown these guides to improve procedural efficiency and reduce recovery times.

The G-Lok provides suspension fixation of soft tissue to bone during reconstruction procedures. Its design creates a spring-like action that allows the device to automatically deploy on the cortical surface. G-Lok's loop material is made from high performance medical-grade fiber and was created specifically to increase creep resistance as well as enhance strength. The product also comes in a larger size (the G-Lok XL), tacking on an additional 5 millimeters in length and I millimeter in width. G-Lok joined Stryker's VersiTomic Flexible Reaming System, whose piece technology allows for anatomically placed tunnels without the need to hyperflex the knee.

11. Becton Dickinson & Co.

$7.8 Billion

KEY EXECUTIVES:

Edward J. Ludwig, Chairman

Vincent A. Forlenza, President and CEO

David V. Elkins, Exec. VP & Chief Financial Officer & Treasurer

Pierre Boisier, Sr. VP, Quality

Scott P. Bruder, M.D., Ph.D., Sr. VP & Chief Technology Officer

David T. Durack, Sr. VP, Corporate Medical Affairs

NO. OF EMPLOYEES: 29,400

GLOBAL HEADQUARTERS: Franklin Bakes, N.J.

Becton Dickinson (BD) and Co.'s Medical, Diagnostics, and Biosciences divisions brought the company a total of $7.8 billion in sales, up 6.2 percent, for fiscal year 2011, (ended Sept. 30). Despite an uptick in sales for the year, net earnings were relatively flat. The company's profit totaled $1.27 billion, down slightly from $1.31 billion in 2010. Almost $4.5 billion in sales were from international markets.

Sales for BD Medical (which includes products for anesthesia, infusion therapy, injection, sharps disposal and surgery; diabetes care; and surgical systems) increased 5.6 percent to $4 billion. BD Diagnostics (diagnostics and prenatal systems recorded earnings of just under $2.5 billion, an increase of 7 percent. BD BioSciences (cell analysis and discovery labware) grew sales by 6.7 percent to $1.3 billion.

BD made two strategic acquisitions during the fiscal year. In March it acquired Accuri Cytometers Inc., a company dedicated to manufacturing personal flow cytometers for researchers. Cytometry is the science of measuring and examining cells. The company was folded into BD's Biosciences division, and Accuri's signature product now is known as the BD Accuri flow cytometer, and has a variety of applications even outside the medical space such as environmental studies.

In September just before the close of the fiscal year, BD closed the acquisition of Carmel Pharma AB, a Swedish company that manufactures the BD PhaSeal system. The PhaSeal system is a closed-system drug transfer device for the safe handling of hazardous drugs that are packaged in vials. Carmel and the technology it brought with it were added to enable BD's Medical Surgical Systems unit to "enter early stage market with significant long-term growth potential," according to a letter to shareholders penned by CEO Vincent Forlenza (who became chief executive in June 2011 after successfully holding key leadership positions at the company throughout the years) and Chairman Edward Ludwig.

FY2011 also saw the release of a few new products. The Vacutainer Rapid Serum Tube was released in October 2010. The blood collection device is designed to aid acute healthcare facilities in rapidly analyzing blood serum for patient diagnosis, and has 510(k) clearance from the U.S. Food and Drug Administration. The device is claimed to facilitate a five-minute clotting time and as little as three minutes of centrifugation, saving an alleged 32 minutes of laboratory time.

Some other notable products releases include: The BD Au toShield Duo Pen Needle, a next-generation product designed to protect healthcare workers from needlestick injuries and blood exposure at both the front and back ends of the needle launched by the Diabetes Care unit; The BD MAX System, a fully automated system designed for a range of molecular testing released by the company's Diagnostic Systems unit; and the BD FACSVerse Flow Cytometer, introduced by the Cell Analysis unit. Overall, new products accounted for 8 percent of total revenues in FY2011.

The focus of FY2011 was research and development with an eye on the future, rather than contemporary product releases per se. FY2012 already is promising to be a much busier year in terms of technology, having already seen the release of three new products thus far, according to the company's leadership.

"Our current product pipeline is the most robust in company history, "Forlenza and Ludwig told shareholders in the company's annual report. "We have plans to launch more innovative products across our segments through fiscal years 2012 and 2013.'Future technologies are set to target diabetes, cancer, chronic and infectious diseases, and HIV/MDS among other healthcare needs.

Becton Dickinson was among the companies affected by the Tohuku earthquake and tsunami of March 11, 2011, in Japan. The company's Fukushima manufacturing plant closed down temporarily, while its Tokyo office was undamaged. No BD employees were injured or killed. The company donated $325,000 to relief efforts, being heavily invested in the Japanese device web. BD also matched donations from employees globally to the American Red Cross and the U.S. Fund for UNICEF.

BD's company ethic of social responsibility did not end with Japan. During the fiscal year, BD sent human and monetary resources to Haiti to continue efforts one year after the earthquake of 2010; to Australia and New Zealand to help in flood recovery efforts; and to the Red Cross to aid in recovery following the Mississippi River flooding in the United States. Charitable donations also were made to help the victims of Hurricane Irene and the floods in the Northeast region.

12. Boston Scientific Corp.

$7.6 Billion

KEY EXECUTIVES:

William H. (Hank) Kucheman, CEO

Michael F. Mahoney, President

Jeffrey D. Capello, Exec. VP & Chief Financial Officer

Joseph M. Fitzgerald, Sr. VP &

President, Cardiac Rhythm Management

Maulik Nanavaty, Sr. VP & President, Neuromodulation

David A. Pierce, Sr. VP & President, Endoscopy

Michael P. Phalen, Exec. VP & President, MedSurg

Supratim Bose, Exec. VP & President, Asia-Pacific

J. Michael Onuscheck, Sr. VP & President, Europe, the Middle East and Africa

Brian R. Bums, Exec. VP, Global Quality, Medical Safety and Regulatory Affairs

Kenneth J. Pucel, Exec. VP, Global Operations and Technology

NO. OF EMPLOYEES: 24,000

GLOBAL HEADQUARTERS: Natick, Mass.

Boston Scientific Corp. executives may have experienced a bit of d6j~ vu last year as they embarked upon the next phase of the company's protracted odyssey toward long-term financial stability.

Not long after entering that new chapter of corporate governance, history began repeating itself: There was the high profile retirement, the lucrative sale of a non-strategic business, the market debuts of several new stents, and a restructuring aimed at reducing costs and increasing overall efficiency. The developments were eerily reminiscent of 2008, when the Natick, Mass.-based firm bid farewell to President and CEO Jim Tobin, streamlined operations through layoffs, sold five non-strategic businesses and unleashed a torrent of new stents to the market, among them the Tax-us Libert6 and Taxus Express Atom paclitaxel-eluting stent systems.

The science-fiction-like time loop that recycled these incidents in 2011 replaced Tobin with CEO J. Raymond Elliott, who retired from the firm on Dec. 31 after serving less than two years in the position. He was replaced by Michael F. Mahoney, former worldwide chairman of Johnson & Johnson's medical device business (he currently is president and will officially assume the duties of CEO in November).

The time loop also substituted Promus Element stents for the Taxus devices, and sacrificed the company's neurovascular business unit for future prosperity's sake.

Despite such superficial discrepancies, however, (and the sandwiching of a crushing recession between the two time periods), the time loop kept Boston Scientific's 2011 earnings mostly in line with its 2008 financial performance.

Last year's net sales, for example, fell 2 percent to $7.6 billion while gross profit tumbled 4.7 percent to $4.96 billion. While they were not precise matches to the 4 percent sales slip and corresponding 7.2 percent decrease in gross profit that occurred four years ago, the numbers nevertheless similarly trend downward.

In spite of its overall losses in net sales and profit, the company reported some notable gains in several of its business units during fiscal 2011 (year ended Dec. 31). Neuromodulation sales rose 11 percent to $336 million, and Endoscopy product sales jumped 10 percent to $1.18 billion.

Executives attributed the increase in U.S. nueromodulation sales (which comprised the bull of product revenue, at $317 million) primarily to higher procedure volumes and positive momentum from product launches. In the second quarter of 2011, the company received CE Mark approval of the Clik Anchor for its Precision Plus SCS (Spinal Cord Stimulation) System, a device for chronic pain relief that features multiple independent current control. The design gives each electrode contact on the lead its own, dedicated power source, allowing clinicians to precisely target pain by moving the electric field between simultaneously active contacts.

During the fourth quarter of 2011, the U.S. Food and Drug Administration (FDA) approved Boston Scientific's Infinion 16 Percutaneous Lead for its Precision Plus SCS System. Infinion offers double the number of contacts and is designed to "offer more coverage of the spinal cord for the management of chronic pain," a condition that afflicts more than 75 million U.S. residents, data from the American Pain Foundation show. Researchers claim that tens of thousands of chronic pain patients successfully have managed their pain through SCS systems.

The increase in 2011 Endoscopy sales--aided by a $39 million boost from favorable foreign exchange rates--came primarily from robust sales of stents. Growth drivers included the WallFlex product line, particularly the WallFlex Biliary RX Fully Covered Stent, which received CE Mark approval in late 2010 for the treatment of benign biliary structures. The WallFlex Biliary RX Stent is constructed of braided, Platinol (platinum-cored Nitinol) wire and features three key attributes: radial force to help maintain duct patency and resist migration; flexibility to aid in conforming to tortuous anatomies; and full-length radiopacity to enhance stent visibility under fluoroscopy.

The company's Advanix Biliary Plastic Stent System and the Expect Endoscopic Ultrasound Aspiration Needle, which debuted in the United States and in certain international markets in the second quarter of 2011, also helped improve overall Endoscopy sales last year. Higher sales of hemostasis devices contributed as well, thanks to continued adoption and utilization of the Resolution Clip Device, an endoscopic mechanical clip designed to treat gastrointestinal bleeding.

Peripheral Interventions (PI) and Urology/Women's Health products proved popular last year too, respectively earning $731 million, a 9 percent spike compared with 2010, and $498 million, a 4 percent hike over the previous year. Main sales drivers included the Epic self-expanding nitinol stent system in certain international markets and the Carotid WALLSTENT stent system in Japan. The Epic system--approved by the FDA in May 2012--helps open blocked arteries in patients with iliac artery stenosis, a form of peripheral vascular disease characterized by severe leg pain from insufficient blood flow. The Carotid WALLSTENT device is a self-expanding stent with a closed-cell design to provide increased scaffolding for improved lesion coverage and a smooth inner lumen. It features a highly flexible, low-profile stent delivery system that moves easily through difficult anatomy, according to Boston Scientific.

The company's core PI franchise gained market share last year through the introductions of its next-generation Mustang percutaneous transluminal angioplasty (PTA) balloon, the Charger PTA Balloon Catheter (launched in December) and the Coyote balloon catheter, an ultra-low profile balloon dilatation device designed for various peripheral angioplasty procedures. New products also spurred growth in Boston Scientific's interventional oncology franchise; specific standouts were the Renegade Hi-Flo Fathom microcatheter and guidewire system (used to treat uterine fibroids and liver cancer) and the Interlock-35 Fibered IDC Occlusion System for peripheral embolization, a device containing a 0.035-inch detachable coil with an interlocking connection between the coil and delivery wire. The Interlock system improves placement control as well as the ability to advance, retract and reposition the coil before final deployment in a blood vessel.

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A "softness" in elective procedures and controversy over the safety of vaginal mesh implants negatively impacted sales of Women's Health products in 2011. The vaginal mesh brouhaha--quietly brewing for months--finally boiled over in July after an FDA report discovered a fivefold increase in deaths, injuries or malfunctions from vaginal mesh devices that treat pelvic organ prolapse and stress urinary incontinence. Less than six months later, in January 2012, the FDA announced it would require manufacturers to conduct studies of surgical mesh implants due to safety and efficacy concerns. The federal agency also said it was considering reclassifying the devices from moderate-risk (Class II) to highest risk (Class III), which would require clinical data to be submitted for approval.

Still, the company managed to partially offset lower-than-expected sales with increased market share and robust growth of its Genesys Hydro Therm-Ablator system, a next-generation device designed to ablate the endometrial lining of the uterus in premenopausal women with menorrhagia (vaginal bleeding). The Genesys HTA System features a smaller and lighter console, simplified setup requirements and an enhanced graphic user interface.

Electrophysiology device sales remained flat last year, earning $147 million, while Interventional Cardiology--which includes proceeds from stents, balloon catheters, rotational atherectomy systems, guide wires, guide catheters, embolic protection devices and diagnostic catheters used in percutaneous transluminal coronary angioplasty procedures--fell 4 percent to $2.4 billion. Cardiac Rhythm Management sales were down as well, slipping from $2.1 billion in 2010 to $2.08 billion last year, encumbered by sluggish sales of both pacemaker systems and implantable cardioverter defibrillator (ICD) systems. Pacemaker revenue decreased 2 percent to $569 million and ICD system sales declined 5 percent to $1.5 billion. Boston Scientific bigwigs blamed the losses on pricing pressures, federal investigations into ICD implant practices at hospitals, the expansion of Medicare recovery audits, and a study that questioned the device's evidence-based guidelines.

The company tried offsetting the shortfall in ICD revenue with the fourth-quarter market releases of the Incepta, Energen and Punctua line of next-generation defibfillators but the losses by that time most likely were irreversible. Interventional Cardiology sales tumbled 4 percent due to pricing pressures, procedural volume reductions and market share declines in the company's intravascular ultrasound imaging systems. A stagnant stent market certainly didn't help either.

For the second consecutive year, sales of Boston Scientific's drug-eluting and bare metal stents declined. In fiscal 2011, drug-eluting stent sales totaled $1.5 billion, a 1.8 percent decrease compared with the $1.53 billion the company reported in 2010. Bare metal stents fell 16.5 percent, going from $133 million in 2010 to $111 million last year, according to the 2011 annual report. The declines have become more pronounced since 2009, when drug-eluting stents earned $1.7 billion for the company and their baremetal counterparts garnered $171 million. Executives attributed the losses to market size contraction, lower average selling prices and a reduction in procedural volume but noted the company's share of the U.S. drug-eluting stent market climbed to 48 percent from 46 percent in 2010.

That market share gain came mostly from the second-quarter domestic launch of Boston Scientific's third-generation Taxus Element stent system, a product hailed as the "strongest, most flexible and most visible thin-strut coronary stent" on the market. The Taxus stent comprised less than one-third of the company's total drug-eluting stent sales, generating $420 million last year.

Other second-quarter stent launches included the Ion Paclitaxel-Eluting Platinum Chromium Coronary Stent System and the Omega Platinum Chromium Bare-Metal Coronary Stent System-devices that incorporate platinum chromium alloy made specifically for stenting purposes.

About a month before the year ended, Boston Scientific debuted its next-generation Promus Element stent system, another platinum chromium device. The Promus stent has less recoil, higher radial strength and employs an advanced low-profile delivery system that features a dual-layer balloon and Bi-Segment inner lumen catheter designed to facilitate precise delivery across challenging lesions.

"Our goal with these launches is to continue to further strengthen our worldwide market positions which, in my view, is growing m accordance in an era where economic buyers have increasing influence and purchasers are considering fewer vendors," CEO William H. (Hank) Kucheman told analysts in February during a conference call discussion of Boston Scientific's 2011 earnings. "We have built our pipeline, and we are building commercial capabilities in emerging markets. We are achieving key milestones relating to our cost reduction opportunities and our Priority Growth Initiatives, and we have improved our financial situation so that we now have added flexibility to balance investments in new markets and growth technologies, along with returned capital to shareholders."

One of the ways Boston Scientific achieved its self-imposed Priority Growth milestones was through acquisition. The company gained a bevy of new devices and technologies through M&A last year, including an aortic stenosis treatment system from Sadra Medical; a wireless cardioverter defibrillator from Cameron Health Inc.; neuromodulation technologies for deep brain stimulation therapy from Intelect Medical Inc.; a left atrial appendage closure device from AtTitech Inc.; and two technologies for treating peripheral chronic total occlusions (one originated with S.I. Therapies Ltd. In Israel while the other was developed by Sunnyvale, Calif.-based ReVascular Therapeutics Inc.).

Other avenues to long-term growth were paved last year through a workforce reduction program that is expected to save the company $275 million, and the $1.5 billion sale of its neurovascular unit to Stryker Corp. Boston Scientific planned to use half of the $1.2 billion in after-tax proceeds to retire debt and the rest for acquisitions. The company currently is engaged in a two-year restructuring plan that likely will include more moves to rebalance a portfolio which relies heavily on growth-challenged heart devices.

Boston Scientific entered the neurovascular sector in 1997 with the purchase of Fremont, Calif.-based Target Therapeutics. The business, which stayed in Fremont, employed about 1,150 people and generated revenue of $343 million in 2010.

Overall sales for the global neurovascular market are rising between 9 percent and 10 percent but Boston Scientific has not taken advantage of that potential in recent years. Its neurovascular sales declined 3 percent to $348 million in 2010 and slipped further in the third quarter, to 7 percent.

13. Danaher

$6.6 Billion ($16.1B total)

KEY EXECUTIVES:

Steven M. Rales, Chairman

H. Lawrence Culp Jr., President & CEO

Daniel L. Comas, Exec. VP & CFO

Daniel A. Raskas, VP of Corporate Development

NO. OF EMPLOYEES: 59,000 (total)

GLOBAL HEADQUARTERS: Washington, D.C.

Washington, D.C. based Danaher Corp. goes about its business quietly. Or perhaps that's better phrased as businesses (plural). Chances are that people are more familiar with the brands that Danaher makes than they are with the parent company. Danaher's diverse brands are broken down into five categories: Test & Measurement; Environmental; Life Sciences & Diagnostics; Dental; and Industrial Technologies.

In the medical device space, the company's Dental and Life Sciences & Diagnostics divisions are of interest to the Medical Product Outsourcing (MPO) audience. Danaher's Life Sciences and Diagnostics units provide technology for clinical histopathology laboratories, hospital central labs and point-of-care locations, as well as government, academic and pharmaceutical research laboratories. The Dental division provides devices for dental operatory, including dental consumables, digital imaging products, precision dental hand pieces, treatment units and diagnostic systems. On the medical device side, Danaher more likely is known for its varied product lines than its company moniker. Divisions include such brands as AB Sciex, Dexis, Gendex, Imaging Sciences International, Instrumentarium Dental, Invetech (a contract manufacturer with which MPO readers may be familiar), KaVo, Dessert, Kerr, Leica Microsystems, Ormco, Pelton & Crane, Radiometer, Soredex and SybronEndo.

For the 2011 fiscal year (ended Dec. 31) revenues for everything under the Danaher corporate umbrella were $16.1 billion compared to $12.6 billion in 2010, an increase of 28 percent. The significant increase was due in large part to the acquisition of diagnostic firm Beckman Coulter in early 2011 for $6.8 billion, which Danaher added to its Sciences & Diagnostics division. The deal was completed in June 2011. Overall net earnings were $1.9 billion, or $2.77 per share on a diluted basis, compared with net earnings of $1.7 billion, or $2.53 per share on a diluted basis for 2010. The company divested a number of non-life-science-related firms in 2011, which has been part of an ongoing corporate strategy to focus on existing operations or to acquire faster-growing, more profitable businesses that are less dependent on cyclical demand. A total of 13 companies across all product categories were acquired. Notably, research and development spending topped the $1 billion mark for the first time in Danaher's history. For the company overall, emerging market revenues grew more than 12 percent in 2011 compared to 2010. The company also has doubled its low-cost region sourcing to nearly 30 percent from 2005 to 2011.

H. Lawrence Culp, Jr., president and CEO called 2011 a "tremendous" year for the company.

The Life Sciences & Diagnostics sector recorded $4.6 billion in sales, up from $2.3 billion in 2010. Operating profit was $402 million, a significant increase compared with $228 million for fiscal 2010. Acquisitions (the Beckman Coulter buyout) were responsible 91 percent of sales growth. Sales for this segment in 2011 by geographic destination were: Europe, 37 percent; North America, 31 percent; Asia/Australia, 27 percent; and other regions, 5 percent. Sales by geographic destination in 2012 are expected to differ from sales by geographic destination during 2011 as a result of the June 2011 acquisition of Beckman Coulter. More of the segment's 2012 sales are anticipated to be in North America.

Sales from existing businesses in the segment's acute care diagnostics business grew at a high single-digit rate during 2011 as a result of strong consumable sales related to the business' installed base of acute care diagnostic instrumentation and new instrument placements, primarily in Europe, China and other Asian markets. Demand for the business' compact blood gas analyzer also remained strong, particularly in emerging markets, the company reported. Increased European and emerging market demand for the business' cardiac care instruments also contributed to growth. Sales from existing businesses in the pathology diagnostics business also grew at a high single-digit rate during 2011 due to increased demand for advanced staining instruments and consumables, as well as higher sales of core histology systems and consumables, primarily in North America and emerging markets, and to a lesser extent, Europe. The acquisition of Beckman Coulter significantly expanded the segment's product portfolio in the area of clinical diagnostics through the addition of new and complementary product and service offerings. Sales from existing businesses in the segment's microscopy business grew at a mid single-digit rate during 2011 due to demand for confocal and compound instrumentation serving the life-sciences research and industrial markets, particularly in China and other emerging markets. Strong demand for mass spectrometers serving both the academic and proteomic research markets as well as the applied markets resulted in a low double-digit growth rate from sales from existing businesses. Sales from existing businesses in the mass spectrometry business grew in all major geographies during 2011 led by strong performance in the Asia-Pacific region and North America. Company officials expect "significant cost synergies" by applying existing Danaher business models to Beckman Coulter and the combined purchasing power of the company and Beckman Coulter.

Danaher's Dental division businesses took a $2 billion bite out of the market in terms of sales. That's up compared to $1.8 billion in 2010. Total operating profit was $236 million, compared to $203 million for the previous fiscal year. Dental segment sales by location were: North America, 49 percent; Europe, 34 percent; Asia/Australia, 10 percent; and other regions, 7 percent. Price increases throughout the Dental segment contributed 1 percent to sales growth during 2011. Sales from existing businesses in the dental consumables business grew at a mid single-digit rate in 2011 driven primarily by increased demand for general dentistry consumables and orthodontic products and, to a lesser extent, infection control products, the company reported. Sales in the dental consumables business grew in all major geographies. Increased sales of imaging products were led by North America, and to lesser extent, the emerging markets, while instrument sales growth was driven largely by North America and Europe.

60%+ The amount of Danaher's revenues generated outside the United States. A quarter of sales are derived from emerging markets.

14. B. Braun

$6 Billion

KEY EXECUTIVES:

Heinz-Walter Groge, Chairman of the Management Board

Wolfgang Feller, Head of the Avitum Division

Harms-Peter Kalaebel, Head of the Aesculap Division

Meinrad Lugan, Head of the Hospital Care & OPM Divisions

Caroll H. Neubauer, Head of the North America Region

Otto Philipp Braun, Head of the Iberian Peninsula and Latin America

NO. OF EMPLOYEES: 43,676

GLOBAL HEADQUARTERS: Melsungen, Germany

All companies keep secrets. KFC Corporation keeps its famous fried chicken recipe (that surreptitious mix of 11 erbs and spices) locked in a corporate vault more than 30 years after Colonel Harland Sanders' death. At Apple's sprawling headquarters, employees reputedly are banned from design labs, and windowless "lockdown" rooms sequester precious information from the outside world (including the company's own rank-and-file workers).

Such a clandestine atmosphere is non-existent at B. Braun Melsungen AG. The company's management board, in fact, promotes a corporate culture of knowledge sharing and partnerships, a philosophy reflected in the manufacturing firm's 2011 annual report.

"The theme of this annual report, 'Sharing expertise, Promoting partnership,' is important to us," Management Board Chairman Heinz-Walter Groge said in a brief letter to shareholders. "It is one of B. Braun's recipes for success as we not only see ourselves as a partner to hospitals, physicians and healthcare personnel but also take responsibility for patients. Achieving peak performance is not something you can do on your own. The ongoing exchange between physicians, healthcare personnel and patients helps us to continually improve lives, whether through research or through daily interaction with our colleagues and business partners. Our corporate culture is based on the firm belief that fair and reliable partnerships lead to the best results ..."

Or, perhaps, the next best outcome. B. Braun recorded its second-most profitable year in company history in 2011. Net profit totaled 256 million euros ($331 million) and gross profit remained steady at 2.1 billion euros ($2.7 billion). (Editor's note: Percentages reflect changes based on the local currency in which the financials were reported--in this case, the Euro--and do not take into account annual foreign currency exchange fluctuations. Dollar amounts were converted using the exchange rate on the last day of the reporting period, Dec. 31).

Net sales rose 4.2 percent to 4.6 billion euros ($6 billion), though foreign currency exchange rates boosted that growth to 5.3 percent. EBITDA (earnings before interest, taxes, depreciation and amortization) slipped 1.7 percent to 688.5 million euros ($891.5 million) due to cost-cutting measures by public healthcare purchasers, higher commodity prices and startup costs for new factories.

B. Braun opened new or expanded facilities in Romania, Serbia, Vietnam and Germany last year, and announced the expansion of a manufacturing plant in Glandorf. Located 220 kilometers (136 miles) north of the company's headquarters in Melsungen, Germany, the Glandorf plant produces drugs and medical devices for dialysis therapy. B. Braun is spending 50 million euros on the expansion project, adding a new dialysis production facility and fully automated high-bay warehouse to meet increased product demand. The factory is expected to open early next year.

B. Braun opened its expanded facility in Timisoara, Romania, in mid-February 2011.The 4 million-euro expansion plan raised total annual production capacity at the site to 19 million units of infusion solutions and is expected to help the company increase its presence in southeastern Europe. Executives envision the Romanian facility as a distribution hub for B. Braun in the region, delivering products to such neighboring markets as Albania, Bulgaria, Macedonia, Montenegro and Serbia.

"Though the investment in Timisoara, we plan to make the location a hub for other neighboring countries' needs, which will strengthen Romania's position within the B. Braun group," Meinrad Lugan, head of the company's Hospital Care & OPM divisions, said during an opening ceremony at the plant.

B. Braun also reinforced Vietnam's position in the company with the opening of a 32.6 million-euro IV production plant in Hanoi. Encompassing 9,800 square meters (32,152 square feet)--slightly larger than a soccer field--the new facility will enable the company to increase its annual production of IV sets to 100 million units from 35 million units. Over time, production possibly could reach 200 million units annually, bigwigs noted.

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Besides the production facility in Hanoi, B. Braun has offices in Can Tho, Danang, Hanoi, Hue and Ho Chi Minh City, Vietnam.

The company doesn't have quite the same market penetration in southeastern Europe as it does in Vietnam, but officials attempted to correct that disparity (in part) with the addition of a facility in Belgrade last summer. Dragan Soljakovski, managing director of B. Braun in Coatia and Serbia, said the new facility sends a "strong signal in a country with great challenges but also enormous potential for the entire Balkan region."

Other new facilities born to the B. Braun family last year include an IV pump and dialysis machine manufacturing plant in Melsungen, Germany, and the Bucharest chapter of the Aesculap Academy, a medical training program established by the company in 1995.

B. Braun's Aesculap division (which oversees the Aesculap Academy) was the second-largest contributor to growth in 2011, amassing 1.35 billion euros ($1.75 billion), a 5.8 percent increase compared with the 1.28 billion euros ($1.69 billion) the division garnered in 2010. Surgical products were the main growth driver in the division, followed by vascular therapeutic devices. Sales of drug-eluting balloon catheters and wound closure products were strong as well. Orthopedic and spine sales were off, reflecting continued stagnation in both sectors.

The Aesculap division was outperformed by the Hospital Care unit, which generated 2.15 billion euros ($2.79 billion) in sales last year, a 3.5 percent increase compared with the 2.08 billion euros ($2.76 billion) the division collected for B. Braun in 2010. IV catheters (Introcan Safety and Vasofix Safety catheters) and injectable drugs (Propofol-Lipuro, Duplex and Heparin) were top-grossing products, as were large-volume 1V solutions and standard IV sets. Increased demand helped lift sales of regional anesthesia products, according to the company's annual report.

In February, the Hospital Care division marked a very special milestone: Its LIFE facility in Melsungen manufactured the billionth Ecoflac plus container for standard IV solutions. Since production of the Ecoflac container began in 2004, the company has grown its market share from 25 percent to more than 45 percent, executives noted.

Sales in the Outpatient Market division rose 2.5 percent to 568.4 million euros ($736 million). Hygiene management devices, diabetes care items and incontinence care products achieved above-average growth.

B. Braun's Avitum division trailed its siblings, netting 500.6 million euros ($648.2 million) in sales last year, a 5.4 percent increase compared with the 474.8 million euros ($629.1 million) the unit posted in 2010. Growth came mostly from dialyzers and machines, though the division's dialysis provider business performed surprisingly well due to increased patient demand in India, Russia and South Africa.

Research and development spending jumped 15.7 percent to 179.9 million euros ($233 million), but operating profit fell 5.2 percent to 432.2 million euros ($559.6 million).

15. St. Jude Medical

$5.6 Billion

KEY EXECUTIVES:

Daniel J. Starks, Chairman, President & CEO

John C. Heinmiller, Exec. VP & Chief Financial Officer

Michael T. Rousseau, Group President

Joel D. Becker, President, U.S. Division

Denis M. Gestin, President, International Division

Frank J. Callaghan, President, Cardiovascular Division

Eric S. Fain, President, Cardiac Rhythm Management Division

Rohan J. Hoare, President, Neuromodulation Division

Jane J. Song, President, Atrial Fibrillation Division

Thomas Northenscold, VP of Information Technology and Chief Information Officer

NO. OF EMPLOYEES: 16,000

GLOBAL HEADQUARTERS: St. Paul, Minn.

Denton A. Cooley, M.D., can still remember the bouts of insomnia that followed his brush with history on April 4, 1969. On that particular morning, the 48-year-old surgeon implanted an artificial heart into an ailing Skokie, Ill., man named Haskell Karp. The device--a monstrosity of plastic and polyester fiber linked to a bedside control console the size of a washing machine--kept Karp alive for three days, longer than any animal in which it previously had been implanted.

"It's hard to sleep after an experience like that," Cooley said in an online video posted by Modern Climate, a Minneapolis, Minn. based consumer-centric advertising agency. "The period of excitement stays with you and it's not uncommon to be lying awake at 2 or 3 o'clock in the morning with your brain still thinking about the patient experience."

The patient experience vastly has improved in the four decades since Karp lost his heart to science (he technically lost it to Cooley, but the surgeon was working for the benefit of science so it's basically a wash). Though today's artificial hearts have become more proficient at keeping patients alive, they nonetheless remain a "bridge to transplant"--devices that keep the body functioning until a matching organ can be found.

In the Modern Climate video, Cooley compared his generation of cardiac surgeons to NASA astronauts, claiming both professions explored previously unchartered territory (for astronauts, it was the moon; for Cooley and his colleagues, it was the more mysterious engine of human life).

Neither group had an easy task. Those that reached for the moon were forced to overcome the physical and physiological challenges of space travel, while the group that stayed on earth had trouble designing the proper heart valve.

"We had many problems with those early designs of valves, beginning with the Starr-Edwards ball and cage design. I remember you could almost hear them across the room if the patient opened his mouth," Cooley recalled. "But the St. Jude valve was more or less solid... I don't know of any valve that is better--the St. Jude valve design has stood up very well through the years. In my mind, you don't desert an old friend like this valve."

Professional desertion has never really been a problem for St. Jude. Since the introduction of its first mechanical valve (the Regent) in 1977, the company has accumulated a loyal following of doctors who have implanted its valves in more than 2 million patients. Such devotion has helped the St. Paul, Minn.-based firm become a leading developer and manufacturer of cardiac devices, with customers in more than 100 countries worldwide.

That allegiance also was likely partly responsible for an 8.6 percent increase in sales last year. Revenue climbed $446,925 to $5.6 billion and gross profit rose 8.6 percent to $4 billion, the highest in company history. Net earnings fell 9 percent to $825.8 million, due mainly to a $154.1 million after-tax restructuring charge in the company's Cardiac Rhythm Management (CRM) division, and increased collection risks with European customers.

St. Jude's CRM division was the top-grossing unit in 2011 (year ended Dec. 31), generating more than half of the company's total net sales. But the unit, which sells implantable cardioverter defibrillators (ICDs) and pacemakers, amassed $3.03 billion in sales, an amount nearly equal to 2010. Executives attributed the division's flat sales to CRM market contraction in the United States.

ICD and pacemaker sales were flat as well, rising a nominal 0.2 percent and 0.8 percent respectively, according to St. Jude's 2011 annual report. ICD revenue totaled $1.82 billion while pacemaker system sales stood at $1.2 billion. ICD sales drivers included the Unify cardiac resynchronization therapy defibrillator and Fortify ICD in Japan. Launched in the second quarter of 2011, both devices are smaller, deliver more energy and have a longer battery life than conventional devices.

The CRM division's dismal performance reflects a continued slump in the U.S. market for heart-related devices. While the seeds for the slump were planted well before 2011, the market slide rapidly deteriorated during the first three months of 2011, shortly after the January publication of a Journal of the American Medical Association article that questioned the need for ICDs. The story cited a study that showed 22.5 percent of patients typically fall short of the medical guidelines necessary to receive the $25,000 devices. The findings did not determine a reason for such a high rate of non-compliance with the guidelines, but author Sana M. Al-Khatib, M.D., offered an explanation to The New York Times, blaming the failure on physicians' lack of knowledge and awareness of Medicare's National Coverage Determination criteria. Such ignorance--as startling as it is sobering--certainly contributed to weak demand for ICDs in the first three months of 2011, but other factors in place long before the ]AMA article was published very well could explain lower device sales last year.

One such factor was an investigation by the U.S. Justice Department into hospitals' ICD billing to Medicare; another was the government's prosecution of St. Jude Medical for allegedly paying kickbacks to entice doctors to implant the company's pacemakers and defibrillators (the firm agreed in January 2011 to pay the government $16 million to resolve the allegations).

St. Jude's CRM sales slipped 2 percent during the second quarter of 2011 (period ended June 30) to $401 million, a frustrating setback for the company, considering it gained market share from a 2010 decision by Boston Scientific Inc. to stop ICD shipments and pull its field inventory in the United States.

"What we see here is that the U.S. CRM market fell into a pothole during the second quarter," Chairman, President and CEO Daniel J. Starks griped to investors during a summertime conference call to discuss the firm's Q2 results. "Twenty-eight percent of our sales fell into a pothole."

Fortunately for St. Jude, that pothole was limited to the CRM market. The company's Cardiovascular division experienced explosive growth last year, garnering $1.3 billion in sales, a staggering 29 percent increase compared with 2010. Robust sales of vascular products and structural heart devices were responsible for the division's skyrocketing growth rate--each posted double-digit sales increases. Vascular product sales jumped 10 percent to $740 million due to higher demand of vascular plugs and optical coherence tomography products as well as $34.6 million in favorable foreign currency translation. Lower sales of the company's Angio-Seal active closure devices prevented further gains in vascular product revenue.

Structural heart device sales ballooned 63.7 percent to $597.3 million. Executives attributed the surge to vigorous sales of AGA Medical's Amplatzer occluder products (St. Jude purchased AGA Medical in November 2010 for $1.1 billion) and solid demand for the Trifecta tissue valve, which was approved by the U.S. Food and Drug Administration in April 2011. The valve, designed to optimize blood flow, is made from a polyester and tissue-covered titanium stent, or base. The valve contains leaflets manufactured from bovine and porcine pericardial tissue that attach to the outside of the stent, a design the company claims allows the leaflets to open more fully and efficiently, mimicking the performance of a healthy aortic heart valve and limiting tissue abrasion through stent-to-leaflet contact.

St. Jude's Atrial Fibrillation (AF) division posted solid gains last year, but it couldn't match the upsurge in the Cardiovascular unit. AF sales totaled $822 million, an increase of 16 percent compared with 2010. On a constant currency basis, AF product sales increased 12 percent in 2011.

Sales drivers in this unit included the EnSite Velocity System and related connectivity tools (EnSite Connect, EnSite Courier and EnSite Derexi modules) as well as Safire BLU and Therapy Cool line of EP irrigated ablation catheters.

The Therapy Cool Path Duo and Satire BLU Duo are sterile, single use 7 French catheters constructed of thermoplastic elastomer material and four noble metal electrodes. The catheters have a through-lumen connected to open conduits at the 4-millimeter tip electrode for heparinized saline irrigation during the ablation procedure.

The catheters are inserted into a blood vessel, usually though a site in the upper leg or neck. The catheter is manually advanced through the blood vessels until it reaches the correct location inside the heart. Once the site is identified, the devices deliver radio frequency energy to destroy small areas of tissue blocking the heart's internal electrical signals that cause typical atrial flutters.

St. Jude's Neuromodulation division trailed its brethren in sales but still delivered a notable performance in 2011, earning $418.3 million, a 10 percent increase compared with FY2010. International neuromodulation product revenue expanded 30 percent, driven by gains in the Eon Mini platform and growing market acceptance of the Epiducer Lead Delivery system, which gives physicians the ability to place multiple neurostimulation leads through a single entry point.

2 million+ Number of patients with mechanical heart valves made by St. Jude Medical Inc.
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Title Annotation:p. 50-96
Author:Delporte, Christopher; Barbella, Michael; Arrowsmith, Niki
Publication:Medical Product Outsourcing
Article Type:Cover story
Geographic Code:9CHIN
Date:Jul 1, 2012
Words:25260
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