HME News

APR 2018

HME News is the monthly business newspaper for home medical equipment providers. This controlled circulation publication reaches 17,100 home medical equipment services providers, including traditional HME dealers & suppliers, hospital- and pharmacy-o

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Vendors 22 www.HmEnEwS.COm / APrIL 2018 / HmE nEwS Inogen addresses international growth HOLLIsTER MINIMIZEs WOUND CARE CONTINUED FROM PAGE 21 Periodicals postage paid at Yarmouth, ME and additional mailing offi ce. HME News (ISSN 10913823) is published monthly by United Publications, Inc., 106 Lafayette St., PO Box 998, Yarmouth, ME 04096; 207-846-0600. Publisher assumes no responsibility for unsolicited material or prices quoted in the magazine. Contributors are responsible for proprietary classifi ed information. ©2018 by United Publications. All rights reserved. Reproduction, in whole or in part, without written permission of the publisher is expressly prohibited. Reprints may be obtained from The YGS Group at 717-505-9701, ext. 100. Back issues, when available, cost $7 each within the past 12 months, $12 each prior to the past 12 months. Back issue orders must be paid in advance either by check or charged to American Express, Visa, or Master Card. HME News is distributed without charge in North America to qualifi ed home medical equipment providers. Paid print subscriptions to those not qualifi ed cost $65 annually to the U.S. and Canada and $150 to all other countries. All payments must be made in U.S. funds drawn on a U.S. bank. For subscriber services, including subscription information, please call 800-869-6882. POSTMASTER: Send address changes to HME News, PO Box 1888, Cedar Rapids, IA 52406-1888. meDTRADe BOOTh 454 By Liz BeauLieu, editor GOLETA, Calif. – Company officials at Ino- gen provided color on their international growth plans during their Feb. 28 confer- ence call to discuss their fourth quarter fi nancial results. THE FOX AnD InOGEn President and CEO Scott Wilkinson noted that in the fourth quarter, Inogen began using a contract manufacturer, FoxConn in the Czech Republic, to manufacture its Inogen One G3 for the European market. "In 2018, we expect Foxconn to produce the vast majority of the Inogen One G3 con- centrators required to support our European demand and we are very pleased with their productivity, cost, service and quality at this stage," he said. Inogen expects to maintain its assembly operations for its Inogen One concentra- tors and Inogen At Home concentrators at its facility in Richardson, Texas, and for its compressors and sieve bed columns at its INOGEN EARNs C O N T I N U E D F R O M PA G E 1 activities to increase consumer aware- ness, as we believe this is still our most effective means to drive growth of direct-to-consumer sales," said Scott Wilkinson, CEO and president. Inogen's DTC business was the clear leader in the company's recent fi nancial results, with sales increasing 57% in the fourth quarter of 2017 compared to the fourth quarter of 2016. Sales increased 46.1% for the company's domestic B2B business. Inogen's growing DTC sales team, as well as an increasing marketing and advertising spend that was $4.4 million in the fourth quarter of 2017 compared to $1.7 million for the fourth quarter of 2016, sets the stage for the business to post even bigger numbers in 2018, something that's refl ected in the com- pany's increased guidance for the year to $298 million to $308 million in rev- enues, representing growth of 19.5% to 23.5%. "Our limit to creating additional con- sumer awareness is tied to sales capac- ity," said Ali Bauerlein, co-founder and CFO. "So we add that additional sales capacity and we spend more in market- ing to drive more leads to fi ll that sales capacity. We feel we're a long way from full saturation in direct-to-consumer sales." facility in Goleta, Calif. " e Foxconn production will allow us to expand our manufacturing capacity and redirect our U.S. manufacturing activities to focus on growth domestically and on our latest product, the Inogen One G4," Wilkin- son said. "While still early in our relation- ship with Foxconn, we are already delivering improved service levels and lower costs." THE ALLUrE OF CHInA Wilkinson said on the 10-year horizon, Inogen has its sights set on cracking the POC market in China, which could be huge due to its large population and a large percentage of smokers, not to men- tion issues with air quality. "Today there's no reimbursement for portable oxygen therapy in China, but long term we expect that that would be established," he said. "In the short-term, there could be a retail opportunity, so we are right now working on registration for China, but that is a long-term growth opportunity." hme With Inogen's DTC business going gangbusters, analysts asked company offi cials why they still hang on to their business as a provider renting POCs to Medicare benefi ciaries, with all its chal- lenges. The company reported rental revenues of $5.4 million for the fourth quarter of 2017, a 34.1% decrease com- pared to the fourth quarter of 2016. "As you know, we've deemphasized (that business), but we haven't given up on it," Wilkinson said. "From a strate- gic standpoint, it opens up access to our products to patients because there are still some patients that do want to use their (Medicare) benefi t and we don't want to completely screen them out. It also sets us up to continue to walk in other providers' footsteps, so we better understand their business." Also, "way out in the future," as POCs become the main mode of oxy- gen therapy, Inogen's rental business will become increasingly important, Wilkinson said. "If everybody is able to get a POC from their traditional homecare provid- er, it will be more diffi cult to sell some- body a POC from a retail standpoint," he said. "So we do see rental as still our long-term future, at least in oxygen therapy. Once we hit a conversion point with POCs, then we'll need to back fi ll with other disruptive products that we can leverage the expertise of that sales force and still drive growth." hme Hollister will continue to sell and distribute the other wound care products in its portfolio, according to the release. A letter to customers, also dated Feb. 2, echoed much of the release, but added some color, including: "After extensive analysis and discussions, we have concluded that we will no longer pursue a path forward to build the wound care business." Hollister tells customers to continue order- ing Hollister wound care products as they do today "until further notice." At press time, Hollister still had not announced the new owners, but Hydrofera co-founder Tom Drury and a group of inves- tors reportedly bought back the Hydrofera business in a deal that closed Jan. 31, accord- ing to news reports. Drury had stayed on as Hydrofera's COO after Hollister bought the business in 2012. He retired from the company in 2016. He'll now serve as Hydrofera's CEO. hme Our custom Z-Axis seats and backs are PDAC approved and designed for pediatric and adult populations. Z-Axis backs and Z-Axis seats are sold separately, but can be integrated into one system. Simply mold and capture shape with the Z-Axis Scanner and email or upload your file.

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