Recently, Kinetic Concept’s (KCI) latest Negative Pressure Wound Therapy (NPWT) product V.A.C. Via secured reimbursement status in UK and will be listed in the UK Drug Tariff, effective August 1, 2011. The company believes this reimbursement decision of the UK health authorities will prove beneficial for the healthcare community as well as patients given its lower pricing and positive clinical results from V.A.C. Via.
Kinetic continuously seeks to develop and commercialize its V.A.C product line. During 2011, the company launched its next-generation NPWT product V.A.C. Via Therapy system in the US and in selected European markets. This is Kinetic’s first single-patient-use disposable system, which uses its proprietary Vortis micro-pump technology. Moreover, the company intends to expand the V.A.C. therapy product line with the launch of V.A.C. Ultra Therapy System in 2011.
During the first quarter of 2011 the Active Healing Solution (AHS) segment contributed $340.5 million to revenues with $257.9 million coming from North America while EMEA/APAC accounted for the rest. While revenue derived from the North American market increased 3%, EMEA/APAC revenue remained mostly flat primarily due lower average rental pricing and lower disposables volume in price-sensitive and highly-competitive markets, partially offset by an increase in rental and sales volumes arising from successful product launches in new geographic regions, especially Japan.
The company plans to penetrate the existing as well as newer geographic markets with the expansion of its product offerings. Significant expansion efforts on the company’s part were witnessed during the quarter. In the APAC region, AHS business witnessed a surge of 70% in sales during the quarter primarily driven by significant growth in the large and under-penetrated Japanese market with V.A.C. Therapy and related disposables.
The company expects to derive more than $25 million in revenues from Japan in 2011. The company also launched the NPWT products commercially in China and India. The company has begun looking for several opportunities to set up appropriate networks to launch NPWT products in other emerging markets going forward.
Consistent with its strategy of geographic expansion, earlier this month, Kinetic’s Germany entity, KCI Medizinprodukte GmbH won three of the four regional contracts for its NPWT products, granted by Germany’s largest state health insurer. According to German regulations, three out of the four contracts was the largest award possible.
However, Kinetic continues to face challenges in the form of economic uncertainty and pricing pressures.
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