Getinge has initiated a gradual phaseout of its surgical perfusion business, to focus on more profitable growth areas such as extracorporeal life support (ECLS) and transplant care.
During a Jan. 28 earnings call, Getinge CEO Mattias Vadsten described surgical perfusion — technology that temporarily supports or replaces a patient’s heart and lungs during surgery — as a struggling category since a consent decree caused them to exit the U.S. market a decade ago.
“We’re proud of our legacy and the products within this field. But unfortunately, we have been challenged gradually during the last 10 years, actually, with a steadily decreasing market share and eroding margins,” Vadsten said.
Meanwhile, Gothenburg, Sweden–based Getinge reported impressive growth from transplant organ preservation tech company Paragonix Technologies, which it acquired for up to $477 million last year.
Vadsten, meanwhile, described surgical perfusion as a loss-making category. “We don’t feel that we’re good owners of this anymore, and the effect of withdrawing from this segment is that we actually free up competency and resources for transplant care and for ECMO.”
Surgical perfusion had SEK 450 million ($42.6 million) in sales last year, according to Vadsten. That would make it 1.3% of the company’s total SEK 34.759 billion ($3.29 billion) in annual sales. (Overall sales were up 4.9% last year, with net profits down nearly 32% to SEK 1.654 billion ($156 million).
Getinge management has shared the plans to phase out the business with relevant employee representation bodies and employees in line with local labor regulations, according to Vadsten. “The final decision on the restructuring is dependent on the outcome of negotiations with the employee representation bodies.”
The company did not disclose a headcount of how many employees are affected.
Analysts described Getinge’s move as good news for surgical perfusion competitor LivaNova. Mike Matson, senior research analyst at Needham & Co., said: [LivaNova] has been gaining share with its Essenz heart-lung machine and increased oxygenator production capacity, and we expect it to gain additional market share as Getinge exits the market.”