By Becky Hurley
CEO Scott Drake
No. of employees: 620
With over 600 employees and products used around the globe, medical device maker Spectranetics leans on talent and 'strategic clarity' to sustain growth
Three years ago Spectranetics’ (NASDAQ - SPNC) stock prices hovered near five dollars per share. Today shares trade at $24 per share and are considered a “Buy,” according to Marketwatch.com. In 2011, management reported the corporation’s “Vitality” Index stood at 5.8 percent; today it is 24 percent.
So what products and strategies are driving the Colorado Springs-based medical device manufacturer’s resurgence?
Its single-use products work with laser technology to open arteries and prevent amputations or enable heart surgeons to safely implant or extract Pacemaker wires or “leads.”
“Simply put, our products clear blockages in the legs and heart,” explains Spectranetics CEO Scott Drake.
The manufacturer’s top revenue generator is its vascular intervention technology. Spectranetics products are used by medical practitioners in 40 countries around the globe.
The life-altering nature of its products and the company’s complex technology took years to perfect, Drake points out.
Robert Glolobic, Ph.D, a United States Air force physicist and Johan Sverdrup, a Hewlett-Packard engineer, Spectranetics founded the company 30 years ago. They were pioneers in exploring how ultraviolet lasers could be used to clear blocked arteries. By 1989 their early technology was approved by the Food and Drug Administration.
During manufacturing, cylindrical glass is super-heated in ovens, honed to the width of a human hair and wound on to spools – all under tightly controlled laboratory-like conditions. Last year the company produced 170 separate laser systems, each about the size of a small copy machine. That’s up 30 percent over 2012 totals.
And just last month the FDA approved Spectranetics’ two new mechanical lead extraction platforms – TightRail™ Rotating Dilator Sheath and SightRail™ Manual Dilator Sheath – that will add new safe and affordable options for physicians around the world.
Drake and Chief Financial Officer Guy Childs credit the company’s success to a focus on attracting and maintaining “the best talent on the planet,” to operating with “wicked” strategic clarity, to executing as if lives depend on their products and to approaching their business “thoughtfully and purposefully.”
They also give full credit to their “teammates” at every level of the organization for the corporation’s exemplary reputation, quality and consistency. About 60 team members work in product development. Another 400 are focused either on manufacturing, quality and operations or on the company’s sales, marketing and field service engineering divisions who maintain about 1,200 laser systems worldwide (850 of those are in the United States). That team is poised to expand considerably based on Spectranetics announcement this week of its intention to acquire specialty scoring balloon company AngioScore.
Many of its vendors and suppliers – often the case in specialized medical device manufacturing – are also considered “partners.”
Market potential for the two newly patented products looks good. To date, 70 percent of revenues are generated by VI sales and 30 percent by lead management products. But that balance could shift as the market for mechanical treatment devices builds, especially in developing nations.
Challenges: “Working within strict regulatory guidelines and time frames to get TightRail™ and SightRail™ in production and out to a waiting market,” Drake says.
Opportunities: “Spectranectics’ current EXCITE ISR trial is nothing short of a landmark study for the industry. The data has the power to change clinical practice and to improve patient care in treating in-stent restenosis. With our competitors contra-indicated, we are uniquely positioned to capitalize on a $750 million opportunity.
Needs: “Based on the demand we are seeing for mechanical lead management as well as laser technology, we will definitely need to continue to expand our global sales force and field engineering team.”