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Surgical looks at sale of blood division
KEYHOLE surgery specialist Surgical Innovations is considering selling off its blood transfusion business, which allows patients to donate their own blood ahead of major surgery.
The Leeds-based company has appointed a consultant to review the business and decide whether to sell or develop it.
The division specialises in Autologous Blood Transfusions, whereby a person's blood is cleaned, filtered and returned.
The process allows quicker recovery times as the patient is not dealing with a foreign entity, it is cheaper and there is no risk of mismatched blood. The group said it will make a decision on whether to keep the business before the end of the year.
Surgical Innovations has seen strong demand in the core part of its business – making instruments for keyhole surgery – and reported a record order book yesterday.
In the year to the end of 2008, the company's revenues were 4.3m, down from 4.8m recorded the year before.
But pre-tax profits increased by 12 per cent to 820,000.
The fall in sales was blamed on a move to new premises in Leeds and the group said it is looking for an immediate return to sales growth in 2009.
Chairman Doug Liversidge said the factory move last Spring had caused considerable disruption and the group lost sales as a result. But the move has improved the company's capacity by a factor of five and created 10 new jobs to bring the total workforce to 52.
The group's latest product is the patented 'resposable' instruments. These are a halfway house between disposable and re-usable tools.
"In the US everyone throws instruments away after one use, whereas in Germany all the instruments are re-used," said Mr Liversidge. "This is a halfway house that is very cost effective."
The resposable instruments have been likened to a razor – you keep the razor handle, but replace the blade part after several uses. "We're the Gillette of the medical business," said Mr Liversidge.
The product is being sold globally although the US market is proving very slow to change.
"We've converted a couple of US hospitals," said Mr Liversidge. "American hospitals need to change because of the economics of the US medical system."
A key area of growth for the company is gastric bands to overcome obesity.
Just 200 patients received gastric bands in 2004, but this leapt to 2,400 last year, a 40 per cent increase on the previous year as obesity becomes a major challenge for the NHS.
The UK market is relatively small as some 200,000 bands have been fitted worldwide.
Mr Liversidge said he was looking forward to the coming year with confidence.
"In times of great difficulty, we are in a great position," he said. "We have the best ever order book, we are creating jobs in Yorkshire and we're bringing new designs to the marketplace."
Analyst Barney Gray at Hanson Westhouse said: "Surgical Innovations staged a remarkable recovery in the latter part of 2008. The key driver of this rally was the company's re-location to new, larger premises which transformed the design and manufacturing process with substantially increased efficiencies.
"The company has sustained this momentum into the current year and we expect it to make continued progress in the face of a tough economic background in 2009."
Need for longer instruments
It's a grim fact, but when you operate on a morbidly obese person you need extra-long instruments to get past the mounds of fat and flesh.
But it's good news for keyhole surgery specialist Surgical Innovations which is seeing bumper sales of longer instruments.
As more people become obese in the UK, Continental Europe and the US, demand for Surgical Innovations' instruments is expected to increase. The UK appears to be following the US trend towards obesity.
The company's portholes and instruments allow surgeons to undertake tricky surgery such as stomach stapling and the less-invasive stomach banding.
It has also launched a new device called LogiFlex that helps deploy gastric bands.
The device goes round the back of the stomach and completes the band, clicking the two ends together in a fail-safe device.
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