Surgical Innovations does five-year deal for US sales

SURGICAL Innovations, the keyhole surgery equipment manufacturer, has signed a £5m five-year deal with its distributor in the United States.

The Leeds-based group, which makes devices for use in minimally invasive surgery, has signed a five-year extension to its agreement with SI US, the group’s exclusive US distributor.

In order to maintain exclusive rights, SI US has committed to distribute Surgical’s branded products worth at least £5m over the period.

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SI US will distribute the group’s Logi and LogiCut product ranges together with its reusable line and has been granted first refusal on all future Surgical’s branded products for the next five years.

Surgical retains the right to manufacture and distribute all devices under the Surgical Innovations brand in all other markets.

Graham Bowland, chief executive of Surgical, said: “This agreement extension with SI US strengthens the group’s strategy of developing our “resposable” portfolio in the strategically important US market and gives us confidence for the future.”

Many of the company’s devices, including its flagship YelloPort+plus keyhole surgery system are “resposable”, which means they include disposable and re-usable elements.

“We look forward to developing our partnership with SI US over the next five years,” added Mr Bowland.

Surgical has continued to invest in its manufacturing facilities as well as pumping money into its research and development capacity.

The company is in the process of establishing new markets in New Zealand and Saudi Arabia and has signed up a new distributor in South Africa with one of the largest health insurers in the region.

Chairman Doug Liversidge said that YelloPort+plus continues to do well in the US and Europe, while a number of new products are also being developed.

The group sees its relationships with big US medical companies as key to delivering better profits and sales.

It is increasingly coming onto the radar of groups such as Telflex and Olympus. Surgical makes devices under these groups’ brands, but retains the intellectual property over the technology, helping it to earn higher margins.

The company, listed on the Alternative Investment Market, is considering acquisitions to help maintain this momentum.

Surgical believes its growth is being helped by pressure on healthcare providers to cut costs.

“We’ve welcomed the cost pressures around the world that are coming into play, ” said Mr Bowland. “As hospital budgets get tighter in the US where reimbursement levels are dropping, we come into our own.

“We’ve got a real reputation in the market place for being a world-leader in minimally invasive. We’ve got a lot of people visiting the factory.”