Unless you are a surgeon, a hospital purchasing manager or a medical products distributor, the name Terumo Medical Corp. is unlikely to ring a bell.
But Juichi “Jim” Takeuchi, 49, president of the U.S. subsidiary of the $3.3 billion Japanese medical device maker, wants to transform his company into a top-rung player. In getting there, he said he’s banking on strong support from his parent company’s R&D pipeline of new products and a sharper marketing focus.
Takeuchi wants Terumo to be at the top of the U.S. market for some of its main products, which include catheters, wires, sheaths, syringes, needles and transfusion products. The company already has logged significant gains in the United States since Takeuchi took the reins three years ago; revenue has grown a compounded 17.5 percent annually in the past three years, to $300 million, in the year ended March 2009, the company said.
Terumo also has grown its work force in New Jersey — its U.S. headquarters is located in the Somerset section of Franklin Township — from about 100 three years ago to 140, mostly in sales and marketing, regulatory affairs, and engineering, Takeuchi said. The company has 635 employees across the United States, including at its manufacturing facility in Elkton, Md., and research operations in Fremont, Calif., he said.
Darren Navarro, a senior analyst at Millennium Research Group, in Toronto, said Terumo’s focus on growing its U.S. business is understandable, given the saturation in its home country, where it is the second-largest company in its industry. “Its Japanese revenues are growing at about 2 percent, whereas in Europe and North America, the growth is in double digits,” he said.
Takeuchi said his sights are on a potential “$600 million U.S. opportunity” for diagnostic and interventional products. It already has a 38 percent share in that $420 million market, according to a company statement.
“I want to be at least a strong number-2 in some interventional product segments,” Takeuchi said, such as the “lesion access” category for cardiovascular products, where Terumo already has a dominant presence in several niches. “Terumo’s strengths are in coatings that avoid damage to [blood] vessels,” he said.
Takeuchi is especially bullish about Terumo’s products like its “guide wires” in the so-called transradial access market. In a traditional angioplasty, surgeons use the large femoral artery in the thigh, but transradial technology allows doctors to use narrower arteries from the wrist, he said. In September, the company launched a program specifically to market these products.
Takeuchi also said he sees a chance to become a top provider in the transfusion products business, where it supplies mostly hospitals and blood banks. He is betting on big support from the R&D pipeline of his Japanese parent to approach that goal, as Terumo has a long way to go — its owns a 6.6 percent share of that $660 million U.S. market.
“Terumo’s strongest presence is probably in blood products, accessory devices like guide wire and catheters, and they make up 40 percent of its sales,” said Navarro, who tracks some of the company’s product segments. “The markets for interventional devices are growing, because they are minimally invasive and are alternatives to surgery.”
But Terumo will face stiff competition from entrenched rivals such as Boston Scientific, Medtronic, and Cordis, which have annual or multiyear supply contracts with hospitals — the biggest buyers of medical products, said John Simon, senior product manager at Biocoat Inc., a Horsham, Pa.-based maker of medical products.
“If somebody comes in and offers a better price, the hospital could say it is getting a discount on 50 other products from its current manufacturer,” said Simon, also an adjunct professor of medical device development at the New Jersey Institute of Technology, in Newark. “What purchasing managers care about is the overall amount of money they can save for their hospitals.”
And cracking that market is tough, said Alpaslan Yaman, principal consultant at Biotech Pharma Device Consulting, LLC, in Parsippany. While the Japanese “have shown the capacity to come up with truly innovative devices,” breaking into the hospital market “is about building relationships and trust, not just quality and cost,” he said.
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