Here are some of the top stories at MedCity News this week:
— Wanna buy a medical device startup? A down payment would be nice. As competition for medical device acquisitions heats up, Medtronic Inc. (NYSE:MDT) and Boston Scientific Corp. (NYSE:BSX) are redeeming early bets on promising startups.
— During a conference call with analysts last week, Medtronic Inc. (NYSE:MDT) CEO Bill Hawkins extolled the company’s operations in China: $500 million in annualized sales, 20 percent yearly growth rate, a state-of-the-art patient center in Beijing, and a shiny new headquarters in Shanghai. It wasn’t so long ago that medical device firms spoke in equally glowing terms about Ireland. Today, Ireland’s economy lies in ruins, a victim of shaky banks and severe recession.
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— Medtronic Inc. spinout Inspire Medical Systems Inc. has received the go-ahead from regulators to sell its obstructive sleep apnea device in Europe and test it for the U.S. market. CE Marking in hand, the Maple Grove, Minnesota, device developer expects to mount a market development push for its Inspire Upper Airway Stimulation therapy in Europe near year-end 2011.
— Arteriocyte Inc. has launched a stem cell-based product that allows researchers to grow red blood cells outside the human body. The product, NANEX, is available only for research use and is engineered to create blood cells like bone marrow. “This product is the first internally developed product that Arteriocyte has placed on the market to date,” said Adam Sorkin, a company spokesman.
— Two Ohio hospitals were among 65 named to a coalition of healthcare buyers’ list of the top U.S. hospitals, in terms of quality and safety.The Christ Hospital in Cincinnati and the Ohio State University Comprehensive Cancer Center in Columbus took the honors from Leapfrog Group, which advocates for employers that purchase healthcare.
Today, Ireland’s economy lies in ruins, a victim of shaky banks and severe recession. Earlier this week, after much reluctance, the Irish government officially applied for a bailout from the European Union worth over $100 billion.Obviously, no country wants an economic bailout because there is no such thing as a free lunch. A rescue package likely means conditions the recipient isn’t going to like. And in Ireland’s case, that could mean the end of its beloved 12.5 percent corporate tax rate, the lowest in the EU and the reason why foreign companies flocked to the country in the first place.
[UPDATE: Ireland Wednesday unveiled its budget plan, which raises personal income taxes and cuts spending, but leaves its corporate income tax in place. However, such an austerity program could depress consumer demand and worsen the unemployment rate.]
But like fellow EU member Greece, Ireland lacks money to run its government and may need to raise taxes.
Ireland’s other attractive asset, its educated and highly skilled workforce, is disappearing. A poor economy has forced its people to seek jobs abroad. Experts say about 65,000 people left Ireland last year, and some estimate that the number may be more like 120,000 this year.
To be sure, medical devices remain a crucial component to Ireland’s economy. The country boasts the highest per capita employment of medical technology workers in Europe, with more than 25,000 employed in the industry. Medical devices exports totaled $8 billion last year.
Medical device makers are unlikely to leave anytime soon. Medtronic spokesman Brian Henry said Ireland’s bailout woes has not impacted its operations.
But how long can that possibly last? With its economy in tatters and skilled workforce in jeopardy, Ireland, to put it kindly, is no longer the medical device mecca it used to be.
After all, a country that applies for a $100 billion bailout doesn’t exactly inspire confidence in foreign investors.
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