$3.64 Billion
Prior Fiscal: $2.85 Billion
Percentage Change: +27.7%
No. of Employees: 10,818

Getinge has been removed from this annual MPO list for a couple of years. Sales have remained positive, but other firms experienced greater growth and bypassed it. The conversion from Swedish Krona to U.S. currency has not always worked in the firm’s favor either. While it’s exciting to see it return to the list, the primary reason for it is unfortunate—increased ventilator demand due to COVID-19.

In mid-March 2020, Gettinge announced it would temporarily increase its production capacity at its facility in Solna, Sweden, by 60 percent (compared to 2019) in order to help address the rapidly growing demand. Once the pandemic really started exploding, the company said it saw rising need for ventilators, extra corporeal life support (ECLS) equipment, and advanced monitoring for Intensive Care Units (ICUs).

By early April, the company expanded on its goal for ventilator production, committing to producing 26,000 by the end of the year (a 160 percent increase over 2019’s 10,000 units). “We continue to ramp up to be able to respond to the increasing demand from our customers,” explained Elin Frostehav, VP Critical Care at Getinge. “We work closely with our sub-contractors and the ramp up is of course pending availability of supply parts.”

Another variable in its ability to meet its goal was available labor force. As such, the day after the second production increase announcement, Getinge stated it had entered into a partnership with Scania. The agreement, which would run through the end of the year, involved the temporary hire of Scania personnel to support Getinge’s ongoing ramp up of its ventilator production. Scania is a provider of transport solutions with 50,000 employees in about 100 countries. The deal between the two organizations moved approximately 30 people from Scania to Getinge.

Getinge was involved in the fight against COVID-19 in other ways as well. It joined with fellow ventilator manufacturers—Dräger, GE Healthcare, Hamilton Medical, Medtronic, Philips, Vyaire Medical, and Nihon Kohden—to form a Ventilator Training Alliance (VTA) to provided frontline medical providers a centralized repository of ventilator training. The VTA app—powered by learning and readiness platform provider Allego—connected respiratory therapists, nurses, and other medical professionals with ventilator training resources from alliance member companies. The content included instructional how-to videos, manuals, troubleshooting guides, and other ventilator operation expertise critical to treating patients suffering from COVID-19-related respiratory distress. By October 2020, the app had surpassed 60,000 downloads.

Getinge also enabled ventilators in its Servo family to be connected to the Getinge Online platform. The goal was to maximize ventilator uptime and help biomedical equipment service technicians stay safe during the pandemic by being able to solve issues remotely, without having to enter ICUs.

The additional production of and demand for Getinge’s products used in the fight against COVID-19 were, as mentioned, directly responsible for the increased net sales the company saw in 2020. The firm finished the year with SEK 29.8 billion, an organic increase of 14.3 percent over 2019’s SEK 26.6 billion.

Among the business units, Acute Care Therapies enjoyed the largest gain, as it is home to the equipment that was in high demand during the pandemic. The segment saw 32.1 percent organic gain year-over-year, growing from SEK 14.6 billion in 2019 to SEK 18.7 billion in 2020.

Life Science—which includes products and services for pharmaceutical bioprocesses as well as contamination prevention offerings across several industries including medical device manufacturing—saw sales rise 3 percent organically. That translated to SEK 2.49 billion in 2019 to SEK 2.85 billion in 2020.

The third business, Surgical Workflows, offers products and solutions for optimizing the quality, safety, and capacity usage of the sterile supply departments and operating rooms. Given the decrease in elective procedures during the pandemic, a 10.3 percent organic decrease was to be expected. The unit dropped from SEK 9.4 billion to SEK 8.25 billion in Getinge’s most recent fiscal.

For as busy as Getinge was to achieve those increased financial figures in its production of equipment and technologies to battle COVID-19, the firm was also occupied with replenishing innovation for healthcare and getting new products to market that would continue to be required beyond the pandemic.

The Maquet Meera CL, a new OR table that comes with a smart hand control to improve usability, was launched in January 2020. It offers a simplified table base with a mechanical locking system and manual leg movement. The design brings all essential functionalities needed, ideal for hospitals looking for price competitive options.

The firm also launched Torin, a complete OR management software that helps surgical departments advance their surgery planning, execute efficiently on schedule, and continuously improve the utilization of resources in and across collaborating departments. It automatically checks for resource and staff conflicts to avoid double bookings as well as inconvenient and expensive waiting time. Additionally, it provides a business intelligence tool that enables management to identify trends and potential inefficiencies and act accordingly.

In May, Getinge introduced a range of consumables for sterile reprocessing. Getinge Assured Superfast 20 Biological Indicator speeds up the ability of the Central Sterile Supply Department to release loads safely, ensuring sterile instruments can be in the right place at the right time.

The company’s Servo-air mechanical ventilator received 510(k) clearance from the U.S. Food & Drug Administration (FDA). The unit joins Getinge’s Servo family, which is used for intensive care ventilation. Intended for pediatric and adult patients, it includes both Invasive and Non Invasive ventilation modes. Servo-air also features options for High Flow therapy and Servo Compass, which allows lung protective ventilation and makes it easier to follow the ARDSnet protocol.

Seeking to address surgery backlogs created by the pause of elective surgeries due to the pandemic (potentially 30 million cancelled or postponed surgeries worldwide in 2020), Getinge offered Torin OptimalQ. This product is a cloud-based software solution that merges customer waiting list data with Getinge knowledge base information on average procedure duration and best planning practices. Matched with patient scorings and hospital capacities, Torin OptimalQ calculates the best way to prioritize the surgery schedule per OR, week, or service.

The company also gained FDA clearance for its Flow-e and Flow-c Anesthesia Systems. These units offer personalized anesthesia delivery for even the most challenging patients, from neonates and pediatric to the morbidly obese.

Getinge offered a larger diameter size of its Advanta V12 balloon expandable covered stent. The stent has been shown to consistently improve patient outcomes by restoring iliac patency, reducing restenosis and re-intervention rates, improving ankle brachial index, and sustaining symptom relief.

The firm also provided the Solsus 66, a versatile, intuitive, and easy-to-use steam sterilizer. The sustainable and energy-efficient sterilizer can be used for general purpose steam sterilization of surgical instruments, textiles, and hospital utensils with a temperature range of 121°C to 134°C.

To provide continuous and noninvasive hemodynamic insights to reduce the risk of severe complications for patients with low blood pressure, Getinge launched the NICCI. With dynamic parameters like cardiac index, stroke volume variation, and pulse pressure variation, NICCI guides individual treatment decisions. It won a Red Dot Award in 2020 for its design.

Getinge’s OR Integration solution Tegris impacts hospitals by improving efficiencies in the operating room, reducing costs, and lightening the administrative burden. Over the years, the Tegris software has evolved significantly to meet customer requirements and emerging trends. With the latest release in 2020, Tegris comes with a brand-new generation hardware platform that is fully dedicated to Video-over-IP and supports 4K ultra-high-definition routing and recording.

The organization also introduced a new range of racks to fit inside the stainless steel DPTE Beta Containers, which are designed for efficient loading and unloading into a sterile zone. The racks stabilize items inside the containers while they are transferred and sterilized. The reusable DPTE Beta Containers are engineered for steam sterilization processes.

Like so many of its peers, Getinge also grew through acquisition in 2020. Shortly after ringing in the new year, the company completed its acquisition of Applikon Biotechnology B.V. The deal was reported to be SEK 840 million (approximately 80 million euros) for 100 percent of the company’s shares. In addition, a maximum earn out of approximately SEK 630 million can be paid out in 2021-2022 if agreed earnings performance is achieved. Applikon develops and supplies advanced bioreactor systems for the research and production of vaccines and antibodies in the biopharmaceutical industry, as well as enzymes and bio-plastics for industrial biotechnology.

At the other end of the calendar, in November 2020, Getinge announced it had purchased Quadralene for SEK 75 million. Quadralene is a U.K.-based company founded in 1930 that designs, commercializes, manufactures, and delivers decontamination products globally. Approximately 75 percent of its revenue comes from the healthcare and dental sector and Getinge was its largest customer, accounting for 43 percent of Quadralene’s revenue.

$2.7 Billion
NO. OF EMPLOYEES: 10,684

What’s happened to the “Group”?

Getinge is a company in transition. Its 2017 fiscal year (which mirrors the 2017 calendar year, ending on Dec. 31, 2017) saw the company’s name truncated to just Getinge and a divestiture of its Patient & Post-Acute Care business.

In March, the organization announced it had unified all its current brands under the single Getinge brand. Previous acquisitions led to a number of names included as part of the Getinge Group, including ArjoHuntleigh, Maquet, Lancer, and Atrium, among others. Going forward, all products would carry this newly unified brand name.

“In line with our ongoing transformation to make our company even more customer-centric, we have taken the next step of unifying all of our brands under the single brand of Getinge. This new brand structure will further strengthen our position as a leading global medtech company. Some of these brands, such as Maquet, will become product family names under the Getinge master brand,” said Raoul Quintero, then president of the Americas at Getinge. “As a single-brand company, we will also be better able to convey our full customer offering, which is designed to help healthcare institutions address the challenges they face in today’s ever-changing healthcare environment of expanding healthcare reform initiatives, financial pressures, and accelerated hospital consolidation.”

The company even launched a new logo, inspired by the star of life associated with emergency medical services, as part of its corporate rebranding effort.

Taking the company’s transformation a step further, in October, Getinge announced it would separate into two unique identities. It would split from its Patient & Post-Acute Care (PPAC; previously known as its Extended Care unit), which would form a new entity—Arjo. The plan for this move originated from a strategic review of the firm conducted in the latter portion of 2016. As a result, the Board of Directors determined PPAC, as well as the related area Flusher Disinfection, should be distributed to Getinge’s shareholders.

“I am looking forward to an exciting and successful future for Arjo”, said Joacim Lindoff, president and CEO of Arjo. “Arjo operates in a market with stable and growing demand, where I see opportunities for us to regain a market-leading position within long-term care while at the same time maintaining our strong market positions within acute care.”

Arjo offers devices and services for people affected by reduced mobility and age-related health challenges. In 2016, its sales totaled SEK 7.8 billion and enjoyed a presence in more than 60 countries. The firm’s declared goal at the time of the announcement was to become a market leader in long-term care, while maintaining its position as a provider of acute care.

Regarding the company’s transformative moves and with the announcement of new financial targets given the divestiture, Mattias Perjos, president and CEO of Getinge, said, “I am confident that our revised strategy and financial targets will create a more focused business and organization that is better positioned to develop market-leading offerings for our customers.”

Getinge’s 2017 fiscal report offers the first glimpse of the new organization’s performance and sales benchmarks going forward. Notching SEK 22.5 billion in 2017, the company was relatively flat against its adjusted 2016 figure (accounting for the divestiture of Arjo), which was SEK 22.2 billion. Those sales are contributed to by two businesses—Acute Care Therapies (contributing 54 percent to the company’s total sales) and Surgical Workflows (46 percent)—each of which are broken into four product segments.

The Acute Care Therapies business develops advanced technologies and products for intensive care, surgical interventions, and catheter-based procedures. It is composed of Critical Care (25 percent of the business’ sales), Vascular Systems (20 percent), Cardiopulmonary (23 percent), and Cardiac Systems (32 percent).

The other business, Surgical Workflows, includes operating room equipment, advanced IT systems, and solutions for infection control. Specifically, its product segments are Surgical Workplaces (38 percent of sales), Infection Control (36 percent), Integrated Workflow solutions (5 percent), and Life Science (19 percent). The Life Science unit, which supports pharmaceutical and biotechnology efforts, represents yet another change for Getinge in 2017. According to the 2017 annual report, the company was making investments into the segment, and beginning Jan. 1, 2018, the entity was formed as a separate business area.

Further seeking to ensure its continued success, Getinge announced a strategic partnership in November with Verb Surgical—a company established from the combined technologies of Verily and Ethicon Endo-Surgery. The relationship’s goal is to combine the knowledge of both firms in an effort to offer a revolutionary platform for surgery. Branded Surgery 4.0 (or Digital Surgery), the solution would include robotics, advanced visualization and instrumentation, operating room integration, connectivity, and data analytics/AI.

“Today’s announcement marks a major milestone in Getinge’s technology efforts in providing our customers with state-of-the-art solutions for their patients. As a global leader in medical technology, Getinge is proud to partner with Verb to drive research and innovation to change the future of the medical industry and carry on our legacy as a complete solutions provider,” stated Perjos.

Marking the year with even more change, Getinge said goodbye to CFO Reinhard Mayer, who had been with the company for nearly 20 years. Mayer cited family reasons for his departure. Taking over the role was Lars Sandström, brought in from outside the industry, where he held several senior positions within the finance organization in Scania and served as senior vice president, Group reporting, Tax & Control in the Volvo Group. He officially moved into the role in January 2018.

$3.3 Billion
NUMBER OF EMPLOYEES: 15,582

Replacing a CEO is more than enough to disrupt a corporation’s flow, but replacing the head honcho twice within two years? That has to be quite a difficult environment to adapt to—just as the company has adjusted to one regime, suddenly the corporate culture and mission completely changes again under a new leader.

It all began in March 2015, when Alex Myers was appointed president and CEO, replacing two decades of leadership from Johan Malmquist. In the wake of U.S. Food and Administration (FDA) disciplinary actions, Myers devoted the beginning of his reign to a quality overhaul. All signs pointed to a rebuilding—full-scale production resumed in a biosurgical mesh facility that had incurred previous FDA wrath (even passing FDA inspection the next time around). Myers introduced a “transformation plan” that sought to stimulate growth via business reorganization. The previous business units of Medical Systems, Extended Care, and Infection Control became Acute Care Therapies, Patient & Post-Acute Care, and Surgical Workflows respectively, and most everyone seemed to be on board with the changes.

However, in August 2016, a mere 18 months after Myers had taken the throne, the Board of Directors announced its intent to replace him. In the meantime, Joacim Lindoff (who was then president of Getinge’s Surgical Workflows business) assumed the role of acting president and CEO. According to Bloomberg, Getinge’s stock dropped as much as 6.3 percent that day.

“The Board of Directors and Alex Myers have different views on the future direction of the Getinge Group and the board has therefore concluded that a replacement of the president and CEO is necessary,” Carl Bennet, Getinge’s board chairman, said in a company statement explaining Myers’ departure.

What exactly were Myer’s contentious views? According to Bloomberg, the ambitious restructuring program Myers had initiated might have resulted in attempted divestment of under-performing businesses and assets that didn’t align with Getinge’s strategy. The advantages from that program wouldn’t have been noticed until 2018 at the earliest, but Myers’ directive was crippling orders and revenue in the short-term. But the difference of opinion between Myers and the board concerning Getinge’s future ultimately led to his replacement.

“It’s probably a logical decision when you come to that type of situation,” Myers told Bloomberg. Apart from that, he didn’t offer specific details about the disagreements or the company’s future.

ANALYST INSIGHTS: Getinge is in the midst of a strategic break-up of the company. As they spin off the Patient & Post-Acute Care Group, it is yet to be determined if this is a benefit for the company. While most companies are doing everything to get bigger, Getinge is going the other direction. The question will be whether the increased focus will win or will they lose out by not having the size needed for maximum leverage with their customers?

—Dave Sheppard, Co-Founder and Principal, MedWorld Advisors

Lindoff held down the fort as president and CEO until November 2016, when it was revealed former CEO of Coesia Industrial Process Solutions Mattias Perjos would take the reins. He began his tenure in May of this year.

“It is a great honor to be given the opportunity to lead Getinge Group towards the future,” Perjos said in a company press release detailing the appointment. “Getinge is a great company and I have closely followed its performance over many years. I am aware that the company is undergoing an extensive transformation and I look forward to meeting the challenges and to building a strong Getinge together with its employees.”

The company also underwent a few other notable executive changes during the year. In June 2016, Acute Care Therapies Chief Technology Officer Jens Viebke was promoted to president of the division, succeeding Heinz Jacqui. Reinhard Mayer, formerly president of supply chain and chief financial officer (CFO) of the departed Medical Systems business, became CFO of the Group. And upon Perjos’ installment, Lindoff began a new role as president of Getinge’s newly-established Patient & Post-Acute Care division.

The company’s Patient & Post-Acute Care business (formerly known as Extended Care), which offers solutions for daily tasks of lifting and transferring patients, posted FY16 (ended Dec. 31) revenues of SEK 7.4 billion, falling 4 percent from the previous year. This division supplied 25 percent of Getinge’s SEK 29.7 billion ($3.3 billion) annual sales, which represented a 2 percent loss from 2015. SEK 156 million in restructuring and integration costs for the new business (which were primarily related to measures implemented as part of the ongoing corporate transformation program) had a slight impact on this division’s operating profit, partially accounting for the drop in revenue. This division also completed the acquisition of 1st Call Mobility Ltd., a U.K.-based company that specializes in the sale and rental of medical beds and mattresses for bariatric patients, during 2016’s second quarter. 1st Call historically generated yearly sales of about SEK 100 million, and the purchase consideration amounted to SEK 223 million. The sale is expected to expand Getinge’s U.K. coverage and serve the increasing demand of this fast-growing care sector.

Also during the year, the company’s executive management team began drafting a proposal for potential listing and distribution of the Patient & Post-Acute Care division to shareholders. The final proposal is planned to be presented at the company’s general meeting in autumn, and the listing completed by 2018. Following the possible split, Getinge will be able to concentrate on its remaining Acute Care Therapies and Surgical Workflows businesses.

In 2016, the company’s former Surgical Workplaces and Infection Control segments were merged to form the Surgical Workflows division. The new business develops solutions for infection control, operating rooms, and advanced IT systems for traceability and management of the flow of sterile equipment as well as for optimal use of resources. The Group’s Life Science segment is also included in this business area. Surgical Workflows achieved earnings of SEK 10.5 billion in FY16, dropping 3.6 percent from the year prior. The loss was partially attributed to SEK 253 million in restructuring and integration costs diminishing the operating profit.

During the year, Getinge had major releases in a number of different product segments in this division as well. The company’s Maquet brand released the Meera OR table, awarded the 2016 iF Design Award in the Medicine/Healthcare category. The mobile operating table combines the benefits of Maquet’s Alphastar Pro and Betastar OR tables and adds motorized longitudinal shift, which permits nearly unrestricted radiolucency. Maquet also released a number of new offerings in its Volista surgical light technology during the year, and began distributing TSO3’s Sterizone VP4, a low-temperature sterilizer, in the United States.

The Acute Care Therapies division (formerly Medical Systems) produces solutions for life support in acute care conditions, including products for cardiac, pulmonary, and vascular therapies as well as a broad offering of products and therapies for intensive care units (ICU). Although Acute Care Therapies’ 2016 performance had been strongly affected by Getinge’s previous quality management system woes and the 2015 Consent Decree with the FDA, the division incurred the company’s only revenue gain, exhibiting a 2 percent increase over the previous year with sales of SEK 11.8 billion. The primary fuel for this gain came from the 2016 launch of a new range of ventilators (Servo-U, Servo-n, and Servo-air) that captured market shares.

Servo-U is an intuitive ICU ventilator designed to enhance user confidence in tailoring treatments to individual patients. Servo-U’s set of tools supports protective ventilation strategies, provides context-based guidance and therapeutic workflows, and offers an upgradeable platform. It creates an environment in which more patients in all phases of ventilation—controlled, supported, non-invasive, and during spontaneous breathing trials—can benefit from advanced lung protective strategies. Servo-n brings the Servo technology to the neonatal unit, enabling diaphragm electrical activity monitoring and a NAVA (Neurally Adjusted Ventilatory Assist) ventilation mode that matches assistance to newborns’ irregular breathing patterns based on neural respiratory output. Servo-air is completely independent of wall gas, making quality ventilation accessible in multiple care settings—from ICU to intermediate care, and for both invasive and non-invasive ventilation.

Echoing the company’s mantra of “passion for life,” Getinge’s technology set the stage for high school rower Blake Haxton’s eventual success in the 2016 Paralympics. Haxton finished fourth in Rio de Janeiro last year in the Paralympic single sculls, which differs from traditional leg-driven rowing, requiring athletes to have a different type of balance and focus more on upper-body strength.

In 2009, Haxton’s sore calf following a high school basketball game quickly escalated into necrotizing fasciitis, an ailment more commonly known as “flesh-eating disease.” Within a few days, he had endured amputation of his left leg up to the hip, and of his right leg to above the knee. The infections spread and his heart, lungs, kidneys, and liver began to shut down.

Haxton’s number appeared to be up to the point that doctors wouldn’t even put a percentage on his survival chances. During his multiple organ failure, Dr. Michael Firstenberg, assistant professor of surgery and integrative medicine at Northeast Ohio Medical University, coordinated Haxton’s care using Getinge’s Servo-i ventilator and Quadrox-D extracorporeal support technology. During his stay, Haxton endured over a month in a coma, 100 days in the hospital, and about 20 surgeries. After four years, he was able to pick up his rowing career again and begin his successful Paralympic career.

“I am amazed by what people have been willing to do for me,” Blake told Getinge in an interview detailed in the company’s annual report. “And believe it or not, I’m as healthy as a horse. I don’t have a single prescription in my name.”

$3.6 Billion
NUMBER OF EMPLOYEES: 15,000

Changing leadership is always transformational for a company, despite the common talk of “smooth” or “seamless” transitions. Leadership, like many other factors, shape and define culture; and every company has a culture, whether it consciously fosters one or not.

Swedish company Getinge Group went through such a shift in 2015, installing Alex Myers as the new president and CEO in March. The previous year was not a good one for the company. Struggling to come back from U.S. Food and Drug Administration (FDA) disciplinary actions against Getinge’s largest business unit, Maquet Holding B.V. & Co. KG, the company’s former CEO of almost two decades, Johan Malmquist, stepped down and handed over the reigns to Myers. Malmquist acted as an advisor to the board and Myers until the company’s 2016 annual meeting in late March.

Myers joined Getinge from Hilding Anders International AB, a Swedish bed and mattress company for which he was group CEO and president. But previously, Myers had served as executive vice president of extended care at Getinge between 2009 and 2013.

At the beginning of the year, a U.S. federal judge approved a Consent Decree between the Medical Systems business area and the U.S. Food and Drug Administration (FDA). A number of measures in the ongoing remediation program were undertaken during the year to improve the business area’s quality management system. The total financial consequences related to the Consent Decree, excluding the costs for the remediation program, amounted to approximately $38 million during the year, of which $26 million was charged to the group’s earnings before interest, taxes, and amortization (EBITA); $12 million pertains to restructuring costs.

In the wake of Maquet’s massive quality failures, Myers guided the company through a year laser-focused on quality. According to  Getinge’s annual report, intense efforts were made to strengthen processes and procedures for the company’s quality management system during the year. A major focus continued to be directed to the work on the comprehensive remediation program launched in 2013.

There were several positive signs during the year that the Medical Systems business unit’s quality work was on the right path. During the fall, full-scale production and sales of the biosurgical meshes product group was resumed at Atrium’s new production unit in Merrimack, N.H. (Atrium is a subsidiary of Maquet.) That facility, in fact, passed an FDA inspection. Third-party inspections were also carried out at all production units encompassed by the Consent Decree. At the end of the year, one such inspection in Hechingen, Germany resulted in a number of observations indicating that additional improvement measures would need to be implemented at the production unit. Intense focus is now being directed to ensuring that such measures are implemented and that the unit’s quality management system meets the Group’s global standards and the requirements set on the company as a player in the medical technology industry.

Myers was not the only major personnel change at Getinge last year, though. Pernille Fabricius assumed the role of chief financial officer, as Ulf Grunander retired from the position after 23 years.

“With his many years of experience and extensive knowledge, Ulf has played a key role in the change process that we have embarked on,” Myers said in the end-of-year-report. “Nevertheless, I am convinced that we have found the right person to replace him. Pernille Fabricius has an international background and experience from change processes similar to the one that we are now facing.”

At the time of her appointment, Myers also noted Fabricius’ strong track record in terms of growing businesses, restructuring initiatives, shared service set-ups, and mergers and acquisitions.

In September, Myers presented Getinge’s “transformation plan” to the public. It was a three-fold strategy:

1. 1. Creating growth through alignment of the product portfolio, as well as a sales organization that offers Getinge’s complete listing and is more clearly tailored to the needs and value chain of the healthcare sector. The focus is on structuring the organization to deliver increased clinical and financial value to the customer, thereby responding to the challenges and changes facing the healthcare industry.

1. 1. Improving profit by leveraging the Group’s economies of scale to a greater degree, and moving from three independent business areas to a joint organizational structure. Five focus areas have been identified to effectively drive the cost agenda. Examples of these areas are direct and indirect purchasing and shared services.

1. 1. Establishing a new functional organizational structure that will enable a timely and smooth implementation of the program.

The plan was not without dissenters. Harald Stock, Ph.D., president and CEO of Getinge’s ArjoHuntleigh and executive vice president of Extended Care, left the company after the reorganization was announced. He is now CEO of fertility company OvaScience Inc.

Getinge’s net sales for fiscal 2015 (year ended Dec. 31) were $3.6 billion, a 13.4 percent increase over 2014. The company still hadn’t recovered from the heavy fines and penalties levied by the FDA. Profit remained stable, almost unchanged from the previous year at $175 million. The company has not reverted back to 2013 levels ($450 million), but under Myers’ leadership, the company is hopeful.

Just before the close of the year, Getinge’s business area Infection Control acquired Stericool, a Turkish company specializing in low temperature sterilization, and also signed an exclusive global distribution agreement with Canadian company TSO3 Inc., a medtech sterilization technology company. The acquisition and distribution agreement are in line with Getinge’s strategy to strengthen customer offerings with new innovations and offer a broader product range.

“As a global leader in infection control, Getinge has an opportunity not only to enter into the fast-growing low temperature sterilization market, but also to leverage our legacy as a complete solutions provider,” said Joacim Lindoff, executive vice president of Infection Control.

The minimally invasive surgery market is a leading driver of growth for the low temperature sterilization market, according to Getinge. The instruments used in such surgeries are extremely sensitive to the high temperatures and pressure of a steam sterilization process. As the minimally invasive surgery market continues to grow at an expected compound annual growth rate of 10 percent, demands for alternatives to steam sterilizers will also increase, thereby providing great potential for accelerated business growth within infection control. The annual replacement and new worldwide business for low temperature sterilizers is estimated to total more than 2,300 units.

The Stericool deal is hoped to be the first of many for Getinge Group. “Acquisitions have been a key element in building Getinge Group,” the company’s annual report stated. “In the wake of continued consolidation among healthcare providers, size is increasingly important for suppliers that want to achieve long-term success.

Acquisitions will remain a key strategic element in the future, particularly in order to continue to grow in emerging markets and to further strengthen leadership in certain segments.”

Emerging markets now account for almost 30 percent of Getinge’s total sales. Since this trend is expected to remain favorable in the long term, Getinge intends to further strengthen its position in these countries. During the year, Getinge initiated a pilot project in select markets, with the three business areas merged to form one single sales organization per country. The aim of the new structure is to boost sales growth for the Group based on commercial collaboration, while economies of scale can be leveraged and create the conditions for a more efficient organization. The new structure was integrated into Getinge’s new functional organization on Jan. 1, 2016.

This focus on acquisitions and emerging markets is part of Getinge’s plan to “reignite growth.” The company hangs on despite a difficult couple of years. With Myers at the helm, new plans are in place and the company is fighting to retain its shareholders’ trust.

$3.4 Billion
NO. OF EMPLOYEES: 16,000

To say Getinge has had a hard year may be an understatement. At the end of 2013, the company’s future seemed uncertain, with former CEO Johan Malmquist setting his sights very high for fiscal 2014. His aim was to double sales, improve EBITA and grow profits 15 percent annually over the next several years in an attempt to transform the 110-year-old company into a global medtech powerhouse. Fast-forward just one year, and in January 2015, Malmquist was stepping down from his position and president and CEO. Malmquist hadn’t been a hastily appointed chief executive, either—he had helmed the company for 18 years (and was at the company for a total of 26) before things went south. “One way of taking responsibility,” Malmquist said, almost poignantly, in Getinge’s annual report, “is knowing when it is time to hand over to someone new.”

Malmquist’s replacement, Alex Myers, joined from Hilding Anders International AB, a Swedish bed and mattress company for which he was group CEO and president. But previously, Myers had served as executive vice president of extended care at Getinge between 2009 and 2013.

The Company’s Troubles

So what exactly did Malmquist “take responsibility” for? The company’s biggest stumbling block in 2014 was the culmination of several years’ worth of infractions by Getinge’s biggest business unit, Maquet Holding B.V. & Co. KG, which makes equipment for surgical workplaces, anesthesia systems, workstations for intensive care and cardiovascular devices. Between 2009 and 2013, the U.S. Food and Administration (FDA) conducted 10 inspections across the three Maquet subsidiary facilities: Atrium Medical Corporation in Hudson, N.H.; Maquet Cardiovascular LLC in Wayne, N.J.; and Maquet Cardiopulmonary AG in Rastatt and Hechingen, Germany. The U.S. Food and Drug Administration (FDA) uncovered major violations of the Quality System (QS) regulation, Medical Device  Reporting (MDR) regulation, and Correction and Removal (CR) regulation.

During that timeframe, the agency issued two warning letters to the three companies. Additionally, between 2009 and 2014, there were 45 recalls of Maquet-manufactured devices, five of which were classified as Class 1—representing the most significant risk to patients. The FDA and Maquet agreed to implement immediate controls, with the goal of bringing all facilities into compliance with the Federal Food, Drug & Cosmetic Act (FD&C) and its implementing regulations, including the QS, MDR, and CR regulations.

“Patients must be assured that medical devices are safe, effective, and high quality,” said Jan Welch, acting director of the Office of Compliance in the FDA’s Center for Devices and Radiological Health. “The FDA will remain vigilant in bringing companies that do not meet our regulatory requirements back to a sustainable state of compliance.”

A consent decree was reached in February 2015, after the close of fiscal 2014. The decree stated Maquet must stop manufacturing and distributing devices from Atrium’s Hudson facility until the company makes appropriate corrections to ensure compliance with the FD&C Act. This removes five devices from Maquet/Getinge’s revenue generating streams. Maquet will be allowed to resume normal manufacturing and distribution from the Hudson facility once the FDA agrees the company has completed all of the corrective actions required—but as of publication, that still has not occurred. The agency’s actions forced Getinge to spend heavily to improve manufacturing quality controls in the Maquet facilities in question during 2014. The spending sent its stock down nearly 20 percent to an 11-month low by March last year, and the company had to issue a profit warning—its third in the space of one year.

“It is important to state that there is no indication that any of the business area’s products are unsafe,” said Malmquist in the Gettinge’s annual report. “We are taking this very seriously and have made significant investments in the quality management system. The remediation program has made considerable progress and has already led to major improvements.”

Getinge’s efforts to right its wrongs will cost the company an approximate total of $175.8 million which is also expected to impact FY2015 earnings.

But quality infractions are not where Getinge’s troubles end. Fiscal 2014 began with Getinge having to deal with accusations of insider trading carried out by a Getinge employee in Sweden. The company confirmed that an employee who worked in the IT (information technology) organization at company headquarters was under investigation by the Swedish Economic Crime Authority for the crime. The employee’s position involved responsibility for developing and managing the IT systems used by Getinge’s head office. The company launched an internal investigation and suspended the employee.

Other Business

But life must go on, and amidst the major hurdles faced in 2014, Getinge got busy with business as usual. Of note was its acquisition of Pulsion Medical Systems AG, a German medtech company specializing in advanced hemodynamic monitoring. The deal, valued at approximately $152.5 million, was finalized in February 2014. Via its ventilation and anesthesia franchise, Getinge had a significant stake in critical care. Pulsion allowed the company a much larger sales footprint, especially in Europe. The rationale for the acquisition was that it would offer a way into developing a broader portfolio of advanced monitoring solutions with unique, recurring revenue streams. This acquisition was handled by Getinge’s Medical Systems Unit, which also acquired Danish company Cetrea AS during FY 2014. Cetrea makes IT systems for resource planning in real time at hospitals.

Getinge’s Infection Control unit was responsible for the acquisition of British company Altrax Group Limited, a supplier of traceability and quality assurance systems for handling sterile goods; and Australian company Austmel Pty. Ltd., which provides quality assurance in the handling of sterile goods primarily within the healthcare industry. Infection Control also began the year with a new leader, Joacim Lindoff, who replaced Anders Grahn as executive vice president of the business.

Overall, acquisitions in 2014 cost the company approximately $150 million and added 215 employees to the group.

At the end of FY2013, Getinge announced a plan to enhance and restructure its critical care programs. The proposed changes were completed in 2014, and the company expects them to lead to an annual savings of $7 million a year. The critical care business also implemented a restructuring program with the aim of enhancing the production of vascular implants. Costs related to the restructuring program were expensed as early as year-end 2011. When the restructuring program is completed, all production of textile-based vascular implants will be concentrated to the production unit in the La Ciotat, France. According to Getinge’s interim report released in March 2015, the move to La Ciotat is on schedule to finish before the third quarter of 2015.

The overall numbers picture isn’t that bad for Getinge Group. Net sales came in at $3.42 billion, an increase of 5.5 percent over 2013 (ratios based on Swedish krona). After expenses, which, as noted above, were heavy in 2014, Getinge’s net profit at $170 million was down 36.9 percent from the previous year. Net sales in Getinge’s three business units, Medical Systems, Extended Care and Infection Control were up in 2014 over the previous year. Medical Systems and Infection Control showed the most growth at 5.9 percent over the previous year; Extended Care grew 4.3 percent.

Outlook for 2015

In a difficult year, Getinge regrouped and made the effort to restate and reestablish its values and goals. A total of 31 workshops were held in 12 different countries, with participant representation from three additional countries. According to the company, five core values were defined as a result of those workshops: passion, excellence, ownership, openness and collaboration. The results from this year-long effort, company officials stated, will be implemented in the company culture throughout 2015.

$3.90 Billion
NO. OF EMPLOYEES: 15,000

Johan Malmquist has set some rather lofty goals for his company. The Getinge Group president/CEO wants to double sales, improve EBITA and grow profits 15 percent annually over the next several years in an attempt to transform the 110-year-old company into a global medtech powerhouse.

Achieving such a feat indubitably will be challenging as governments worldwide curb healthcare spending and payers seek outcomes-oriented solutions, but Getinge executives have developed a new long-term growth strategy that incorporates new decision-makers (hospital management and central procurement, among others) and customizes products to the rapidly developing mid-segment of emerging markets.

Bigwigs also hope to accomplish their mission by developing products with superior clinical results; streamlining the firm’s supply chain; and increasing collaboration between business units.

With such a comprehensive growth plan, Malmquist might want to reconsider the timeframe for delivering results, particularly in light of Getinge’s 2013 performance: Full-year net sales rose 4.8 percent to $3.9 billion (ratios are based on Swedish krona), but profits before taxes fell 7.8 percent to $486.3 million and net profits tumbled 9 percent to $354 million. The chief executive blamed the losses on volatile exchange rates as well as $61.7 million (400 krona) in charges for streamlining measures at Getinge’s Infection Control unit and the integration of Kinetic Concept Inc.’s Therapeutic Support Systems (TSS) business, acquired for $275 million in the final quarter of 2012. TSS manufactures therapeutic beds, mattress replacement systems and patient mobility devices.

“2013 was a challenging year for the Getinge Group,” Malmquist admitted to shareholders in the company’s 2013 annual report. “The improvements in demand and volume growth noted during the year were not reflected in earnings to the extent we expected at the start of the year.”

Those improvements were apparent only in the Extended Care unit, where proceeds surged 8.6 percent to $1 billion on the strength of the TSS acquisition. Data show the Kinetic Concepts castoff boosted revenues in Western Europe, the United Kingdom, Canada and Austria, with the latter country posting a staggering 177 percent sales hike.

Neither of the two other business units at Getinge matched their sister segment’s success in 2013 (year ended Dec. 31). Sales in the Medical Systems unit—which comprised more than half (52.6 percent) of Getinge’s total revenues last year—remained largely flat, climbing a mere $40 million over its 2012 gross. Operating profit and EBITA were down as well, both sliding 1.7 percent to $360 million and $446.4 million, respectively.

Executives attributed Medical Systems’ poor performance to unfavorable product and market mix, unstable foreign exchange rates, the 2.3 percent medical device tax in the United States, and significant investments in the company’s quality management systems. Getinge worked diligently last year to improve those systems at two U.S. production units that were targeted by the U.S. Food and Drug Administration (FDA) in 2010 and 2012. Both of the facilities belonged to businesses Getinge purchased to expand its portfolio of cardiovascular products.

Several new product introductions and the $189 million purchase of Pulsion Medical Systems AG helped Getinge limit the losses in its Medical Systems unit. The acquisition, announced in December, broadens the company’s medical monitoring system portfolio and “reinforced” the commercial roll-out of its Eirus solution for continuous glucose and lactate monitoring.

Pulsion’s revenues reached $47 million in 2012, of which 82 percent originated in Europe. The company provides specialty monitoring solutions for critically ill patients, including cardiac output measurement through its PiCCO brand. Getinge noted that cardiac output monitoring accounts for 83 percent of Pulsion’s sales, of which 77 percent relates to disposables.

Medical Systems sales drivers (or saviors) in 2013 included the multi-faceted Otesus 1160 operating table, Volista surgical lights, Eirus monitoring system and Servo-U ventilator platform. The Eirus system is described by Getinge as a continuous monitoring platform for both glucose and lactate that was designed specifically for use in critical care settings. It features second-by-second monitoring and a multipurpose central venous catheter that provides normal venous access and microdialysis monitoring, thereby reducing the need for additional CVC lines.

Getinge touted the Servo-U, designed for advanced intensive care settings, as a next-generation ventilator platform with a customizable interface and touch screen controls that help clinicians tailor treatments to individual patients. The system also accounts for “alarm fatigue,” a common but critical concern in hospital intensive care units.

“We have created an easier access to alarms that help staff to identify the causes for the alarm, and Servo-U can suggest solutions for the conditions triggering the alarm,” Jens Viebke, CEO of the Maquet-Getinge Group, said when the system was released.

Such product introductions were noticeably absent in the Infection Control unit, where sales slipped 1 percent to $785.9 million and operating profit plummeted 30 percent to $66.4 million, according to the annual report. Fluctuating currency rates and the U.S. device tax took its toll on profits, though strong sales in Western Europe and the United States/Canada minimized losses.

The unit’s most significant contribution to gross company sales was the launch of its four-year efficiency enhancement program. The effort is designed to streamline production by concentrating manufacturing in facilities with the greatest resources in competitive economies and outsourcing component production to external suppliers. The program also will entail a comprehensive review of functions including distribution, logistics and administration. In addition, the unit’s existing product range will be evaluated and unprofitable product lines phased out.

To further augment future growth, Getinge opened a new office in Shanghai, China, and a consumable manufacturing plant in Brazil, the seventh-largest market for its Medical Systems unit (the country contributed $85.4 million to 2013 net sales). Executives said the move will bring the company closer to its Brazilian customers, increase its emerging market flexibility, simplify regulatory submissions and improve its competitive advantage.

$3.72 Billion
No. of Employees: 14,919

The Getinge Group may not be a household brand such as Johnson & Johnson or as recognizable in medtech circles as Medtronic Inc., but the Sweden-based multinational certainly is recognizable by healthcare providers across the globe. Its Maquet brand (the company’s largest subsidiary and part of the company’s Medical Systems division), for example, holds significant market share in the hospital setting, with products ranging from intensive care equipment, highly advanced surgical instruments and operating room equipment, anesthesia devices and ventilators. The company’s ArjoHuntleigh brand (under the Extended Care division) focuses on patient mobility and wound management solutions, while products marketed under the Getinge brand (the firm’s Infection Control segment) are geared toward infection control and contamination prevention in healthcare.

Though the company’s product offerings are diverse, the fact that it sells directly to the hospital market makes it particularly sensitive to pricing pressures and the ups and downs (mostly downs recently) of the traditional healthcare markets. That said, in 2012, the company’s total sales grew by 11 percent (percentages are based on Swedish krona) to approximately $3.72 billion (organic growth was 2.8 percent). Profit before tax was roughly $527.8 million, down slightly by 0.2 percent. United States and Canada comprised 32 percent of the company’s sales, while Western Europe makes up 37 percent and emerging markets 31 percent. Medical systems are the bulk of the company’s sales at 52 percent, while the remainder is composed of extended care and infection control at 25 and 21 percent, respectively. The Extended Care division had sales of $920.2 million, which grew 4.2 percent. The Infection Control business had sales of approximately $794.2 million, growing 1.9 percent. The Medical Systems division—the largest slice of the Getinge pie—reported that sales increased by 19 percent to nearly $2.01 billion. Organic growth for the division amounted to a healthy 6.6 percent.

Part of the company’s growth was due, in part, to a few key acquisitions during the year.

In November, Getinge completed the purchase of Therapeutic Support Systems from San Antonio, Texas-based Kinetic Concepts Inc. The TSS business includes a portfolio of specialty therapeutic beds, mattress replacement systems and patient mobility devices. TSS also included products for use in the therapeutic wound care, bariatric care and critical care settings. In 2011, the company generated sales of $247 million and employed nearly 1,300 people worldwide. In 2011, the United States accounted for 60 percent of TSS’ revenues, while Europe accounted for about 30 percent. The purchase price was $275 million.

In June last year, Getinge purchased Acare Medical Science Ltd., a Chinese company that mainly manufacturers hospital beds. The acquisition was part of Getinge’s continued strategy—like that of so many other medical technology companies—to increase its presence in emerging markets and to offer a product range focused in price-sensitive customer segments. Acare Medical was founded in 1999 and is headquartered in ZhuHai, China. Its 2012 sales were approximately $20 million. Acare Medical sells through a proprietary sales organization in southern China and through distributors in other regions of China. Customers outside China account for about 30 percent of sales. The sale price for Acare Medical, which was incorporated into Getinge’s Extended Care business, was approximately $27 million. At the time of its purchase, Acare Medical had about 250 employees.

New sales also were generated by key product launches throughout the year. One of the largest for the company’s Medical Systems division was the Cardiohelp PALP (pump-assisted lung protection) for use in the operating room or intensive care units. PALP is designed for patients with severe pulmonary conditions, such as chronic obstructive pulmonary disease. Company officials claim the technology has the potential to generate $150 million in sales over a five- to 10-year period. By combining the dialysis of blood with advanced ventilation options, a “gentle treatment method,” according to company officials, was created. The device allows clinicians to maintain protective ventilation, even in severe cases of acute respiratory distress syndrome, by eliminating carbon dioxide to achieve optimal level of blood gases. Medical Systems also launched updated versions of the Servo-I ventilator and the FLOW-i anesthesia system. The Cardiovascular division launched a host of new products, including the new MEGA 30cc and MEGA 40cc cardiac-support products.

Also during fiscal 2012—in April—the company named a new chief for its largest division. Heinz Jacqui was named executive vice president of the Medical Systems business. Heribert Ballhaus, who headed the division since 2001, retired. Jacqui has worked in the medtech sector since the late 1980s, and as president of Olympus Medicals’ surgical endoscope business for the past eight years. He also has extensive experience in the intensive care field, having served has head of respiratory operations for Dräger Medical.