Monday, August 4, 2008

Q2 Revenues Down at American HomePatient
BRENTWOOD, Tenn.--On Thursday, American HomePatient announced revenues for the second quarter ended June 30 decreased 12.4 percent compared to the same quarter in 2007.

Revenues for the quarter were $64.2 million compared to $73.3 million in 2007, a decrease of $9.1 million. Revenues for the six months were $133.4 million compared to $150.3 million for the same period in 2007, a decrease of $16.9 million, or 11.2 percent.

The decreases were primarily attributable to a change in inhalation drug product mix and the company’s reduced emphasis on less profitable product lines such as nonrespiratory DME and infusion therapy, according to a statement. In addition, initiatives designed to improve patient co-pay collections and provide appropriate service levels to patients were unprofitable, the company said.

Operating expenses for the quarter compared to 2007 declined by approximately $1.0 million, or 2.8 percent, while operating expenses for the six months compared to the same period last year declined by $1.7 million, or 2.4 percent. The decreases were the result of efficiencies that helped reduce operating costs, the company said.

Apria Postpones Investor Call
LAKE FOREST, Calif.--Last week Apria Healthcare Group delayed a conference call with investors, saying it needed to analyze a possible misstatement in its accounts. The company said it now expects to hold its quarterly call to discuss second quarter results during or before the week of Aug. 11.


In preliminary results, the company said second quarter revenue grew over the prior year by 35.5 percent to $531.2 million from $391.9 million in 2007. Q2 net income was $22.6 million, an increase of 17.4 percent, compared to $19.3 million in the second quarter last year.

Cross-Country Move for CHAD
NAPLES, Fla.--Inovo announced last week it has completed the relocation of CHAD Therapeutics' production and sales and marketing functions from California to Naples, Fla. Inovo acquired CHAD in February of this year.

“The combination of CHAD's leadership position and Inovo's manufacturing expertise will allow CHAD to continue in the tradition of innovation and excellence,” said Inovo CEO George Harris. “With 100 percent of our time and energy devoted to oxygen conservation, we are able to focus on this segment of the industry, identify needed improvements, and deliver technological advancements quickly and efficiently.”

Faced with rising delivery costs and cuts in oxygen reimbursement, home medical equipment providers are dependent upon the ability to respond quickly and effectively to changing market conditions. “We obviously have a vested interest in their success,” said Harris, “so it is imperative that our business objectives are aligned with their needs.”

CHAD offers a broad line of electronic, pneumatic and disposable oxygen conservers. Inovo has manufactured both regulators and conservers for the private-label market for over 10 years.


LifeScan, ResMed Partner on Diabetes, SDB Education
MILPITAS, Calif.--LifeScan, which makes blood glucose meters for diabetes, and ResMed, manufacturer of medical devices for the diagnosis and treatment of sleep apnea, have announced an exclusive co-marketing agreement to focus on educational and cross-promotional efforts to benefit the patients and health care professionals served by both companies. The goal is to build awareness among health care professionals of the overlap of these two conditions, trigger new approaches to patient care and ultimately improve the rate of treating patients suffering from both SDB and diabetes, the companies said.

The agreement between the two companies comes on the heels of a recent announcement by the International Diabetes Federation about the correlation of type 2 diabetes and SDB.

“Through this agreement, it's our hope to make significant inroads into educating more physicians about the coexistence, identification and care of these two diseases, and getting more patients diagnosed, treated and on the road to a healthier future,” said Tom West, president North America, LifeScan.

Lincare Sees Revenue Jump
CLEARWATER, Fla.--Lincare announced its Q2 revenues were $428.4 mllion, an 8 percent increase over revenues of $397.1 mllion for the same quarter of 2007. Net income for the quarter ended June 30 was $62.6 million compared to $56.0 million for the same period last year.

Revenues for the six months were $843.8 million, a 9 percent increase over $775.5 million for the comparable period last year. Net income for the period was $!23.3 million this year compared to $109.9 million for the first half of 2007.


The company said revenues and earnings were impacted by a change in order patterns for certain inhalation drugs. In April, CMS' DME MACs issued a revision of the nebulizer local coverage determination that would have effectively eliminated Medicare reimbursement for the drugs as of July 1.

As a result of the potential loss of access, the company said a significant number of its customers placed orders in June to receive a 90-day shipment of the drugs rather than a 30-day shipment. According to a company statement, the net effect of the ordering change was to accelerate approximately $18.9 million of revenues in the second quarter that would otherwise be expected in the third quarter.

CMS subsequently delayed implementation of the LCD, but Lincare said it now expects third quarter revenues will be reduced by amounts similar to those that increased in the second quarter.

The company added 10 new operating centers during the second quarter, bringing the total number of locations to 1,039. Lincare also completed the acquisition of a small infusion therapy provider in Mississippi during the quarter.

Otto Bock Drops OrthoRehab Name
MINNEAPOLIS--Otto Bock HealthCare has discontinued the use of the OrthoRehab name for its post-surgical orthopedic services. The change reflects the integration of the two companies' orthopedic rehab product lines and support services after Otto Bock's 2005 acquisition of Arizona-based OrthoRehab, the company said.


In other company news, Chuck Grosso will assume the newly created position of national sales director for Otto Bock's Orthopedic Services business area, including responsibility for the national roster of certified patient service representatives who provide in-home delivery and care.

Now marking its 50th year of operation in the U.S., the 80-year-old Germany-based Otto Bock produces over 25,000 types of prosthetic, orthotic, mobility and rehabilitation products.

Pride, MED Sign New Contract
LUBBOCK, Texas--The MED Group and Exeter, Pa.-based Pride Mobility Products Corp. announced last week they will continue their long-term relationship with an extended contract. Effective July 1, 2008, the contract enables MED Group members to continue receiving access to Pride's mobility products, educational and marketing support services in the most cost-effective manner, the companies said.

According to John Burks, MED Group's senior vice president of supplier relations, Pride's “combination of being the high-quality and cost efficient manufacturer, coupled with the exceptional work that they do to support our industry was key motivation to renew our agreement well before expired.”