Tyco Healthcare

Health Care - Ensuring Security and Protection

Protecting human beings, properties and profit, Tyco operates more than 200 clinics around the globe. Our technology-focused approach and our experts in health care and IT integrations enable Tyco to tackle regulation, operation, risk mitigation, health and recovery issues to reduce cost, rationalize operation and enhance the health care industry.

From health camps and high-rise and individual clinics to care and residential institutions, Tyco provides protection for all kinds of healthcare institutions. Tyco is an industrial market veteran, with more than 900 locations around the globe, working with its clients to develop total fire and safety equipment suitable for every healthcare institution.

Our passion is to ensure that our healthcare clients safeguard their healthcare professionals, improve patient return and meet their health and personal protection objectives.

6. Healthcare Tyco

• Outsourcing medical products

It will be the last year in which Tyco is a business as CEO Ed Breen is preparing to divide the business into three listed businesses - among them Tyco Healthcare. This move is just another stage in Tyco's re-configuration after Breen took over management of the business in 2002 after former CEO Dennis Kozlowski walked under a blanket of well-publicised controversies.

Mr Kozlowski and former CFO Mark H. Swartz are currently in jail after being sentenced for theft of Tyco. Tyco's division into three entities is scheduled for completion in the first three months of 2007; in addition to the Healthcare business entity, the other two business areas are Tyco Electronics and Tyco Fire & Security, as well as Engineered Products & Services.

The changes to the reorganisation will appoint the present Tyco Healthcare President Rich Meelia as Chief Executive Officer of the discrete group. The Tyco Healthcare product portfolio includes leading-edge medical devices and consumables, airway management solutions, contrasting agents and diagnostics for imaging, needle and syringe, vessel therapy, stitches and trauma management solutions. Tyco Healthcare grew sales by 4% in 2005 as a result of higher volume internationally, particularly in Europe.

Divisional revenues in its surgery business were driven by intensified contracts with the Group's procurement organisations (GPO) and acceptances of its laparoscopic gastric bypass and LigaSure vascular closure systems. Tyco's total consolidated revenues rose only 3% to $39.7 billion. This slight rise could be the outcome of what some analysts say the firm has saved on R&D in the past, although it has raised its R&D spending in the last two years.

R&D expenditure for the Healthcare business increased 11% to $232 million last year, the second highest R&D expenditure in the sector (the first being Tyco's Electronic segment). Tyco began to become more aggressively and made two acquisitions in the healthcare sector after remaining calm about acquisitions after the closure of Kozlowski, strengthening its surgery franchise in particular.

Mountain View, Vivant Medical, a California-based producer of microwaves exhaust technologies, purchased Mountain View in July 2005 for $66 million, with up to $35 million to be added in the near term when certain key achievements are achieved. By 2015, the global ablation industry is expected to reach $700 million to $1.5 billion.

Later in November, Tyco purchased a majority stake in Floreane Medical Implants in Trévoux, France. Producer of nets for surgery won $142 million. Tyco Healthcare was given a positive judgment in a court case appealed in March of this year when a U.S. county court jailed a $420 million trial of Irvine, Masimo, CA, by a juror.

In 2005, a panel of judges ordered Tyco to reimburse Masimo for compensation in connection with an anti-trust suit against Masimo's pulsoximetry. According to Masimo, Tyco affiliates have hindered hospital customers from purchasing Masimo equipment. In this case, while Tyco won a re-trial order, it was affected by two other long-term claims.

Nellcor, a Tyco Healthcare business unit, has reached an agreement with Masimo to disburse $330 million to Irvine, CA, a medical technology firm, in a cartel suit over its heart rate oximeters. Tyco also had to disburse $64.5 million to Rancho Santa Margarita, CA-based Applied Medical Resources, in another litigation over a laptop for laptop surgical use.

During the second three months of 2006 (late April), the entire healthcare sector experienced a shallow rise due to several voluntarily product launches in the airway and medical imaging sectors. Following an early 2005 Tyco Healthcare facility audit, the FDA in October reported that there were issues with the company's tracheostomy cannulae and a cardiac and circulatory monitor produced at the company's Pleasanton, CA facility.