BIOSEARCH MEDICAL PRODUCTS...The Medical Innovator
OUR HISTORY
Biosearch Medical
Products Inc. (the "Company") was incorporated in the State of
Later, in 1983, other developments led the Company into the Enteral Food Business with its introduction of Entri-Pak®, the first ready-to-use disposable feeding bag, which was pre-filled with Entrition®, a specially developed nutritional formula available in many caloric and fiber content formulations. Entri-Pak was manufactured by the Company's former subsidiary, Pouch Laboratories, Inc.
The dominance of the
enteral food market by larger medical product companies and reimbursement
changes in the Federal Government Medicare System prompted the Company's
decision to reassess its business objectives. The Enteral Food Business was
then sold in June, 1991 to Clintec Nutrition Company ("Clintec") of
Throughout the Company's history innovative products have been developed and marketed directly to hospitals, alternative healthcare centers and through distributors, both domestic and international. Although, in the opinion of the Company, its products remained superior, offering many advantages over competitor products, the Company could not foster the strength nor demand the recognition which the Company felt its products deserved. To this end, the Company found themselves competing against organizations which had immense sales and distribution networks and greater financial strength as well. Other factors involving the FDA regulatory climate for medical devices continues to lengthen the time necessary to have medical device approvals granted. The products are classified by the U.S. Food and Drug Administration ("FDA") as Class II regulated devices. FDA Class II regulated devices are required to meet established performance standards and a pre-market notification via submission of a 510(k) pre-market notification. See "Government Regulation".
In the opinion of the Company there are tremendous opportunities for the application of the Hydromer Hydrophilic coatings in the medical device industry. The Hydrophilic coating facilitates the insertion of enteral feeding tubes into the patient and reduces their discomfort during the medical procedure. The Hydrophilic coating also facilitates the removal of the placement stylet which has been inserted through the tube to position it properly in the patient's body. The Company has applied the Hydromer coating to its line of biliary stents and coagulation probes. When applied to the interior wall of the stent, Hydromer coatings have been shown to significantly increase the life of the implanted device. The need to regularly replace the device has been reduced and thus, may lessen the patient's frequency of enduring the trauma of replacement procedures. When applied to the tip of a coagulation probe the moistened Hydromer allows the instrument's clean removal after an ulcerated area has been coagulated with the device. Therefore the ulceration is not re-injured after the surgical procedure.
The Company received
ISO 9000 certification on October 9, 1996, which is needed to sell products in
In February 2000, Hydromer, Inc., an affiliated company aquired all
the common stock of Biosearch ie took Biosearch private. Biosearch now operates
as a wholey owned subsidiary of Hydromer. Hydromers web
site should be consulted for more information on coating services and
coating products.
PRODUCTS & CONTRACT SERVICES
Historically, the Company designed, manufactured and marketed Enteral Feeding Devices and Specialty G.I. Products. However, during 1994, the company entered into agreements with Sherwood Medical which formed with them a strategic business alliance. The alliance drastically changed the structure of the Company's business. The majority of the Company's then manufacturing was largely focused on its intermittent urinary catheters which were marketed by Sims Ltd and are now made for Bard. The Company continues to explore other business opportunities, develop new medical products and market their remaining products, e.g., Hydrophilic Coating Service, Biofeedback for anorectal dysfunction applications, indwelling biliary stents and hemostatic coagulation probes through direct customer and contract manufacture.
The Company considers that its products and services compete in the business segment of the "Medical Device" industry involving research, development, manufacturing and sales.
Contract Research & Development
The Company derives a small portion of its revenue from contract research. From time-to-time, the Company may be contracted by larger medical product companies to develop or assist in the development of prototype medical devices. The Company continues to explore opportunities in this area of business as it aligns itself with larger medical product companies for contract manufacturing and original equipment manufactured ("OEM") products.
Marketing and Customers
Through 1989, the Company marketed many of its products including a line of dietary products to the alternate care market. However, the dominance in this market by larger medical product companies for enteral food products and reimbursement changes in the Federal Government Medicare System prompted the Company's decision to reassess its business objectives. The Company subsequently curtailed its selling activities in the alternate care market and in August 1989, laid off its dietary sales force. In late 1991, management attempted to expand its sales distribution network by using independent manufacturer representatives ("IMR") and focus on the G.I. Lab market with devices carrying a higher return on investment than nutritional products. However, by mid-1992, after experiencing disappointing marketing results using this distribution channel, the Company began to restructure its marketing of these products by using other sales distribution outlets including the expansion of its private label and OEM network.
The Company had distribution arrangements, renewable on an annual basis, in many of the countries in which its products were sold. In connection with the Sherwood agreement many of the remaining international distribution arrangements have been terminated. The remaining distributors operate on an order by order basis pursuant to the Company's terms and conditions of sale and/or past practices. Sales are made directly by the Company to its distributors who, in turn, determine prices to customers and service customer accounts.
By mid-1993, the
Company announced it had entered into an exclusive technology and patent
license agreement with Nutricia, B.V. In connection with the agreement the
Company has sublicensed one of two Hydromer technology and patent licenses. The
agreement provides Nutricia with the right to manufacture and sell, under their name, the Company's former line
of enteral and surgical products in Europe, Africa,
The agreement with Nutricia, B.V. provides for the development of products by both companies per a five year non-cancellable cooperative arrangement. This European partner had been expected to retain the Company's innovative research and development abilities for additional fees but this had not materialized. The rights to any new products subsequently developed will be individually negotiated. Any other similar new product developed independently by either party will be subject to the right of first refusal by the other. The Company sent a notice of termination by registered mail on February 3, 1997.
In early 1994, the
Company appointed a large
Through mid-1994, the majority of the Company's medical devices were sold directly to customers and distributors, who in turn sell them directly to hospitals and other medical institutions and facilities and to smaller distributors concentrating on the home health care market. The Company also manufactured and sold its products to larger medical product companies on a private label and OEM basis as discussed above.
In May 1994, the Company successfully negotiated several agreements with Sherwood Medical Company which provided the Company with much needed cash to operate the business. In addition, the Company licensed and sub-licensed certain patented technology. The two year supply agreement, agreed to by the Company, expired in 1996. A two and one half year supply agreement was also signed on the Company's "J-Tube" products subject to existing agreements with other companies which expired in 1996.
Sales of the
Company's products to specific customers may, at times, be significant to the
overall revenues of the Company. The company has refocused its efforts on the
manufacture and selling of the Endoscopic Product line through its developing
dealer network and with its ISO 9001 certification, the development of the line
in
Competition
The market for private label, OEM and contract manufacturing of medical devices is highly competitive and subject to rapid technological change. Management considers the most significant competitive factors in its market to be product innovation, quality of customer service and satisfaction, reliability of product performance plus, competitive pricing, terms of purchase, and dependability of product on-time delivery.
The Company believes
that its products have significant characteristics which differentiate them
from available competing products in the medical device market. As indicated
previously, these characteristics are in part attributable to the application
of proprietary Hydrophilic coatings to certain of the Company's products. One
distinguishing feature of the Company's line of "Biliary Stents",
compared to many competitors' devices, is the application of a hydrophilic
coating to the interior wall of the stent. This hydrophilic coating has been
shown to significantly increase the life of the implanted device. The need to
regularly replace the device has been reduced and thus, may lessen the
patient's frequency of enduring the trauma of replacement procedures. Additionally,
when applied to the tip of the Company's line of "Coagulation Probes"
the moistened Hydrophilic coating allows the instrument's clean removal after
an ulcerated area has been coagulated with the device. Therefore the ulceration
is not re-injured after the surgical procedure.
Production and Quality Control
In its manufacturing and other processes, the Company follows procedures designed to maintain a high level of quality in its medical devices. Such procedures include adherence to precise specifications which are continually reviewed and upgraded by the Company for both product integrity and packaging materials. A staff of quality assurance employees with technological expertise is maintained by the Company at its manufacturing facilities.
The Company, beginning in 1995, initiated a program to ensure that its products conform to the European Community legislation for medical devices. Conformance is demonstrated by affixing the CE mark to the products made by the Company. The Company has met the requirements of the ISO (international organization for standardization) standard by certification to ISO 13485-2003. The standard requires the Company to design and manufacture products according to a rigorous quality system. In addition, the Company has employed British Standards Institution Inc. to serve as its notified body. Several of the products made by the Company are now approved to carry the CE mark.
Research and Development
The Company's research and development activities have been primarily devoted to the development and enhancement of the proprietary hydrophilic coatings and the products described above as well as to the design and development of new products. In connection with this innovative development ability the Company, from time-to-time, may be contracted by larger medical product companies to develop or assist in the development of prototype medical devices. A portion of the Company's overall business objective is to continue promoting this area of the business as it aligns itself with larger medical product companies. Further, the Company has and continues to utilize certain physicians and surgeons, who are recognized in their field of expertise, for product development and evaluations.
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