Invivo Corporation History

Company Perspectives:

Invivo Corporation designs, manufactures and markets proprietary medical devices for patient vital signs monitoring in a variety of applications inside and outside the hospital.

Key Dates:

1964:

Invivo's predecessor, Gentran, is founded.

1985:

Pillar Corp. acquires Gentran.

1986:

Gentran is reincorporated as Sensor Control Corp.

1987:

Sensor Control completes its initial public offering of stock.

1996:

The Millennia, a general patient monitoring device, is introduced.

1998:

Invivo's next-generation MRI monitor, the OMNI-TRAK 3150, is introduced.

2001:

Divestitures increase the importance of Invivo Research.

Company History:

Invivo Corporation touts itself as the leading producer of vital signs monitoring devices used during magnetic resonance imaging (MRI) procedures. Invivo designs, manufactures, and markets monitoring systems that measure the vital signs of patients, selling its product in the United States, Europe, and Asia. Invivo sells monitoring systems for patients outside the MRI environment as well. The company also designs, manufactures, and markets a line of safety and industrial instrumentation products that measure and detect toxic gases and low levels of oxygen. The company has established relationships with most of the world's largest MRI equipment manufacturers, including Siemens A.G. Medical Engineering Group, Philips Medical Systems, Hitachi Medical Corporation, and GE Medical Systems.

Origins

Invivo evolved in both name and business orientation during the 20th century, shedding both its original name and its original business by the time the company entered the 21st century. The company commenced business in 1964 as Gentran, a supplier of melt pressure instrumentation to manufacturers in the plastics, rubber, food, and medical industries. It would take years before Invivo's predecessor gained any recognition of note, its anonymity preserved by its diminutive financial stature and its failure to contribute meaningfully to its markets. After its formation, Gentran next appeared on the media radar in December 1985, when the company was acquired by Milwaukee, Wisconsin-based Pillar Corp., a company best known later for developing business planning software. Less than a year after its acquisition by Pillar, Gentran embarked on a new era in its development, an era whose arrival was signaled by the adoption of a new corporate title.

Gentran was spun off from Pillar in October 1986, when the company was reincorporated as Sensor Control Corp. Several months later, in February 1987, Sensor Control completed its initial public offering (IPO) of stock, but it did not emerge as a company completely free from Pillar's control. Pillar controlled 44.3 percent of Sensor Control after the IPO, with its chairman and president, Ernest Goggio, who served as Sensor Control's chairman, owning 46.9 percent of the company. Goggio, in his mid-60s at the time, selected James Hawkins as Sensor Control's president and chief executive officer. Hawkins, in his early 30s at the time, would preside over Sensor Control's development until its maturation into Invivo and continue to lead the company as it entered the 21st century.

At this juncture in the company's history, its financial totals remained low, particularly for a concern that was approaching its 25th anniversary. In 1986, Sensor Control generated a little more than $2.5 million in revenue, from which the company earned $268,000 in profit. Proceeds from the IPO enabled Sensor Control to complete several acquisitions, which helped to increase the company's financial stature marginally. In 1987, the company acquired Gamma Instruments Inc. and Tactile Robotic Systems Inc. The following year, Sensor Control failed in a bid to acquire Boonton Electronics Corp., but the company succeeded in purchasing Linear Laboratories Corp. By the end of 1988, Sensor Control also succeeded in reaching the $5 million-in-sales mark, posting $528,000 in profit for the year.

MRI Monitoring Device Unveiled in the Late 1980s

The arrival of Sensor Control's 25th anniversary roughly coincided with the debut of its first notable product. By 1989, the company manufactured measurement and sensing systems for industrial markets. Sensor Control's product line included melt pressure systems, noncontact infrared temperature measurement systems, noncontact metal thickness gauges, and tactile sensing systems with custom software packages. Sensor Control's product line also included one signal product, the commercial success of which eventually would steer the company in a new business direction. The late 1980s marked the debut of the OMNI-TRAK 3100.

The OMNI-TRAK 3100 represented Sensor Control's pioneering development of vital signs monitoring during magnetic resonance imaging (MRI). An MRI was a noninvasive diagnostic tool that used magnetic fields and radio frequencies to produce images of internal organs and structures of the body. With the OMNI-TRAK 3100, physicians were able to monitor vital signs while the patient was undergoing an MRI procedure, a remarkable achievement because of the complexities of a monitor device and MRI equipment working together. For both to work well in concert, a monitor could not degrade the image produced by the MRI, while, at the same time, the monitor signal had to be protected from the MRI's magnetic field and radio frequencies, thereby ensuring the information gleaned by the monitor remained accurate. Sensor Control overcame the challenges inherent in producing a successful vital signs monitor. The OMNI-TRAK 3100 provided continuous monitoring of all key aspects of a patient's vitality, including electrocardiograph (ECG), respiration, heart rate, blood oxygen levels, invasive and noninvasive blood pressure, and expired carbon dioxide levels.

Thanks to the debut of the OMNI-TRAK 3100, Sensor Control entered the 1990s operating in two business segments. Part of the company's attention was devoted to patient safety monitoring, while part of the company's attention was devoted to safety and industrial instrumentation, which included gas detection and monitoring devices. The Occupational Safety and Health Administration (OSHA) and other regulatory agencies required the use of such devices in confined settings where toxic gases or low levels of oxygen were suspected. As the company progressed through the decade, it would concentrate on both sectors, but by the decade's end Invivo's management, led by Hawkins, would demonstrate a decided bias toward building the company's patient monitoring business.

Expansion of Medical Business During the Latter Half of the 1990s

The shift in concentration toward the patient monitoring side of Invivo's business occurred during the mid-1990s. Not long after the company's 30th anniversary, Invivo's management decided to develop a full-featured monitor for general medical applications, a decision that moved the company beyond the MRI environment for the first time. In anticipation of the development of a new medical product, the company significantly increased its sales force and stepped up its marketing efforts between 1995 and 1997, attempting to ease its entry into a new market. The development program culminated in the introduction of the Millennia monitor in the latter half of 1996, marking the company's entry into the general patient monitoring market. The Millennia, a portable, 15-pound vital signs monitor, included a module for anesthetic agent identification and analysis, allowing an anesthesiologist to confirm the type and amount of anesthetic gas being administered to a patient.

By the time the Millennia made its debut on the market, the financial stature of Invivo had increased from its days as Sensor Control. The $5 million-in-sales company that exited the 1980s stood as a nearly $36 million-in-sales company by the end of the company's fiscal year in June 1997. For the remainder of the 1990s, sales increased steadily, although not robustly, as the company expanded, particularly its medical device subsidiary, Invivo Research--the essence of the modern Invivo Corporation.

On the heels of Invivo's entry into the general patient monitoring market, the company strengthened its presence in the MRI arena. In April 1998, the company unveiled its next-generation MRI monitor, the OMNI-TRAK 3150. A smaller, portable version of the OMNI-TRAK 3100, the company's new MRI monitor was capable of communicating with the Millennia remote display controller, using state-of-the-art radio transmission to send data to physicians and technicians in both the MRI room and the control room. Providing a boost to business, the OMNI-TRAK 3150, in conjunction with the company's other medical device products, led to record financial totals for fiscal 1999. In June 1999, the company reported a 20 percent increase in total sales, posting $48.8 million in revenue. The increase was attributable to the company's patient safety monitoring segment, where revenues at Invivo Research leaped 30 percent. For the year, the company's patient safety monitoring segment generated $30.1 million in revenues and $4 million in net income. Invivo's safety and industrial instrumentation segment generated $18.6 million in revenues and $3.2 million in net income.

Divestitures Beginning in 2001

As Invivo exited the 20th century and entered the 21st century, the attractions of the $2 billion worldwide market for patient monitoring products began to pull the company decidedly in one direction. Safety and industrial instrumentation devices, once the exclusive business of Invivo's predecessors, increasingly lost their importance within the Invivo organization during the first years of the 21st century. An exodus of Invivo's assets in the safety and industrial instrumentation segment began in 2001, as a series of divestitures left the company almost entirely dependent on medical markets. In March 2001, the company announced that it had sold its subsidiary G.C. Industries to Santa Clara, California-based Vici Metronics Inc. Invivo had purchased G.C. Industries in 1991, when the company was an $850,000-in-sales manufacturer of gas detection instruments, calibration equipment, and sensors. The divestiture represented a loss of 1 percent of Invivo's total annual sales. Hawkins, in a March 6, 2001 press release issued by the com- pany, explained the reasoning behind the disposition. "We acquired G.C. Industries 10 years ago," he wrote, "when we had a different focus than we have today, and we have now determined that G.C. Industries no longer fits well strategically with our medical and safety and industrial businesses."

As Invivo began to weed out parts of its safety and industrial instrumentation device business, it recorded positive advances with its medical business. The company increased its sales and marketing efforts in 2001, establishing a subsidiary in England to foster growth in the United Kingdom. In August, Invivo received approval from the Japanese Ministry of Health & Labor to market its MRI monitors in Japan, the second largest market behind the United States in terms of installed MRIs.

In 2001, Invivo's safety and industrial sales dropped 16 percent, triggering another round of divestitures. In May 2002, the company completed the sale of Sierra Precision, a manufacturer of pressure gauges and hoses, to 3D Instruments LLC, which stripped Invivo of 11 percent of its sales volume. Hawkins, in a May 20, 2002 press release, wrote, "With the divestiture of Sierra Precision, we expect the gross profit margin for Invivo Corporation will show a substantial increase as Sierra Precision's gross profit margin was substantially lower than our gross profit margin for Invivo Corporation." Next, in June 2002, the company sold Lumidor Safety Products, a manufacturer of portable and fixed gas detection instrumentation, to Zellweger Analytics, Inc. Lumidor accounted for 15 percent of Invivo's sales. After the disposition of Sierra Precision and Lumidor, Invivo Research was responsible for 96 percent of Invivo's annual revenues.

Against the backdrop of the divestitures, Invivo's medical monitoring business was recording encouraging growth. During the first and second fiscal quarters of 2002, Invivo Research posted sales gains of 13 percent and 17 percent, respectively. As the company plotted its future course, much of its success depended on the growth of its patient monitoring equipment. In this area, particularly the MRI niche, the company stood well positioned. The inherent challenges of producing an effective MRI monitor limited the number of competitors Invivo faced. According to the company's calculations, it was one of only three MRI monitor producers in existence. In this small pool of competitors, Invivo considered itself to be the market leader, a position the company hoped to maintain in the future.

Principal Subsidiaries: Linear Laboratories Corp.; Gentran; Invivo Research, Inc.

Principal Competitors: Mine Safety Appliances Company; Spacelabs Medical, Inc.; Welch Allyn Protocol, Inc.

Further Reading:

• "Gentran," Rubber World, October 1995, p. 16.
• "Sensor Control Corp.," Business Journal, November 12, 1990, p. 41.
• "Sensor Control Corporation," Business Journal, January 30, 1989, p. 27.

Source: International Directory of Company Histories, Vol. 52. St. James Press, 2003.

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