Invacare readies pipeline

‘This is really the turn year,’ says CEO Matt Monaghan
Friday, May 12, 2017

ELYRIA, Ohio – Now that Invacare has made significant progress toward lifting a consent decree with the U.S. Food and Drug Administration, it's paving the way to launch a robust pipeline of new products later this year, company officials told analysts during an earnings call May 9.

In the first half of 2017, Invacare expects continued lower net sales—offset by favorable sales mix and increased gross margin as a percent of net sales—but by the end of the year, it expects a “sustainable turn” in both sales and operating income as a result of its transformation investments and activities.

“This is really the turn year,” said Matthew Monaghan, chairman, president and CEO.

Invacare reported $231.7 million in net sales for the first quarter of 2017, a 10% decrease compared to the same quarter last year. For its North America/HME business segment—the segment hardest hit by the decree—Invacare reported $119.5 million in net sales for the first quarter, a 2.1% decrease.

Already this year, Invacare has launched, among other products, the Swiss Kuschall manual wheelchairs in the United States, bringing a new line of lightweight high-performance wheelchairs to the market. Next up: a new generation of TDX power wheelchairs.

“The TDX SP2, which has been available in Europe, will launch in North America with our new LiNX wirelessly programmable power wheelchair control system,” Monaghan said. “This product will be a great asset for our power wheelchair portfolio.”

It’s technology like LiNX that will help Invacare woo back providers who have, in many cases, looked elsewhere due to Invacare’s limited abilities to make and sell certain products from its corporate headquarters and Taylor Street facilities under the decree.

“This new LiNX system is really unbelievable,” Monaghan said. “It’s kind of like going from a flip phone to a smartphone, in terms of incremental features and benefits. So our strategy is to make sure that our providers know what the features are and they get familiar with (them) as the products come out. (And) we’ve got to be market competitive on price.”

The last step in lifting the consent decree is a re-inspection by the FDA, a process that Monaghan says will begin this month. When asked by an analyst how long a previous re-inspection took, after the FDA approved a second certification report, Monaghan said five months.

“In 2015, the FDA was in the facility evaluating records for approximately five months,” he said. “I don’t know if that’s exactly a benchmark. (This re-inspection has) a bigger scope. But the FDA is familiar with the scope through a third-party report. So it could be longer; it could be shorter. It’s difficult to predict.”