They're no one-trick pony: Respironics expands O2 biz

MURRYSVILLE, Pa. - With its acquisition of OxyTec's portable oxygen concentrator, Respironics has signaled plans to resuscitate an oxygen business that's long served as a stepchild to the company's booming sleep business. "Large investments are being made in both R&D and acquisitions," said John McClellan, Respironics' senior product manager for oxygen. "Within the next 12 months, we're anticipating the introduction of several major products." The vanguard of this new thrust by Respironics is the OxyTec 900, a 9-pound portable concentrator that pumps oxygen for eight hours at 2lpm with its two batteries. Respironics will rebrand the device as the EverGo and it will join the company's Freedom Series of oxygen-related products. The EverGo stands as a complement to Respironics' concentrator workhorse, the Millennium, an 8-year-old, 5-liter machine that has historically played second fiddle to Invacare and AirSep in terms of market share. With the EverGo, Respironics has declared ambitions for greater significance in the oxygen market. That declaration doesn't necessarily mean Respironics is angling for dominance, partly because the company's not quite sure any one player can achieve dominance in oxygen. "We don't believe that there is one single oxygen modality that will unequivocally meet the needs of every patient on oxygen," said McClellan. "Our job will be to simply provide the tools for the homecare provider to choose from. Today, with the reimbursement squeeze we are undergoing, providers need to have choices." Bob McCoy, managing director of Valley Inspired Products, seconded Respironics' comment. "They're taking the clinical high road," he said. In terms of oxygen production and conserving device dosing, the EverGo's rivals in this market--Inogen, SeQual and AirSep, for example--are quite different, which means that one size won't fit all. "It's a complicated model," said McCoy. His fear is that suppliers are less cognizant of these differences, and that there's too little research at large right now. "People are embracing them like sleep products," he said. "They are going after the sizzle as opposed to substance." Like the Sequal portable concentrator, however, there's still a question market when it comes to price. Mark Ludwig, Sunrise Medical's senior vice president of homecare products, set a $1,400 benchmark as the threshold for industry-wide acceptance of upscale home oxygen technology. Respironics won't say what the EverGo will cost -- not yet. They do say they won't be the lowest-priced technology or the most expensive technology. They'll be competitive. SeQual says they'll be more than competitive. There could be another reason Respironics isn't positioning the EverGo as the be-all and end-all in home oxygen. The company is reportedly exploring the viability of an in-home liquid transfilling solution as well. Respironics would not comment on developments there at present.