A Medical Device Daily

SurModics (Eden Prairie, Minnesota), a provider of drug delivery and surface modification technologies to the healthcare industry, reported making several restructuring moves, including reducing its workforce by about 5% and vacating a leased facility in Eden Prairie, Minnesota.

As a result of its cost-cutting initiatives, the company said it expects to take a one-time restructuring charge of about $1.5 million to $2.3 million in the first quarter of fiscal 2009. Also in connection with these initiatives, SurModics said it expects to save about $2 million on an annualized basis. The effect of the reduction in force and the other cost-cutting initiatives was already accounted for when the company made its most recent earnings call.

The company said it will now be organized into clinically and market-focused business units that will improve the visibility, marketing and adoption of its broad array of technologies within specific markets and help its customers in the medical device, pharmaceutical and life science industries solve unmet clinical needs.

With these changes, SurModics will have four business units: Cardiovascular, Ophthalmology, In Vitro Technologies, and Brookwood Pharmaceuticals.

Charles Olson, who previously ran the Hydrophilic Technologies business unit, will become VP/general manager of the new Cardiovascular business unit. This business unit will be responsible for marketing all of the company's drug delivery, hydrophilic and regenerative technologies to cardiovascular customers.

The Drug Delivery, Hydrophilic Technologies, Regenerative Technologies, and Orthopedics business units will be eliminated, and those employees will be reassigned within the company. In addition to his responsibilities as head of the Ophthalmology business unit, Paul Lopez will spearhead the company's efforts in new clinical market opportunities.

Also, a new centralized research and development function has been formed to serve the needs of the company's Minnesota and California operations. Heading the new R&D function will be Lise Duran, PhD, who will have responsibility for research, and Brian Robey, who will run product development and operations.

Brookwood Pharmaceuticals' R&D operations will remain unchanged.

"These organizational changes will enable us to more effectively serve our customers by allowing us to better understand and help solve the needs of patients within specific clinical indications," said President/CEO Bruce Barclay.

"In addition, by centralizing R&D, we expect to more effectively leverage existing and new technologies across multiple clinical applications, thereby improving the return on our R&D investments," he said. "Further, while the decision to reduce our workforce was a very difficult one, we felt it was prudent to bring operating expenses more in line with revenue. These measures will not adversely impact our ability to create and develop new technologies, or our ability to meet both our near- and long-term goals."

In other restructuring news, Minrad International (Orchard Park, New York) reported that it will reduce its workforce by about 35%, or 50 positions.

"We have taken this difficult but necessary action to reduce our cost structure to conserve our cash in response to our current adverse financial condition, as we discussed in our recently announced 3Q08 financial results on Nov. 14," said President/COO Dave DiGiacinto. "We appreciate the dedication and past efforts of those employees affected by today's announcement and thank them for their contributions."

This reduction in workforce will affect positions in company locations including Pennsylvania, New York and other geographies.

Minrad is an interventional pain management company with three focus areas: anesthesia and analgesia, real-time image guidance, and conscious sedation. The anesthesia and analgesia business currently manufactures and sells generic inhalation anesthetics that are used for human and veterinary surgical procedures.

The company manufactures real-time image guidance technologies that facilitate minimally invasive surgery. The SabreSource system and accompanying Light Sabre disposable products have broad applications in orthopedics, neurosurgery, interventional radiology and anesthesia.

The company also is in the process of developing a drug/drug delivery system for the use of halogenated ethers as inhalation analgesics for conscious sedation.