Bovie Medical Corp.

Source: Healthcare Digital

Date :11/08/2007 16:13:44

Bovie Medical, once the dominant brand of the electrosurgical industry, is working to rebuild its brand to its former glory

Written and produced by Lynn Haber & Thomas Venturo

Bovie Medical, once the dominant brand of the electrosurgical industry, is working to rebuild its brand to its former glory

Since 1998, the direction of Bovie Medical Corp. has revolved around the sale of battery operated cauteries and electrosurgical products; most notably, high frequency electrosurgical generators.

In fact, surgeons all over the world refer to their electrosurgical equipment and accessories as their “Bovie.”

For the past two years, however, Bovie Medical has been undergoing a bit of self-surgery to drive the company in a new direction.

Fueled by the vision of company COO Moshe Citronowicz and his team, Bovie Medical — a publicly traded, $27 million company based in St.

Petersburg, Fla. — is focusing less on its OEM (Original Equipment Manufacturer) business and is investing heavily in research and development in proprietary echnology, which will ultimately be marketed under the Bovie label.

The company’s new family of products, which it hopes to introduce in 2008, targets the area of minimally invasive surgery, a fast moving market estimated at approximately $1 billion that is currently dominated by just a few players.

To realize its vision, Bovie Medical is optimizing its proprietary technology in electrosurgery, and through acquisitions and partnerships is gaining access to additional technology, skills and intellectual property.

With two locations — St. Petersburg and another facility in Windsor, Canada — the company employs 150 people, approximately 12 percent of which are in engineering and development. By year end 2007, Bovie Canada expects to increase its current employee base of 12 to approximately 50.

The company team consists of marketing, development, sales, operations and quality, which are managed by the company’s board members and Bovie Medical’s president and CEO Andrew Makrides. Rob Saron is president of Bovie’s sister company Aaron Medical.

History of Strength

The Bovie product line has changed hands several times prior to 1998.

The Bovie name was owned by Maxxim Medical prior to being purchased in

1998 by An-Con Genetics Inc. NY (now Bovie Medical), which had acquired Aaron Medical Industries. Today, Bovie Medical is the parent of Aaron Medical.

After Aaron was purchased in 1995, money was invested in R&D to develop a line of electrosurgical products. Today, products are developed under the Aaron and Bovie names, but sold through separate distribution lines – general distribution lines carry Aaron products, which are sold to the physician market; whereas specialty distributors handle Bovie products, which are sold to hospitals.

Although Bovie is a household name used generically for all electrosurgery products among surgeons, a period of time elapsed before products were commercialized under the brand synonymous with electrosurgery. It was in the late 1920s, when Dr. William T. Bovie invented and first used the Bovie electrosurgical generator in an operating room.

Under the direction of Citronowicz and his team, the company aims to resurrect the Bovie name in electrosurgery as it makes its way into the market of minimally invasive surgery with new niche market products.

The change in course began approximately two years ago when the company decided to focus less on its OEM business — which accounts for approximately 30 percent of the company’s business — and more on new niche markets.

“We have unique proprietary technology and our own distribution channels. Going forward we’re optimizing our accessories and our generators to create a specialized effect not possible with standard generators and standard accessories,” says Rick Pfahl, VP of proprietary instrument technology.

To do that, the company, rich in electrosurgical proprietary technology, needed additional capabilities that it didn’t have in-house, especially in metal forming capabilities for its proprietary instrument technology.

In January 2006, the company acquired patent pending technology for new endoscopic modular instruments from Windsor, Canada-based Henvil Corp., a former vendor of Bovie Medical.

Henvil founder and President Steve Livneh reportedly had up to 15 patents that focused on medical instrumentation.

In November 2006, Bovie purchased the Windsor facility — now called Bovie Canada — and has since expanded the number of patents and products developed and manufactured there. The products are expected to be commercialized in mid-2008.

The target market for the new family of products that compliment related generator products is primarily hospitals and surgery centers, worldwide.

Today, Bovie Medical products compete in a market over one billion dollars. Bovie recognizes an opportunity to grow its market base substantially and increase sales significantly. Currently, approximately 17 percent of Bovie’s revenue is international.

The company will leverage the Bovie brand name, proprietary technologies, and the expertise it has acquired in its OEM business – namely quality manufacturing processes. Bovie has developed the infrastructure to propel itself forward.

“We have a lot of intellectual property in generators and instrumentation and have partnered well with industry leaders,” says Citronowicz.

In particular, he refers to intellectual property in the area of plasma accessory technology and the company’s partnership with Canady Technology. Founder Dr. Jerome Canady, holds more than a dozen plasma related patents and is recognized as a clinical expert in plasma technology.

Distribution and manufacturing agreements between the two companies were announced in June 2007.

Bovie Medical’s reach for product expertise is continuing and the company searches for expertise, worldwide.

“Dealing in global markets we understand that competition can come from anywhere. It’s an ongoing effort to improve our technology and processes,” says Citronowicz.

The company has strategic partnerships for technology, brain power and manufacturing in countries such as Bulgaria, Canada, China, Israel, Russia, and the U.K. For example, when they needed the best technology for printed circuit boards they reached out to Baya Technology in Tel Aviv, Israel, as they were able to provide unique solutions.

Bovie Medical executives say they realize that without the availability of sophisticated computer and communications technology, its worldwide efforts wouldn’t be possible. The company and its far flung partners rely heavily on the Internet and Voice over Internet Protocol (VoIP) for voice calls and videoconferencing, and email to overcome language and time zone challenges.

Looking forward

Over the next year — as the company brings new electrosurgery products to the minimally invasive surgery electrosurgery market — Bovie Medical will rely on its existing distribution strategy that relies on partners rather than a direct sales force.

“Our distribution strategy doesn’t restrict us from seeking out the best partners for our specialty products. In fact, it enables us to partner with the best distributors for the markets in which we participate,” explains Pfahl.

In place since 1998, Bovie Medical’s distribution strategy has been tested and proven for the company, which expects it to keep improving as the company moves forward.

Bovie Medical trains its distribution network and its distributors train end users. The network includes more than 100 distributor partners.

In all, Bovie is well positioned as it is on the verge of launching an ambitious growth strategy that could allow the company to enter into a new and emerging worldwide marketplace.