Just 11 ounces of wizardry fill a Columbia firm with hope Meridian Medical offers high-tech help for home health care

April 20, 1997|By Mark Guidera | Mark Guidera,SUN STAFF

James H. Miller, the chief executive officer of Meridian Medical Technologies Inc., gets a kick out of strapping on a hand-sized gadget that seems straight out of "Star Trek."

Called the CardioBeeper, the 11-ounce device looks a bit like a Walkman with a tail or strap.

The strap contains electrodes that can read vital heart signs and transmit them by phone to a doctor's office or hospital.

"This is where medicine is headed," says the affable executive.

Perhaps. But one thing is certain: It is high-tech, portable wizardry like the CardioBeeper that Miller is banking on to transform the Columbia-based company from a little-known military contractor into a diversified medical company.

"Essentially, we are trying to form a new company," says Miller.

The risks of pushing beyond its 30-year-old reliance on the U.S. military market might seem big for Meridian, which as Survival Technologies Inc. supplied self-injection devices loaded with chemical warfare antidotes to U.S. troops during the Gulf War.

For one, the company faces competition from heavy hitters such Johnson & Johnson, Abbott Laboratories and Boston Scientific Corp., which already have large market shares.

But the potential rewards are significant.

Namely, the company -- which changed its name and moved from Rockville late last year -- hopes to gain a foothold in a niche of the $93 billion world market for medical devices that is rapidly growing -- home health care.

"This is a market where early intervention can save lives and health care costs," says Miller.

While Wall Street does not follow Meridian -- its stock historically has been closely held by the late founder and his estate -- industry analysts say that in general companies offering reasonably priced new technology are experiencing sales growth. The key: The technology should offer cost benefits to health care providers and insurers.

Miller says Meridian's engineers are heavily focused on designing new technology with product cost in mind.

"We have to keep prices down to compete," he says.

The CardioBeeper is an example of that strategy. At a cost of about $300, it allows heart patients to be monitored at home, thus avoiding expensive hospital stays or doctor visits.

Meridian also hopes that sales to emerging countries, particularly in Asia, will fuel growth. In particular, Miller sees strong opportunities in the Philippines, Taiwan and China, where medical care is a high priority and where U.S. export channels are developed.

The company, which employs about 100 people in the United States, Ireland and England, has seen international sales grow to one-third of its total volume since 1992, when they represented just 5 percent of sales.

The Health Industry Manufacturers Association, a Washington trade group, projects that sales of medical devices will grow three to four times faster in Asia than in the United States and Europe over the next several years.

In fact, the most recent data available show that between 1994 and 1995, medical device sales grew 22 percent in Asia, compared with 7 percent in the United States, HIMA says.

Meridian and other U.S. companies, however, face tough competition in the Asian markets, HIMA warns, from Japanese ** companies.

Miller says Meridian's strategy is to dominate selected parts of the market.

"We are looking for niches we can get into and control," says the former pharmaceutical executive at Abbott Laboratories.

Meridian wants to leverage its considerable expertise in developing injection devices so that drugs can be easily and safely self-administered.

Meridian now markets a line of injection pens for the civilian market that are loaded with epinephrine to treat anaphylactic shock from allergic reactions caused by bee stings, food and other allergens.

A new model, which has a child protective cap and conceals the needle from the skittish, is expected to hit the market soon.

Earlier this month, Meridian struck a product development and marketing alliance with Mylan Laboratories.

The Pittsburgh-based company is considered by industry analysts to be one of the leading -manufacturers of generic pharmaceuticals in the United States.

Under the partnership, Meridian will license, develop and produce a line of injectable generic drugs.

Mylan, in turn, will market them to physicians, nursing homes and other health care providers. Currently, Mylan doesn't carry any injectable generic drug products in its portfolio.

The companies are silent on what the first line of products will be. But Miller says they should fit into the home health care market strategy.

Ian Sanderson, a health care analyst with Cowen & Co. in Boston, says the alliance provides Meridian with a partner that has a well-entrenched sales division that should be able to quickly build sales for self-injection products.

Mylan, meanwhile, gains access to advanced injection technology so it can broaden its product line, Sanderson notes.

"Meridian brings to Mylan a low-cost, low-risk product-development engine," says the analyst.

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