![]() ![]() The distributor to direct sales conversions generally enable us to obtain improved product pricing and more direct access to the end users of our products within the sales channel. See Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Segment Results - Comparison of 20 - Asia" for further information regarding this initiative. Also during 2017, we commenced a distributor to direct sales conversion in China as a result of our decision to eliminate a key distributor within that sales channel. In 2017, certain European countries were converted from distributor sales to direct sales in connection with our elimination of former Vascular Solutions' distributors. In some instances, particularly in Asia, the conversion involves the acquisition or termination of a master distributor and the continued sale of our products through third party sub-distributors or through new distributors. These transactions generally involve the elimination of a distributor from the sales channel, either by acquiring the distributor or terminating the distribution relationship. In connection with this acquisition, we created a new operating segment entitled Interventional Urology North America, which is included within the "all other" category in the presentation of segment information.ĭuring the past several years, we have completed a number of "distributor to direct" sales conversions in several countries. The contingent consideration liability represents the estimated fair value of up to $375 million we would be required to pay if specified net sales goals through the end of 2020 are achieved. ![]() The estimated fair value of the consideration transferred to acquire NeoTract was $975.2 million, which included initial payments of $725.6 million in cash less a favorable working capital adjustment of $1.4 million (for which we had not yet received payment as of December 31, 2017) and $251.0 million in estimated fair value of contingent consideration. ("NeoTract"), a medical device company that has developed and commercialized the UroLift System, a minimally invasive medical device for treating lower urinary tract symptoms due to benign prostatic hyperplasia, or BPH. ![]() On October 2, 2017, we acquired NeoTract, Inc. We believe that 510(k) clearance or 510(k)-exempt status reduces our research and development costs and risks, and typically results in a shorter timetable for new product introductions as compared to the premarket approval, or PMA, process that would be required for Class III devices. ![]() Our portfolio of existing products and products under development consists primarily of Class I and Class II devices, most of which require 510(k) clearance by the United States Food and Drug Administration ("FDA"), for sale in the United States, and some of which are exempt from the requirement to obtain 510(k) clearance. During 2017 we introduced several product line extensions and 10 new products. Our research and development initiatives focus on developing these products for both existing and new therapeutic applications, as well as enhancements to, and product line extensions of, existing products. Our research and development capabilities, commitment to engineering excellence and focus on low-cost manufacturing enable us to bring cost effective, innovative products to market that improve the safety, efficacy and quality of healthcare. ![]()
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