Navilyst Medical, Boston Scientific Spin-Off, Aiming to Tap Veins Without Causing Infections

Xconomy Boston — 

Much has been written about Boston Scientific’s retrenching, in light of the decline in its business with stents, the tiny wire mesh devices that prop open clogged arteries. Now as Boston Scientific focuses on its core businesses, one of the units that has been spun off has a new name, Navilyst Medical. The company has 800 employees, and what its founding president calls a new focus on the opportunity for devices that can minimize infections in hospitals.

Before it had a name or logo, Navilyst officially left its parents’ nest on Valentine’s Day, when the private equity firm Avista Capital Partners paid $425 million to buy the venous access and fluid management businesses from Boston Scientific (NYSE: BSX). The divisions were projected to have $180 million in annual worldwide revenue, but not much beyond that has been said about its finances or prospects.

Here’s what I gathered yesterday from an interview with Dave McClellan, the president of Navilyst, and the former president of Boston Scientific’s oncology division. The new company is being headquartered in Marlborough, MA. The R&D, manufacturing, process engineering and other functions are in Glens Falls, NY, where about 680 of the 800 employees will be. Navilyst’s name comes from the root words “navi,” which is short for devices that navigate their way into patients arteries for IV drips or injections, combined with “-lyst,” as in catalyst for innovation, McClellan says. He didn’t want to say much about any plans for hiring or expansion, other than they will depend on how well the company performs.

McClellan repeated the word “focus” a couple of times in our conversation. He made it clear that the new organization can channel its energy and resources to the opportunities it sees with vein-access devices, instead of competing for resources with many other projects inside the larger company.

The opportunity for Navilyst is in hospitals. Anyone who remembers the fearful TV and Internet reports last year of the rise of the drug-resistant bacterium known as MRSA, and another called C. Diff, knows that hospitals are motivated to cut down on the risk of such infections. About 1.7 million people get these infections in hospitals, and almost 100,000 people die from them each year, according to the Centers for Disease Control and Prevention.

Navilyst aims to help hospitals deal with this problem through vein-access technology, which uses a pressurized safety valve that’s designed to keep blood from flowing back up into an intravenous line, an exchange of fluid that can cause infections. The products are used in hospitals routinely every day, for injecting things like chemotherapy drugs, antibiotics, or nutrient drips. Navilyst calls it the PASV Valve Technology, and the company is planning to build on the concept with new products from its internal R&D, as well as with strategic partnerships, McClellan says.

Navilyst’s main competitors are Murray Hill, NJ-based C.R. Bard (NYSE: BCR) and Queensbury, NY-based Angiodynamics (NASDAQ: ANGO). McClellan insists that his new company can go toe-to-toe with them, even without the backing of Boston Scientific. “We have the scale, we’ve got the R&D horsepower, the focus and the sales channel,” he says.

One line in yesterday’s press release from CEO Ron Sparks mentioned that the company will look very different in 2011 than it does today. I asked McClellan what that meant, and he avoided specifics. “The strategy here is to continue to identify innovative technologies that bring value to our customers. We’re not just talking about me-too products,” he said.

I guess we’ll have to wait to see specifically what he means by innovative, but my guess is Navilyst will have to make a compelling case to hospitals that its technology will decrease the risk that the next scary headlines about MRSA will emerge from their wards.

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6 responses to “Navilyst Medical, Boston Scientific Spin-Off, Aiming to Tap Veins Without Causing Infections”

  1. M says:

    FYI— C. Diff is NOT short for MRSA. They are two different pathogens often found in nosocomial infections. Check your facts, Luke, if you want people to buy what you are selling….

  2. In fact what Luke wrote was that C Diff is “another” bacterium–ie, a different one–from MRSA. I’ve added an additional comma that I think will help make sure the fast readers among our visitors don’t misconstrue the sentence.

  3. A says:

    I hope they will be innovative, otherwise, they will continue to sell products that haven’t been for 10 years.

  4. B says:

    The manufacturing plant is in Glens Falls NOT Glen Falls, NY

  5. You’re right, it’s Glens Falls, not Glen Falls. Thanks for letting me know, it’s fixed now.