March 2001

Industry Watch

ZNETIX Intends to Buy HMC

ZNETIX, Seattle, a preventive health and fit- ness technology company, announced its intent to acquire HMC, a Bainbridge, Wash-based health maintenance center, for stock and cash. According to Charles Dillman, PhD, president and CEO of ZNETIX, the acquisition will advance the development and market share of the company’s products.

Immunex Breaks Ground

Immunex Corporation, Seattle, broke ground for its new research and technology facility. The $750-million Helix Project—the first phase of the new center—totals 1.1 million gross square feet and is expected to be complete in the fall or winter of 2003. The keynote speaker at the groundbreaking ceremony was James Watson, PhD, Nobel Laureate for his role in the discovery of the double helix structure of DNA, and president of Cold Springs Harbor Laboratory in New York.

Bergen Signs Distribution Agreement

Bergen Brunswig Drug Company, Orange, Calif, a subsidiary of Bergen Brunswig Corporation, signed a 5-year Preferred Authorized Distribution Agreement with InSource Health™ Services, a group purchasing organization. Under the agreement, Bergen will provide pharmaceuticals to InSource’s acute and alternate care facilities. This agreement builds on Bergen’s previous relationship with InSource, which concentrated on the alternate care market. InSource’s membership includes more than 10,000 facilities in 50 states.

Encore Anticipates Fourth Quarter Losses

Encore Medical, Austin, Tex, anticipated a loss for both the fourth quarter 2000 and fiscal year 2000. The company cited product rationalization activities, acquisition efforts, and internal reorganization changes. Although some of the expenses from the fourth quarter of 2000 may extend into the first quarter of 2001, Encore expects to be on a profitable growth track by the second quarter of 2001.

PTPN Posts Growth in Processed Claims

Outpatient rehabilitation network PTPN, Calabasas, Calif, posted a 22% growth in the number of claims processed during the last year, from $97 million to $119 million. With more than 1,000 member offices, PTPN contracts with most of the major managed care organizations in the nation.

“We believe the significant increase in claims reflects the health care market’s perception of the value of the private practice therapist and the growing use of physical, occupational, and speech therapy to speed up rehabilitation and prevent recidivism,” says Michael Weinper, MPH, PT, president and CEO of PTPN.

Invacare Reaches $1 Billion in Revenue

Invacare, Elyria, Ohio, announced a 15% increase in sales to $1,013,162,000 for the fiscal year ended December 31, 2000. Net income rose 19% to $59,911,000.

For the quarter ended December 31, 2000, the company reported a 17% increase in net income to $18,832,000. Net sales were up 10% to $268,299,000.

SaluMedica Receives FDA Clearance

SaluMedica, Atlanta, received 510(k) clearance from the US Food and Drug Administration (FDA) to market its Salubria™ Nerve Cuff for peripheral nerve repair. The product is made from Salubria, a moldable, elastic biomaterial designed to replace soft tissue in the body. The cuff, a tube available in 2-, 5-, and 10-mm inner diameters, provides a protective environment to help severed or damaged peripheral nerves grow back together.

Allmerica Announces Fourth Quarter Results

Allmerica Financial Corporation, Worcester, Mass, posted a 12.9% drop in net income for the fourth quarter of 2000. The company cited a rise in pretax catastrophe losses, net realized investment losses, and corporate expenses. Net income fell to $59.6 million from $68.4 million in the fourth quarter of 1999. Allmerica had pretax catastrophe losses of $51.9 million before the effects of reinsurance and $21.2 million net of reinsurance, compared with $3.8 million net of reinsurance in the same period in 1999. Net expenses rose from $16.1 million last year to $20.4 million, reflecting higher technology-related expenses.

Fourth Quarter Losses Reported by PMA Capital

PMA Capital Corporation, Philadelphia, announced an after-tax operating income of $7 million, or $0.32 per diluted share, for the fourth quarter of 2000, compared with $9 million, or $0.38 per diluted share, for the same period last year. The results for the fourth quarter of 2000 benefited by approximately $1.4 million, or $0.06 per diluted share, from a lower effective tax rate. For fiscal year 2000, PMA Capital reported an after-tax operating loss of $6.5 million, compared with after-tax operating income of $33.4 million for 1999. The 2000 loss included a third-quarter after-tax charge of $40 million for higher than expected losses and loss adjustment expenses in certain lines of the company’s reimbursement business.

Zenith reports FY 2000 Losses

Zenith National Insurance, Woodland Hills, Calif, reported an operating loss after tax of $37.7 million for the year ended December 31, 2000, compared to an operating loss after tax of $55.2 million for the previous year. The operating results include catastrophe losses of $14.7 million for fiscal year 2000, and $1.4 million for the quarter ended December 31, 2000.

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