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Hill-Rom Holdings Inc.

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Shares of Hill-Rom Holdings Inc. spiked 10 percent on Oct. 25 after it announced earnings that edged past the expectations of Wall Street analysts. But the Batesville-based maker of hospital beds and furniture gave up much of those gains as the week ended. Hill-Rom earned $39.2 million in the three months ended Sept. 30, a 38-percent decline from the same quarter a year ago. Earnings per share totaled 63 cents in the most recent quarter, and only 56 cents when special items were excluded. But analysts were expecting even less, just 55 cents per share, according to a survey by Thomson Reuters. Also, Hill-Rom’s revenue soared above analysts' expectations, totaling $431.6 million. Analysts had predicted revenue of $418 million in the quarter. Shares of Hill-Rom’s stock opened the day Oct. 25 at $30.43, a 10-percent jump from their close the previous day. But by the end of Friday, Hill-Rom’s shares had settled back down to $28.39 apiece, essentially unchanged for the week.

The Indiana University School of Medicine gave details Oct. 25 on its expansion of its program in Lafayette from two years to four years and plans to grow enrollment. The program, which is housed on the campus of Purdue University, this year enrolled 39 third-year students who are doing rotations at hospitals in the Lafayette area. The Lafayette medical program will add fourth-year medical students next year. Previously, medical students who began in Lafayette would finish their medical training at the IU medical school’s main campus in Indianapolis. The IU medical school has been enrolling 16 students per year at the Lafayette campus. But in 2014, when the school moves into a new building on Purdue’s campus, it will boost enrollment to 24 students per year. The new building, known as Lyles-Porter Hall, will give the school the capacity to enroll as many as 32 students. The Lafayette campus was launched in 1968. A second-year curriculum was added in 1980.

Zimmer Holdings Inc. beat analysts’ estimates with its third-quarter profit, but trimmed its full-year forecast. The Warsaw-based maker of orthopedic implants said Oct. 25 that it earned $178.1 million in the three months ended Sept. 30, a 7-percent decline from the same quarter last year. Excluding special charges, however, Zimmer would have earned $202.1 million, a 2.5-percent increase from a year ago. Earnings per share on that basis totaled $1.15. Wall Street analysts were expecting $1.13 per share, according to a survey by Thomson Reuters. For the full year, Zimmer now expects earnings per share to fall between $4.75 and $4.80 on a reported basis and between $5.25 and $5.35, excluding special charges. Zimmer’s previous forecasts had added another nickel of earnings on the high end of those ranges. Zimmer expects foreign exchange rates to keep its sales flat the rest of the year.

Shareholders of Amerigroup Corp. on Oct. 23 overwhelmingly approved the Virginia company’s $4.9 billion sale to Indianapolis-based health insurer WellPoint Inc. The vote clears the way for the acquisition to close before the end of the year. More than 99.9 percent of shares voted Tuesday were in favor of the sale to WellPoint, although those shares represented just 80 percent of all Amerigroup shares outstanding. Some Amerigroup shareholders had questioned the deal when Amerigroup revealed that a second suitor had been in the mix. WellPoint agreed to buy Amerigroup on July 9 to beef up its business of managing Medicaid plans for state governments.

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Cautious hospitals trouble Hill-Rom

The investor drubbing sustained by Hill-Rom Holdings Inc. last week stemmed not so much from the new acquisition it announced as from the gloomy outlook in the North American hospital market.

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Company news

The Warsaw-based makers of orthopedic implants could be hurt by a new plan floated by the Centers for Medicare & Medicaid Services to target "unnecessary" medical device claims, according to the trade publication MassDevice. Medicare officials will ask doctors to provide up-front justification for certain medical equipment, especially for orthopedic and cardiac devices. The program, set to launch in 11 states next month, will flip the reimbursement system from the agency's existing "pay-and-chase" method of looking for improper payments after they've already been made. It’s more bad news for orthopedics companies—including Warsaw’s Zimmer Holdings Inc., Biomet Inc. and DePuy Orthopaedics Inc. They have already been hurt by the recession and high unemployment, as jobless patients have put off elective surgeries. The companies are also bracing for a new industry tax instituted by the 2010 health care overhaul.

Batesville-based Hill-Rom Holdings Inc. has agreed to acquire Germany-based Volker Group for $85 million in cash, pending regulatory approvals. Volker makes bed frames and other furniture for long-term care and hospital facilities. The company, which sells mainly in Europe and other foreign markets, had 2010 revenue of roughly $100 million. Hill-Rom also makes hospital beds and other equipment, as well as provides information technology components to enhance the performance of its products. Hill-Rom said Volker’s business would strengthen its product offerings in Europe, and would boost its 2012 earnings by 2 cents or 3 cents per share. The transaction is expected to close within the first quarter of 2012.

Shares of Endocyte Inc. plummeted nearly 70 percent after clinical trial results announced Dec. 13 showed the company’s experimental ovarian cancer drug led to shorter overall survival times than treatment with a standard cancer drug. Some analysts called the sell-off an overreaction, but shares of the West Lafayette-based company remained depressed nearly a week after the news. Endocyte officials stressed that the study of the drug EC145 did not include enough patients to be statistically meaningful in terms of overall survival. Also, they noted that survival rates for patients taking standard therapy were several months longer than seen in any other study. Previous clinical trial results released by Endocyte have shown that EC145 significantly increases the length of progression-free survival for ovarian cancer patients who have cancers that are resistant to treatment with common platinum-based drugs. Investors, however, assumed the worst. In the Phase 2 trial results reported Dec. 13, patients taking EC145 with the cancer drug Doxil survived a median length of 14.1 months, which was longer than in any previous study of the drug. But patients taking Doxil alone experienced median survival rates of 16.9 months.

Indianapolis-based WellPoint Inc. is feuding with St. Louis-based pharmacy benefits manager Express Scripts Inc., according to the Associated Press. Express Scripts said WellPoint, the second-largest health insurer in the nation, has raised the possibility of filing a lawsuit over contract terms and Express Scripts’ performance under that contract. But Express Scripts officials also said the companies are negotiating, and they believe they can resolve the dispute. WellPoint is disputing the implementation of some terms of the contract and "certain operational matters associated with Express Scripts' performance" under those terms. The contract between the companies went into effect on Dec. 1, 2009, after WellPoint sold its pharmacy benefit management business to Express Scripts.

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Medical supplier Hill-Rom makes $42M fraud settlement

Hill-Rom Holdings Inc., a medical-equipment company based in Indiana, agreed Tuesday to pay nearly $42 million to settle a government lawsuit. The government had accused the company of knowingly submitting false claims to Medicare from 1999 to 2007.

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People

TriMedX, a technology-management firm for hospitals, has hired Tom Vorpahl as chief operating officer. For the past eight years, Vorpahl worked at Philips North America, most recently as vice president of sales and business development. Vorpahl holds bachelor's degrees in biology and medical science from the University of Wisconsin. TriMedX is an Indianapolis-based subsidiary of the Ascension Health hospital system.

Batesville-bsed Hill-Rom Holdings Inc. has appointed Mark Guinan chief financial officer, beginning Dec. 13. Guinan is currently chief procurement officer for New Jersey-based Johnson & Johnson. Guinan has an undergraduate degree from the University of Notre Dame and an MBA from the Olin Graduate School of Management at Washington University. Before joining Johnson & Johnson, he worked for Cincinnati-based Procter & Gamble. Guinan succeeds Greg Miller, who has been Hill-Rom's CFO since 2005.

Carmel-based CNO Financial Group Inc. has hired James S. Sawaya as vice president of claims. Sawaya comes from Wisconsin-based HealthEOS by Multiplan Inc., where he served as senior vice president for claim operations, client services, sales and customer service. Sawaya previously worked for UnitedHealthcare and Midwest Security Insurance Cos.

Dr. Charles E. Hughes and Dr. Wayne Lee have joined the St. Francis Medical Group. Their practice, the Indianapolis Institute for Plastic Surgery, is located at 8051 S. Emerson Ave. on the St. Francis Hospital-Indianapolis campus.

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Indiana moves up in med tech rankings

Medical technology companies employed 19,950 Hoosiers in 2007 and supported another 35,000 jobs in supplier companies, according
to an analysis funded by an industry trade group.

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Indiana health groups dial back lobbying

Indiana health-related companies were somewhat absent from the lobbying bonanza that gripped Washington, D.C., in 2009. For
all the heat and light about health reform, major Indiana companies actually spent slightly less to lobby Congress.

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