New President Chosen in Trimedyne Struggle
Trimedyne on Thursday named Howard K. Cooper president of the rapidly growing medical catheter maker that is embroiled in an investor dispute for control of the Santa Ana firm.
The appointment of Cooper appears to be a victory for Trimedyne Chairman Marvin Loeb, who has been asked to step down by a group of Trimedyne investors. In naming Cooper, Loeb has handpicked Trimedyne’s president and added a board member who will probably be a strong supporter.
Cooper was hired by Loeb once before. In early 1987, Cooper was appointed president of Torrance-based Cardiomedics, a firm Loeb founded in 1986. Loeb continues to serve as chairman of Cardiomedics, which makes a device to relieve stress on the heart during and after cardiac arrest.
Before joining Cardiomedics, Cooper was president of Pacesetter Systems Inc. in Sylmar until that company was sold in 1985 to conglomerate Siemens for $140 million.
Cooper, 54, replaces Michael Henson, who resigned as president last month. Cooper, who will leave Cardiomedics on March 31, will take over immediately at Trimedyne and assume Henson’s seat on the board.
Because of a board room battle for the chairman’s post, Trimedyne was not expected to fill Henson’s presidency and board seat so soon. As late as Monday, Henson said the selection process was at a standstill.
Delay Sought
Investor Irving B. Harris and his associates, who hold two of seven seats on Trimedyne’s board, had sought to delay the selection of a president until they could get Harris on the board and then in Loeb’s spot.
The Harris group, which owns 7.4% of all Trimedyne shares, vowed earlier this month to seek a proxy fight to oust Loeb. Analysts said that the appointment of Cooper might spur the Harris’ group to buy more shares in the company. Loeb and Harris could not be reached for comment Thursday.
In an attempt to stop Harris from buying more shares and attempting to take control of the company, Loeb filed suit in federal court in Los Angeles this week alleging that Harris violated securities laws in buying Trimedyne shares.
Cooper said he is not going to get involved in the board room squabble.
“Mr. Harris and Mr. Loeb are mature men, and they’ll settle their differences,” Cooper said. “I’m here to run the company.”
Cooper is joining a company that has recently left the start-up stage and become a profitable firm.
Founded in 1981 by Loeb, a self-described medical entrepreneur who has started two dozen medical companies, Trimedyne invested heavily in the development of laser catheters for the treatment of a wide range of diseases.
The company’s boom came last March when it became the first firm to receive Food and Drug Administration approval to market a laser catheter to treat arteriosclerosis in the legs.
After the approval, sales took off. For fiscal 1987, which ended Sept. 30, sales more than doubled over the previous year to $12.3 million, and Trimedyne reported its first annual profit of $440,000.
For the first quarter of fiscal 1988, sales topped $5.3 million, up 163% over the year-earlier period, and the company earned $1 million.
But Cooper said the real success of Trimedyne will come when the company receives FDA approval to market its laser catheter for treatment of diseases in the heart. He said he expected approval to come within the next 18 months.
In 1986 Trimedyne’s Laserprobe became the first laser device approved by the FDA for clinical trial use in the non-surgical treatment of arteriosclerosis in the heart. The program was expanded last July, allowing Trimedyne to begin multiple clinical trials.
Skeptics claim that laser catheter technology is not advanced enough to treat heart disease and that better technologies will be developed.
But if Trimedyne is successful in gaining FDA approval quickly, it could become the first company to compete in a market that is potentially far more lucrative than the market to treat arteriosclerosis of the leg.
Cooper said he will bring to Trimedyne the management experience needed to run a large catheter manufacturer and marketer.
Analysts who follow Trimedyne have been speculating on Henson’s successor for weeks. They said they were not familiar with Cooper and were surprised at his appointment.
Loeb has said he was leading an “international search” for the new president, and Henson had indicated that Trimedyne was grooming Vice President Rick Randall for the presidency. Cooper said Randall has been promoted to executive vice president and will remain with the company.
Randall Called Critical Asset
Frank Ingersoll, a medical technology analyst with Knibb Securities in San Antonio, said he considers Randall to be the company’s most critical asset because of his marketing expertise and experience at Trimedyne.
“Obviously it’s too early to judge Cooper. But Rick Randall has emerged as the key for the company,” Ingersoll said. “And his presence is going to mean a lot.”
But the board room battle isn’t expected to end soon.
Trimedyne said Thursday that its board has developed anti-takeover moves that establish strict deadlines for nominating new directors to the company.
The anti-takeover provisions might make it more difficult for Harris to win out over Loeb, but they won’t make Harris go away, said Ellen Hexter, a medical technology analyst at Deutsche Bank Capital in New York.
