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Puritan-Bennett Plans Big Carlsbad Addition

SAN DIEGO COUNTY BUSINESS EDITOR

Puritan-Bennett, already one of North County’s largest employers with a payroll of 620, will soon get much larger.

The medical equipment manufacturer said Wednesday that it plans to begin construction in February on the first phase of a 420,000-square-foot manufacturing complex on a 25-acre site that it owns in the Carlsbad Research Center. The company also said it expects to add another 100 employees over the next two years.

Puritan-Bennett’s Carlsbad-based Bennett Group is also developing a product that analysts say could by itself double the Overland Park, Kans.-based company’s annual revenues. Last year, the company’s sales totaled $204.4 million.

The new product is called an invasive blood gas monitor and involves a fiber optics-based catheter that is placed in a patient’s artery during surgery or intensive care to measure blood gases. If successful, the product will be the first “in-dwelling” device to give anesthesiologists and intensive care specialists real-time readings of blood data.

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The product is undergoing clinical tests and is about two years away from market introduction, said Robert L. Doyle, the Bennett Group vice president and general manager based in Carlsbad. The monitor would eliminate the time and cost in analyzing blood gases in laboratory tests.

Barbara Santry, a health care analyst with Dain Bosworth securities firm in Minneapolis, said the product could generate $200 million to $300 million more in sales by the mid-1990s, depending on whether competitive products emerge.

Leonard Yaffe, a health care analyst with Montgomery Securities of San Francisco, who also holds a medical degree, said the product would be a “major advance because no one has been able to develop a catheter small enough that could be put into the patient’s arm during surgery and still have enough fiber optics for monitoring capability.”

Puritan-Bennett now occupies 150,000 square feet in a plant near Palomar Airport, Doyle said. Upon the completion of the new facility’s $16-million first phase totaling 220,000 square feet, the company will transfer its entire Carlsbad operations to the new site.

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Puritan-Bennett is the nation’s leading manufacturer of hospital ventilators for patients whose breathing is “temporarily or permanently incapacitated,” Doyle said. Ventilators enable patients to breathe during surgery, though their lungs are paralyzed with anesthesia, said Dr. John Hattox, a San Diego anesthesiologist with the Anesthesia Service Medical Group in San Diego.

The company’s product line includes surgical ventilators, which typically sell for about $20,000 each, to smaller portable products used at home by patients with chronic lung ailments including emphysema. The company controls about 50% of the $200-million hospital ventilator market.

The company’s fastest growing line is a microprocessor-based ventilator called CliniVision that not only regulates breathing but helps doctors and technicians efficiently manage and bill for respiration therapy. The products, developed and manufactured in Carlsbad, have helped the Bennett Group become the fastest growing of Puritan-Bennett’s three operating groups, with $107 million in sales last year.

The Bennett Group’s sales have grown at a compounded rate of 18% to 22% over the last four years, Doyle said.

Puritan-Bennett relocated the Bennett group to Carlsbad from Los Angeles in 1984, starting with only about 80 employees. Doyle said the move has been a good one for the company because of its proximity to dozens of other biomedical manufacturers. The company has had difficulty recruiting engineers, however, possibly because the company is a “niche” manufacturer with a low profile, Doyle said.

Founded in 1913 as an industrial gas manufacturer, Puritan-Bennett got into the hospital equipment business after founder V. Roy Bennett invented the Bennett valve in the 1930s. Initially designed to safely regulate the flow of oxygen to airplane pilots, the valve soon was found useful in medical applications.

“The valve was a key invention because it was the beginning of the management of oxygen supply” to hospital patients, Doyle said.

Puritan-Bennett operates a maquiladora that makes plastic molds and disposable rubber products in Tijuana, where it employs 90, Doyle said. The payroll in Mexico could grow, as Doyle said the company is contemplating transferring certain operations there from the Kansas City area .

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Puritan-Bennett’s new invasive blood gas monitor has been under development since 1986 and was initially a joint project with Beta Group of Palo Alto, Doyle said. Last summer, Puritan- Bennett bought out Beta Group’s interest in the venture.

Although anesthesiologist Hattox said the blood gas monitor would be a “definite advance” if brought to market, he cautioned that several other companies are pursuing the same technology.


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