INVICTA betting big on artificial knees - M. Ramesh
Chennai, April 11 "The way man walks," notes Mr Sathish Kumar, President and CEO of INVICTA Meditek Ltd, "is not going to change for the next ten million years." If Mr Kumar is right, his company is sitting on a huge growth potential.
Engage him in a conversation, you will come across some interesting expressions. "Last year, we did 30 knees," he would say and benignly add that it would be "500 next year". And sometime towards the end of the year, INVICTA "will introduce spine." Apparently, that is the language of ‘orthopaedic implants’ industry.
It was last December that INVICTA introduced ‘knee’, under licence from Endotech of the US. Statistics regarding Indian suffering with arthritis provides a good business case for the ‘knee’. According to Mr Kumar, about 50,000 knee implant surgeries happen in India each year, but the number is small only because of the high costs. The demand is for at least a million a year, he says, a demand which INVICTA Meditek hopes to convert into cash.
Three years ago, Mr Sathish Kumar chucked a high-paying job with a semiconductor company in California and took over the sick INVICTA, a company listed on the BSE. It was making some low-value implants such as screws, nails and plates. Upon a study, he discovered that he could make several other high-value implants cheaper and a further search led him to Endotech, a company that was formed and run by medical professionals.
Endotech had a patent for an advanced kind of artificial knee-joint, one that could swivel around all three axes. This not only meant freer movements for the person with this implant, but also less wear and tear of the product because of pressure being more evenly spread out over it. INVICTA had a licence agreement with Endotech and improved upon it.
Endotech’s ‘knee-joint’ was made of titanium, the metal most used for medical implants, being lighter and bio-compatible, or, accepted by the human body. But titanium wears faster and, more importantly, is expensive. INVICTA took Endotech design but produced a product using Cobalt-Chromium. Today, Endotech wants to buy from INVICTA. INVICTA test-marketed its products with leading orthopaedic surgeons and, according to Mr Kumar, the surgeons like it very much.
INVICTA’s plant in the Ambattur industrial estate, Chennai, today has a capacity to produce 2,500 artificial knees. The company is very small -- it achieved a turnover of Rs 40 lakh in 2006-07 and expects to close 2007-08 with around Rs 60 lakh. However, Mr Kumar believes that the company’s real business starts this year. He expects to sell at least 500 artificial knee joints and close the year with sales of Rs 4 crore. If the company achieves this, it would be a ten-fold increase in sales in two years.
Mr Kumar believes INVICTA would make a profit in the fourth quarter of the current year and turn in a net profit for the full year 2009-10. Sometime during the period, it would also start exporting -- the licence agreement with Endotech allows INVICTA to export to ten countries. The world market is huge -- according to a study of Credit Suisse, the global demand for medical implants is $27 billion, notes Mr Kumar.
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