Philips Buys RespirTech for Undisclosed Amount

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Dutch conglomerate Philips recently announced that it will purchase Respiratory Technologies Inc. (RespirTech). According to its website, RespirTech describes itself as a St. Paul, Minnesota-based provider of inCourage vests, which help fight respiratory disease. According to a news release, the terms of the deal were not disclosed.

RespirTech’s website states that the inCourage vest uses high-frequency chest compression to help loosen and move mucus through the lungs. According to RespirTech’s website, the inCourage technology was developed by Pediatric Pulmonologist Warren Warwick, M.D., and Leland Hansen, MPH, in the early 1990’s to provide more effective secretion clearance for University of Minnesota cystic fibrosis patients.

According to Philips’ website, the conglomerate has primary divisions in the areas of healthcare, lighting, and home electronics. Philips’ 2016 annual report states that sales in its HealthTech portfolio increased 4% and topped $19 billion. In contrast, news sources state that RespirTech was founded in 2004 and reportedly had nearly $37 million in revenue in 2015.

Regarding the acquisition, John Frank, Philips’ business leader for sleep and respiratory care, said in a news release:

With this transaction, we will broaden our portfolio with a proven therapy to enable patients with chronic respiratory disorders manage their condition and receive the care they need in the home.

According to Philips’ CEO, Franz van Houten, Philips has transformed itself over the last five years into a differentiated global health tech leader. Mr. van Houten stated that the markets Philips’ serve have attractive growth and attractive profitability. According to news sources, GE Healthcare, Siemens Healthineers, and Toshiba Medical Systems are other conglomerate divisions competing with Philips in the healthcare space.

As one analyst notes, the Twin Cities have produced a number of competing companies that make vests for treating lung conditions, including New Prauge-based ElectroMed Inc., and St. Paul-based Hill-Rom.

Michael Burns
Michael Burns is an associate in the firm's Orange County office. Dr. Burns' practice focuses on patent prosecution for mechanical, medical device, and life science clients. Prior to joining the firm, Dr. Burns did post-doctoral research on cardiovascular systems. At the University of Chicago, Dr. Burns was awarded the Ruth L. Kirschstein National Research Service Award to study how oxygen affects blood vessel growth in the lung. At the Ohio State University, Dr. Burns designed and built a flow system for studying how best to restore blood flow after someone has suffered a heart attack. Dr. Burns worked as a summer associate at the firm in 2013 and joined the firm in 2014.
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