print edition of Providence Business News
The biotechnology industry has grown markedly in the last few years, both locally and across the United States. In Rhode Island, medical-device manufacturer Ximedica has been a key driver of that growth.
Randall S. Barko, the new president and CEO of Providence-based Ximedica, discusses his new role, Ximedica’s expansion and the international state of the medical-device business.
BARKO: I was a member of the advisory board here for about three years, so I had a good appreciation for the business before the founders had me step in. It wasn’t a hard transition, just getting deeper into details and things like that.
PBN: What are your hopes for the future of the company, both short and long term?
BARKO: First of all, Ximedica is a very dynamic company. It’s a great organization with a lot of talented professionals – there are over 100 professionals here in Providence – and in the fall of last year we opened a new office in Minneapolis. That office is continuing to grow. We currently have a couple of engineers from Providence that have relocated for at least a year to help, you could say, “Ximedicize” the Minneapolis office.
We want that office to be another Ximedica, not just an office. … Future growth will be [focused on] establishing more activities in other parts of the U.S. and the world.
PBN: Do you have a timetable in mind?
BARKO: We are evaluating several opportunities as we speak. We have people – team leaders - physically located in proximity to offices near key customers besides just the Minnesota office. They’re physically close by the customer so they’re the forerunner of future offices. … No matter what business you’re in today it’s competitive and we want to deliver
Certainly we intend to continue to support the medical industry on a global basis. We have had an office in Hong Kong for the last two decades. … We’re looking for expansion in Asia there to help branch into emerging markets.
It is a global marketplace. Our customers now have already started developing products for the emerging market by using local knowledge and talent. We want to support that.
PBN: How do you perceive the current state of the biotech market?
BARKO: It’s no secret that the population of the world is increasing. The longevity in age is increasing. You have a couple of different factors coming into play: quality of life becomes more of a priority – even in developing countries.
It’s a growth opportunity. A higher-percentage growth in device and health care expenditures are probably going to be in developing markets rather than in the U.S. and Europe. … For many years, many companies thought about taking their older products and selling them into emerging markets, but now it’s more developing devices to fit that demographic. You’re seeing more expansion outside the U.S. to serve emerging markets.
PBN: What kind of demand have you seen for Ximedica products?
BARKO: We are seeing a lot demand from our key customers with all of the changes that are going on in the health care marketplace today, we see that actually as an opportunity today. We can do the kind of development work in the way that they’re used to be bringing more value in a timely and more flexible manner.
The focus on everything we’re doing today is, No. 1, to be cost-effective – to provide a value to their customers.
PBN: What’s in the Ximedica product pipeline?
BARKO: The key in our business is that we are working on things that are not going to market yet, so we can’t talk about a lot of what we’re doing until they reach the market. Still, we have a lot of interesting things happening. A lot of major opportunities in the major health care [original-equipment manufacturers]. It’s exciting times for us for sure. … I think things are settling down with health care funding and issues. … We’ve seen a big desire and demand for new products that are unique to the emerging markets.
PBN: Do you think the medical-device excise tax is going to have an affect on Ximedica?
BARKO: The tax is a problem because most of the med-tech companies aren’t all Covidiens or Johnson & Johnsons. There are a lot of $10 million companies out there and they’re the ones that usually suffer. It’s a big impact to the core of the medical-device industry. …
In the end, it’s an opportunity for us. We’re taking lemons and turning them into lemonade because we can do things less expensively and more effectively, especially for the original-equipment manufacturers.
PBN: How do you find the Rhode Island business climate compared to other ones that you’ve worked in?
BARKO: When I was at Nypro, in Massachusetts, we had people from Rhode Island working there. Now, headquartered in Providence, we have some people from Massachusetts and Connecticut working here. It is cross-fertilization and more of a New England-based workforce than just a Rhode Island-based talent pool we’re able to draw from.
The Rhode Island environment is very dynamic and well-educated. We have 120-plus professionals in Providence at Ximedica and overall it’s positive. … We certainly have not had difficulty attracting the kind of talent we’re looking for.