Sector News

Ventilator maker Vyaire Medical files for bankruptcy

June 16, 2024
Life sciences

Vyaire Medical has put up the for-sale sign, as it files for Chapter 11 bankruptcy following dropping demand in the wake of the COVID-19 pandemic.

The global ventilation and respiratory device manufacturer—originally spun out as a joint venture between BD and Apax Partners in 2016—said its decision followed “below-plan performance in the first half of the financial year, which frustrated efforts to refinance company debt,” and that Vyaire will remain open for business in the interim.

“Chapter 11 protection will offer us the breathing room we need to explore selling our businesses to capable, well-financed buyers that have the financial ability and stability to execute on the Respiratory Diagnostics (RDx) and Ventilation business strategies delivering our vital products to customers and patients in need,” CEO John Bibb said in a statement.

“Our lenders continue to support our business, and we are working together to go through this process with as little disruption as possible to our customers and trusted partners,” added Bibb, who was named chief in May of last year.

The Chicago-based company said the Chapter 11 filing would only affect operations within the U.S. and “one non-operational international holding company.”

Vyaire’s diagnostics portfolio covers a variety of devices for gauging lung function, including spirometry and plethysmography systems, as well as ECG pads and six-minute walk test trackers.

Its hospital ventilator catalog, meanwhile, covers neonates, pediatrics and adult patients. Vyaire previously sold off its respiratory and anesthesia consumables business to SunMed in May 2023—a deal that Vyaire disclosed totaled about $310 million, netting the company about $134 million in cash after paying down its outstanding credit facility.

“We remain committed to the success of our customers, our partners, and our employees and will continue to live out our core values in the work we do,” said Bibb. “Our plan is to maintain the team needed to operate safely and deliver effective healthcare solutions.”

In a Delaware bankruptcy court filing (PDF), Bibb pointed to the drop-off in demand for ventilators post-COVID as a main contributor to the move, alongside “unsustainable overhead costs” and difficulties in pivoting its strategy following the SunMed transaction—while “ultimately the proceeds from the Consumables sale did not provide the Company sufficient runway to maintain sustainable profitability or avert a near-term restructuring transaction.”

The company also lost more than 10% of its market share in the sub-acute ventilation segment between 2021 and 2022, the filing said.

Apax Partners, meanwhile, took full control of Vyaire from BD in March 2018. Apax Global Alpha, the firm’s investment company traded on the London Stock Exchange, reported (PDF) earlier this year “adverse trading developments in Vyaire” during the first quarter, leading it to take a 24-million-euro write-down on the company’s value.

Elsewhere, the FDA earlier this year elevated a recall of outdated AirLife hand-powered bag-valve masks that may still be in circulation, with the devices commonly found in ambulances and emergency rooms. A duckbill valve manufacturing defect was discovered that could block ventilation delivery, but only among hardware produced in 2017 or before. The AirLife brand was included in the 2023 sale to SunMed.

By Conor Hale

Source: fiercebiotech.com

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