Integra LifeSciences Holdings Corporation

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Integra LifeSciences Holdings Corporation







311 Enterprise Drive
Plainsboro, New Jersey 08536
Telephone: (609) 275-0500
Fax: (609) 275-5363
Web site:

Public Company
1989 as Integra LifeSciences Corp.
Employees: 1,180
Sales: $419.3 million (2006)
Stock Exchanges: NASDAQ
Ticker Symbol: IART
NAIC: 334516 Analytical Laboratory Instrument Manufacturing

Integra LifeSciences Holdings Corporation is a Plains-boro, New Jersey-based medical device company that focuses on neurosurgical/orthopedic implants and medical/surgical equipment. It started out involved in the development of biomaterials used to help regenerate skin, used on burn victims to establish a base for skin grafts and on patients undergoing brain surgery who relied on the absorbable material to help in the replacement of large sections of scalp. Integra continues to offer dermal regeneration and engineered wound dressings but has since added implants used in bone regeneration, the repair of peripheral nerves, and in small bone and joint fixation. Products in the companys equipment group complement the implant business and include ultrasonic surgery systems for tissue removal, brain measuring devices, cranial stabilization and brain retraction systems, devices used to cut and enter the cranial cavity, and equipment to drain cerebrospinal fluid from the brain. Integra also offers instruments used in general, neurosurgical, dental, spinal, and plastic and reconstructive surgery. Integras products are sold around the world through a direct sales force as well as independent distributors. Integra is a public company listed on the NASDAQ.


Integra was founded in the Philadelphia, Pennsylvania, area by Richard Ernest Caruso in 1989. He was born in Atlantic City in 1943 and used his ability to play football to earn a scholarship to Susquehanna University, where he graduated with an accounting degree in 1965. The following year he earned an advanced business degree from Bucknell University and began his business career as an auditor at Price Waterhouse and Co. in Philadelphia. In 1969 he went to work at LFC Financial Corp., a project financing company located in Radnor, Pennsylvania, that was in effect the restructured and relocated Lytton Financial Corp., a Los Angeles savings and loan firm that had been built by former theatrical press agent and screenwriter Bart Lytton but had been ruined by the crash of the California housing market in the 1960s. Caruso became an executive vice-president and principal at LFC and over the course of more than 20 years at the firm originated some $3 billion of creative lease and project finance transactions.

Although considered a successful man, Caruso was not satisfied with his life. In an interview with eVenturing, Caruso admitted, I did not personally feel successful because, in my mind, I could not point to any substantive real accomplishment other than my financial success. Thus, in 1987 he took a partial sabbatical to earn a Ph.D. from the London School of Economics, establish the Uncommon Individual Foundation to help entrepreneurs to develop and pursue dreams, and find a new business challenge for himself, one that would involve new technology and benefit mankind. He became interested in the idea of developing technology to replace body parts. In 1989, despite an utter lack of medical training, he formed a company focused on regenerative medicine, setting up shop in the Radnor Corporate Center. He soon came across an artificial skin technology that caught his attention, developed by Harvards Dr. John Burke and Dr. Ioannis Yannas of the Massachusetts Institute of Technology (MIT).

Burke was the director of the Burn Center at Massachusetts General Hospital and Shriners Burns Institute in the early 1970s when he developed a major advance in the treatment of serious burns. By completely removing severely burned skin he hoped to reduce the potential of wound infection, but it also meant an immediate skin graft. At first he relied on skin donors who shared similar genetic markers with the patient. The drawback of this method was the need for immunosuppressant drugs to fend off the bodys impulse to reject the graft, resulting in a highly compromised immune system and the possibility of other lethal threats. Burke also tried using the patients own skin, but with severely burned patients there was limited amounts of skin to be harvested. Burke began searching for another way to rebuild a patients skin, using a synthetic material. He recruited a partner to help pursue this idea, teaming up with an MIT professor of polymer science and engineering named Dr. Ioannis Yannas. Together they developed a scaffold made from the protein collagen that could be laid down over a wounded area after burned skin was removed and provide a medium in which a patient could regenerate tissue. While this scaffold would be eventually absorbed by the patients body, a second top layer, a flexible silicon sheet that mimicked the protective function of the top layer of skin, was ultimately removed.

Burke and Yannass artificial skin was patented in 1980 and subsequently licensed by Kansas City, Missouri-based Marion Laboratories, founded by Ewing Marion Kauffman, better known to the public as the owner of the Kansas City Royals Major League Baseball franchise. He invested between $35 million and $50 million in developing the wound care product and along the way acquired a Plainsboro, New Jersey, company called Colla-Tec, Inc., to produce the necessary raw collagen. Clinical trials began in 1986, but three years later Kauffman merged Marion with Merrell Dow Pharmaceuticals to form Marion Merrell Dow, Inc. Burke and Yannass product still needed further development before it could be presented to the Food and Drug Administration (FDA) for regulatory approval, but because there was not a large enough market for the product, Merrell Dow shelved the project and Colla-Tec was put up for sale. MIT then arranged to take back the product license by promising to pay half of the royalties it might receive by reselling the license.


Learning that the artificial skin project was on the market, Caruso persuaded Drs. Burke and Yannas as well as MIT to relicense their technology to his company. In 1991 Integra acquired Colla-Tec and two months later acquired some of the technology of Marion Merrells Wound Care Division. All of these assets were then packaged into a new subsidiary, Integra (Artificial Skin) Corp. Caruso continued his role at LFC, which also invested in Integra. Then, in 1992, he left LFC, bought back all the stock the firm held in Integra, and went to work for the start-up on a full-time basis.

The company began the process to receive FDA clearance for the Integra Artificial Skin Dermal Regeneration Template, while beefing up its capabilities through further acquisitions and adding absorbable medical products used to help with wound care, surgical bleeding, and drug delivery. These products also brought in revenues while the artificial skin product gained regulatory approval. Integra was able to post sales of $8.7 million in 1994 and $10.2 million a year later, but it also lost more than $27 million during this period, much of it due to development work on regenerative technologies for cartilage and peripheral nerves.


Integra Seeks to provide customers with clinically relevant, innovative and cost-effective products that improve the quality of life.

In 1995 Integra went public through a reverse merger with a bankrupt listed company, San Diego-based Telios Pharmaceuticals. Early in 1996 Integra made a public offering of stock raising $35 million in much needed cash. More than just providing a convenient way to take Integra public, the Telios acquisition also provided a wealth of intellectual capital, including technologies that could be applied to such areas as tissue engineering, cancer treatment, inflammation, immune system regulation, and thrombosis.

A month after the stock offering, in March 1996, the FDA cleared Integra Artificial Skin, which became the first tissue regeneration product to reach the market. Moreover, the company soon received approval from a number of other countries as well. However, the product had a limited market, essentially severe burn patients, and sales did not accelerate sharply. Revenues reached $13.1 million in 1996 and $14.7 million in 1997, while the company lost another $17 million. Clearly a change of direction was needed and to help achieve it Caruso recruited a new chief executive. In late 1997 he hired 36-year-old Stuart M. Essig, a managing director at Goldman, Sachs & Co. where he supervised the medical technology practice.

Essig lacked operational experience, but Integra already had a solid management team in place. Instead, his role was to improve the companys visibility on Wall Street and to find a way to better commercialize the artificial skin product. According to Investors Business Daily, Essig could have chosen any range of therapeutic targets. But he settled on neurosurgery, or surgery of the brain, spine, neck and central nervous system. Not only was it a fragmented field with no dominant player, the number of neurosurgeons were small enough that a limited sales force could market to them.


In order to make Integras stock more attractive to institutional investors, in May 1998 Essig engineered a 1-for-2 reverse stock split. By reducing the number of outstanding shares he was able to inflate the share price, making it more noticeable. Essig also looked to use his experience in mergers and acquisitions to build up a slate of products to create a neurosurgery brand by purchasing established companies. In September 1998 Integra acquired Rystan Company, Inc., the maker of Panafil, an agent used to remove (debride) burned skin and other wounds. The company then sold the product line to Healthpoint, Ltd., and entered into a comarketing agreement to sell Panafil to burn centers. Integras telemarketing unit also agreed to sell the product along with Accuzyme, Healthpoints debriding agent. In addition, in 1998 Integra entered into several business alliances. Sulzer Calcitek, which marketed some of the companys dental products, agreed to fund research to develop the next generation of BioMend, an absorbable tissue product used to restore gum tissue after oral surgery, which had received FDA clearance in 1995. A Johnson & Johnson company, DePuy, agreed to work with Integra on a cartilage regeneration product. Furthermore, Bionx Implants, Inc., and Linvatec Corporation reached deals to develop orthopedic implants.

More repositioning was in store for 1999. In March Integra spent $25 million to acquire the Wisconsin-based NeuroCare Group, a major provider of neurosurgery products, including instruments, monitors, and implants. Integras research and development efforts were also beginning to pay off, as a pair of internally developed products were launched in 1999: DuraGen Dural Draft Matrix for use in conjunction with cranium and spine surgery, and the Biomend Extend Absorbable Collagen Membrane, used to repair tissue after periodontal surgery. With a wealth of new products to sell, Integra began to experience a significant increase in sales. Revenues improved from $17.5 million in 1998 to $42.9 million in 1999, due almost entirely to the NeuroCare acquisition.


Company is formed.
Wound Care Division of Marion MerrellDow is acquired.
Company goes public through Telios Pharmaceuticals acquisition.
Stuart Essig is named CEO.
NeuroSupplies, Inc., is acquired.
Newdeal group of companies is acquired.

Expansion through acquisitions continued in the new century for Integra as it grew into a one-stop shop for neurosurgeons. In 2000 it bought Clinical Neuro-Care Systems, Inc., for $6.8 million to pick up external ventricular drainage systems and cranial access kits, and it spent another $11.6 million in cash for the cryosurgery product line and handheld neurosurgical instruments of NMT Medical, Inc. The following year Integra acquired a German company, GMSmbH, to add the LICOX Brain Tissue Oxygen Monitoring System at the cost of $2.3 million. A French company, Satelec Medical, maker of an ultrasonic surgical aspirator console and associated handpieces, was also bought for $3.7 million. Finally, in December 2001 Integra paid $4.3 million for NeuroSupplies, Inc., a major specialty distributor to neurologists, hospitals, and others. These new products helped to boost revenues to $71.7 million in 2000 and $93.4 million in 2001, and the company was finally able to turn a profit, recording net earnings of $26.2 million. The companys performance caught the attention of investors, who bid up the price of Integras stock by 93 percent in 2001. The company was also able to raise $113 million in a secondary offering of stock in August 2001.

Integra continued to expand its sales and distribution channels and bolster its product lines through acquisitions in 2002. They included Signature Technologies, Inc., a contract manufacturer of titanium and stainless steel implants; the neurosciences division of NMT Medical Inc., which added hydrocephalus valves; the NeuroSensor Monitoring system from Novus Monitoring Limited of the United Kingdom; and Padgett Instruments, Inc., a well-established marketer of instruments and other products used in reconstructive, plastic, and burn surgery. Integra also raised another $120 million in a placement of convertible notes to provide it with plenty of ready cash to fuel even further growth.

Revenues increased to $117.8 million in 2002 and net income approached $35.3 million. Momentum carried into the following year for Integra, which improved sales 58 percent to $185.6 million in 2003. The company launched several new products, including a next-generation dural graft product called DuraGen Plus. Acquisitions kept pace as well. JARIT Surgical Instruments, a marketer of surgical instruments used in virtually every surgical discipline, was added at the cost of $42.7 million. In August Integra purchased Tissue Technologies, Inc., the maker of the UltraSoft line of facial implants. Also acquired were Spinal Specialties, Inc., maker of chronic pain management kits, and Reconstructive Technologies, Inc., which offered a tissue expansion device.

Integra introduced close to 20 new products in 2004 and completed four more acquisitions, including the Sparta Surgical line of surgical instruments and critical care devices; R&B Instruments line of spinal and neurosurgical instruments; the Schaerer Mayfield USA, Inc., line of cranial stabilizing and positioning systems as well as skull pins, clamps, headrests, and other associated products; and Berchtold Medizin-Elektronik GmbH, a German manufacturer of electrosurgery generators and an ultrasonic surgical aspirator and related products. The addition of these products helped Integra to increase sales to $229.8 million in 2004.

Revenues increased to $277.9 million in 2005 and earnings totaled $37.2 million. All told, the company introduced 15 new products. The year also saw Integra become involved in an entirely new business that focused on the pathologies of the foot and ankle, supported by the acquisitions of the Newdeal group of companies, a French maker of foot and ankle surgery products. The combination of internally developed products and acquired products proved to be a successful formula in 2006. Integra increased sales to $419.3 million while recording net income of $29.4 million.

Ed Dinger


Integra Healthcare Products LLC; Integra LifeSciences Corporation; Integra NeuroSciences (International), Inc.; Integra NeuroSciences (IP), Inc.; J. Jamner Surgical Instruments, Inc.; Jarit Instruments, Inc.; Newdeal, Inc.; Spinal Specialties, Inc.


B. Braun Medical Ltd.; Codman & Shurtleff, Inc.; Medtronic, Inc.


Davis, Alison, Fact Sheet: NIGMS-Supported Basic Research on Skin Replacement Following Burn or Trauma Injury, National Institute of General Medical Sciences, June 18, 1999.

Goldblatt, Dan, Integra LifeSciences Hires a Heavy Hitter, Business News New Jersey, January 19, 1998, p. 1.

, Integras Big Score, Business News New Jersey, March 20, 1996, p. 14.

Grugal, Robin M., Integra LifeSciences Holdings Corp. Plainsboro, New Jersey Shift to Neurosurgery Is a Brainy Move After All, Investors Business Daily, February 20, 2002, p. A09.

Reeves, Amy, Integra LifeSciences Holdings Corp. Plainsboro, New Jersey Overhaul Helps Med Firm Skin the Competition, Investors Business Daily, July 30, 2001, p. A09.

Shared Uncommon Vision Leads to Birth of Regenerative Medicine,, November 21, 2006.

Smith, Carol, Artificial Skin Offers Genuine Hope, Seattle Post-Intelligencer Reporter, February 23, 2001.