Theragenics s a medical device company serving the surgical products and cancer treatment markets. The company makes money by manufacturing, marketing and selling disposable devices primarily used in certain surgical procedures. The company also makes money by producing wound closure, vascular access and specialty needles. Most importantly for its profitability, Theragenics is highly dependent on reimbursement rates and favorable treatment from healthcare providers such as Medicare.
Critical to Theragenics' growth is acquisition prospects to diversify its revenue stream as well as provide opportunities with synergies through combining product lines and intellectual property. Despite the possibility of potentially dilutive acquisitions, the company believes that long-term wise, acquisitions diversify existing product offerings, augment market coverage and customer base, enhance technological capabilities or offer revenue and profit growth opportunities.
Because there are more than one type of treatments for medical conditions, the product placements for the same type of condition is not identical. For example, in Theragenics' seed business, alternative competing treatments are MRT and robotic surgery, which all have been gaining market share. This gain in market share is determinant upon favorable reimbursement rates set by Medicare, and therefore the industry is very much dependent upon treatment by these larger entities. Should Medicare favor certain larger companies over smaller entities such as Theragenics, because larger companies may respond quicker to new or emerging technologies and changes in customer requirements.
TGX operates in an industry where rapid and significant technology change in products offered is the key to staying ahead of an evolving industry. TGX constantly invests in new brachytherapy, wound closure, vascular access, and specialty needle products. However, many of these brachytherapy and surgical products are technologically innovative and require significant planning, design, development and testing. These activities require significant capital commitments and investment. The securing of capital is therefore crucial to continuously stay competitively advantageous in the marketplace.
TGX competes in a wide scope of medical applications that compete for relatively few entities as customers such as Medicare.