CHAD dumps conservers

Monday, December 31, 2007

CHATSWORTH, Calif. - CHAD Therapeutics, the trailblazing pioneer of oxygen conservation technology, sold its conserver business to Naples, Fla.-based Inovo for $5.25 million in November, giving up the goose that never laid the hoped-for golden eggs.
Twenty years after giving birth to the conserver market, CHAD has essentially cleared the decks for entrée into the multi-billion dollar sleep market. The company hopes to begin marketing its first sleep device in early 2008.
CHAD’s decision to exit the conserver market underscores a number of truths. Sleep is booming; conservers, though not commodities, are milling about in a mature market; and not everyone is sold yet on conservers.
“The docs don’t think they work,” said Bob McCoy, managing director of Valley Inspired Products in Apple Valley, Minnesota. “They don’t seem to be aware that every home care patient uses one.”
Partly, McCoy blames the docs’s ambivalence on the lack of independent evidence-based research that proves conservers do work.
Joe Lewarski, a clinician and vice president of Invacare’s respiratory group, puts more faith in the proposition that docs believe in conservers—moreso anyway, than many respiratory therapists and nurses on the front lines.
Neither researchers nor clinicians see traditional conservers going away any time soon, not so long as age-old concentrators and gas tanks rule the market.
“I remember way back at Medtarde when there were 30 concentrator manufacturers and three conservers,” said McCoy. “Now that’s flipped.”
“In 1997, very few were using conservers,” said Lewarski. “Now they’re a major part of everyone’s business.”
In part, conservers have fallen prey to new technology. The more patients and providers adopt portable oxygen concentrators with built-in conservation technology, for example, the more the traditional conserver market dims.
“Ten years ago, conservers were growing by leaps and bounds,” said Lewarski. “Now that market has matured. Lots of product have entered into the market and new technologies, as well.”