Polymedica sees 12% growth, adds 29,000 new patients

WOBURN, Mass. -- PolyMedica, the parent company of diabetes and respiratory heavyweights Liberty Medical Supply and Liberty Home Pharmacy, is making gains after last November's $35 million payout to the federal government to settle a fraud investigation. The company reported a 12% growth last year in its core diabetes business, maintaining 674,000 active diabetes patients, according to a company financial statement. In February, PolyMedica continued its growth in the diabetes market when Port St. Lucie, Fla.-based Liberty's acquired National Diabetic Assistance Corporation. NDAC, a provider diabetes-testing supplies and respiratory medications nationally to Medicare beneficiaries, added approximately 29,000 people to Liberty's active patient base. The company also took in approximately $15 million in unaudited revenue in 2004. PolyMedica will pay $13.6 million for the company's patient list, inventory and equipment, and an additional $3.4 million for its headquarters building in Deerfield Beach, Fla., where it will continue to operate. Liberty said it will hire most of NDAC's employees, including its two founders. The company did take a hit in the third quarter, which ended Dec. 31, 2004 as a result of the government's fraud settlement. It also saw a $20 million decrease in cash collections that quarter due to a comprehensive documentation review it conducted that quarter. Patrick Ryan, the company's new president and CEO, said he is optimistic about the company's fourth quarter outlook. "The March quarter will be the first quarter to reflect the impact of the dramatic cuts for inhalation drugs and the three percent cut in reimbursement rates for diabetes testing supplies that went into effect last month," he said in a company release. "However, we expect to see solid sequential growth from our diabetes and pharmacy segments as the year progresses. In addition, we will continue to examine opportunities to make use of our strong balance sheet to expand beyond our core business through acquisitions."