Profile: Somanetics Corp (SMTS.O)

Somanetics Corporation, incorporated in 1982, develops, manufactures and markets the In Vivo Optical Spectroscopy (INVOS) System, a non-invasive patient monitoring system that continuously measures changes in the blood oxygen levels in the brain and elsewhere in the body in tissues beneath the sensor in patients with or at risk for restricted blood flow. The INVOS System consists of a portable monitoring system, including technology, which is used with multiple single-use disposable sensors, called SomaSensors or OxyAlert sensors. During the fiscal year ended November 30, 2008 (fiscal 2008), net revenues from disposable sensors comprised approximately 72% of its net revenues. As of November 30, 2008, the Company had an installed base of 2,523 INVOS System monitors in the United States in 714 hospitals, and during fiscal 2008, it sold 424,647 sensors worldwide. In November 2008, it acquired ICU Data Systems, Inc., a technology development company,

The Company sells the INVOS System through a direct sales team in the United States, consisting of salespersons and clinical specialists, and two independent sales representative firms. Outside the United States, it markets the INVOS System through independent distributors, including Covidien, in Europe, Canada, the Middle East and South Africa, and Edwards Lifesciences Ltd. in Japan. The INVOS System uses the Company’s technology to analyze information received from the disposable sensors, and provides a continuous digital and trend display of an index of the blood oxygen saturation in the area of the body under the sensors.

Surgeons, anesthesiologists, pediatric and neonatal intensive care unit (ICU) physicians, and other medical professionals can use the information provided by the INVOS System, in conjunction with other available information, to identify brain and other tissue oxygen imbalances and take necessary corrective action. Once the cause of a cerebral or other tissue oxygen imbalance is identified and therapy is initiated, the INVOS System provides immediate feedback regarding the adequacy of the selected therapy. The measurement made by the INVOS System is dominated by information from the blood in the veins, where the balance of oxygen supply and demand can be more effectively assessed. Therefore, it responds to the changes in factors that affect the balance between oxygen supply and demand, including changes in arterial oxygen saturation, blood flow, hemoglobin concentration and oxygen consumption. The INVOS System responds to global changes in brain or other tissue oxygen levels and to events that affect oxygen levels in the region beneath the sensor.