Westwood Maker of Dialysis Machines Pulls Plug

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Last year’s credit crunch came at just the wrong time for Xcorporeal Inc., whose scientists were close to launching costly clinical trials of a portable kidney dialysis machine they’d been working on since the company’s founding in 2006.

While world financial markets are now on the mend, the recovery came too late for the former Westwood company, which sold nearly all of its assets late last year to the U.S. arm of German health care giant Fresenius SA for $8 million and future royalty payments.

Now it will be up to Fresenius, which operates kidney dialysis centers nationwide, to commercialize Xcorporeal’s three experimental products: a compact artificial kidney for hospital-based renal therapy, a second machine designed for home use and a backpack-sized wearable unit.

With the only remaining assets being the royalty rights for any products that make it to market, Xcorporeal will essentially cease operations when the sale closes, which is expected by Feb. 28, said Chief Executive Kelly McCrann. It is not clear if any of Xcorporeal’s eight employees will be retained or if Fresenius USA, based in Waltham, Mass., will take over Xcorporeal’s leased facilities in Lake Forest, where the company had recently moved.

“It made sense for us at this point to combine forces with really the global leader in kidney dialysis technology to bring our technology to market,” said McCrann, a veteran health care industry executive and Xcorporeal director who took over as chief executive when his predecessor left.

To slow its cash burn last year, the company drastically cut expenses, laid off 19 people in March and launched a study of strategic alternatives, according to regulatory filings. The company’s stock has been trading on the pink sheets for pennies since being delisted from the New York Alternet in September.

Changing Name, Not Price

The brutal recession forced Romfab Inc. – the maker of an unusual exercise machine that it claims can give a full-body workout in four minutes – to cut costs and lay off workers.

Now, company founder Alf Temme has made one more concession to drive sales: changing the name of the machine from the terse ROM to the more accessible QuickGym.

But there is one thing that hasn’t budged: the $14,615 price tag. Temme continues to maintain the 405-pound, flywheel-driven apparatus is actually a bargain over the lifetime of a busy person who doesn’t have time to go to the gym.

“The QuickGym costs what it costs. See how you feel after four minutes,” said Temme, who began making and selling the device 19 years ago after obtaining the intellectual property from its inventor. The QuickGym functions like a combination rowing machine and a stair-stepper, with its pulleys and the flywheel providing varying levels of resistance based on body weight.

Temme has begun to make some headway in individual sales to the military, particularly to units heading to Iraq and Afghanistan where security concerns make traditional outdoor training regimes unsafe. But despite a celebrity client base that includes actor Tom Cruise and motivational coach Tony Robbins, Temme has worked hard for every one of the more than 5,200 sales he has made over the years.

Even so, Temme said he learned long ago from his days of building custom spas that cutting prices and making the low bid won’t necessarily bring you more business.

“People who want to use price as an excuse won’t buy it at $7,000 either,” he said. “But you’ll find that once they get it into the house, people won’t use my machine as a clothes hook.”

U.S. HealthWorks Acquisition

U.S. HealthWorks Medical Group, a fast-growing operator of occupational health and urgent care centers, added to its network last month with the acquisition of four of the five HealthForce Occupational Medicine centers in and around Seattle.

U.S. HealthWorks, based in Valencia, now has 17 medical centers in the state of Washington and 128 nationwide.

“The Puget Sound market is an important one for us and we believe the acquisition of these highly regarded medical centers … enhances our position as the leading operator of occupational health and urgent care centers in Washington,” said Dr. Andy Parker, senior vice president of operations, Northwest division.

Terms of the transaction were not disclosed. HealthForce Occupational Medicine said it was divesting the outpatient centers to focus on its work-site division.

Staff reporter Deborah Crowe can be reached at [email protected] or at (323) 549-5225, ext. 232.

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