Winnipeg Free Press - PRINT EDITION

IHS, Ontario firm sign partnership

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THE market for a Winnipeg company's automated hospital pharmacy equipment is getting bigger than its production facility can handle.

This week, Intelligent Hospital Systems announced it has entered into a manufacturing partnership with ATS Automation of Cambridge, Ont.

ATS will become the global manufacturer of IHS's Robotic IV Automation (RIVA) units.

The Winnipeg company, formed about six years ago with technology developed at the St. Boniface General Hospital Research Centre, will maintain its in-house research and development laboratory and will continue to develop product prototypes and enhancements at its Winnipeg headquarters.

CEO Niels Erik Hansen said the move to ATS's production facilities -- it has 20 around the world -- will likely mean his Winnipeg workforce of about 135 will lose about 10 positions in the next few months. He said high-level engineering technical positions will remain in Winnipeg.

He said demand for the $1.25-million robotic units that increase the speed and accuracy of hospital pharmacy compounding will soon outstrip the company's ability to make them.

Since its first sale at the end of 2008, the company has sold and installed about 26 units and this year it might come close to equalling that sales total.

An outbreak of meningitis last year in the U.S., that was traced back to contaminated IV compounds from an outsourcing operation in Massachusetts, has provided an enhanced in interest in IHS.

Despite that spike in demand, Hansen said the company has been working on a plan to deal with European and Asian sales.

He said the company is expecting at least a couple of sales to Europe this year. "We need to have systems in place to deliver those sales. It's not something you want to have to ship by air. And we need to have the ability to install and service our units all around the world."

Hansen said because of the sophistication of the units and the high degree of regulatory control, the agreement with ATS has been in the works for some time. Planning for the partnership began in 2011 and last year, ATS successfully manufactured multiple RIVA systems.

In addition to North America, ATS maintains automation facilities across Western Europe, as well as in India, China, Malaysia and Singapore. With about 2,400 employees and about $600 million in annual revenue, ATS is leading outsource manufacturer for some of the top names in the sector, including General Electric.

The robotics system of the RIVA unit has a high-tech look but Hansen downplayed the need to continue to make the glassed-in stainless-steel units in-house. "Robotics have been around for 40 years. The real value of what we do is in the software and control systems. I would rather see us grow that side of the business here than to try to build a larger manufacturing operation here."

Although sales are increasing, it would be tough for the small firm to pull that off with a product that will never need to be mass-produced.

But its star has been rising in the global market.

Last fall, IHS received a glowing endorsement from KLAS, an independent market research firm headquartered in Orem, Utah, that specializes in rating health-care technology vendors by impartially measuring vendor performance.

Its October 2012 report stated, "Although adoption is still early, the Intelligent Hospital Systems' RIVA was the highest-rated robot in every category in this study. IHS has steadily delivered upgrades that improve functionality and providers report IHS to be a good partner that provides exceptional service."

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition February 23, 2013 B6

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