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  • | 4:05 p.m. April 20, 2009
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Mercury Medical wants to increase the variety and amount of medical products it sends to the world.

The passion for Stan Tangalakis doesn't come from new technology or making sales goals in medical equipment. It comes from helping patients. That has driven growth and profits for his company, but the passion is still the engine.

“I've been in the homes of patients, with some of these kids, and even cried with them,” says Tangalakis, chairman and chief executive of Mercury Medical Inc., a medical products manufacturer in Clearwater. “That's where my drive comes from. That's the passion. Seeing us serve patients.”

Mercury helps patients by selling new and re-marketed health care products or renting health care equipment to hospitals and surgery centers.

The most significant thing Tangalakis has done in his 29-year CEO tenure has been changing the corporate focus at Mercury. The change was going from making and selling primarily respiratory, anesthesia and critical care products to being an all-inclusive health care company with a variety of equipment.

He used the example of the wealthy, but short-sighted railroad barons who only saw their business as limited to their cars on two steel rails. Meanwhile, trucks, planes and ships came along and saw the business more broadly as transportation. The railroad barons missed a grand opportunity to invest in other modes of freight transport.

“I told them I wanted to be a health care company,” he says. “I wanted to offer the service that hospitals did, even though we weren't in patients' homes every day. They got it.”

The company also offers technical consulting services, equipment repair and equipment reconditioning for the health care industry. Staff visit patients' homes to make sure respirators or other products are working properly or to change a catheter.

Tangalakis wants Mercury to provide products that provide a unique and proprietary design, or deliver better patient outcomes, or make an organization more efficient or save the customer money.

“The product has to have a story to tell,” Tangalakis says. “We identify a customer's needs. We like to have people call us. If there's no solution, we'll find it. We want to be a funnel.”

Mercury makes about 25% of what it sells. Tangalakis would like to see that percentage rise, along with the variety of products it sells and rents and the places they go to. It now directly distributes its products and equipment from other health care companies to 11 states in the Southeast through its own sales staff.

Diversification and growth is a constant goal in the evolving world of medical equipment sales, where the competitors include behemoths such as General Electric and Siemens.

Mercury's customers include hospitals, surgery centers, biomedical clinics, and home care clients. Outside the Southeast, Mercury Medical products are distributed through a network of dealers it calls channel partners. They are in Chicago, New Jersey, Boston, Dallas, California and Washington state and they are also selling other companies' products.

Mercury's sales in 2007 were $43.1 million. Tangalakis wouldn't comment on Mercury's other revenues, although he did say they were consistently increasing 5% to 10% a year until the past year. That's when the economy slowed and hospitals and surgery centers saw elective surgeries decline. That hurt Mercury product sales.

“It's been more challenging this year,” Tangalakis says. “Revenue has been relatively flat.”

What's happening among consumers is that if some are uninsured, or have a co-payment, or are out of work, and they have elective surgery, they often can't afford to do it, he explains. In the hospital, surgery puts heads on the pillows and brings in revenue. If someone is chronically ill, they can only stay in a hospital so long. Along with elective surgery being down, Medicare and Medicaid are reducing reimbursement on treatments. This affects hospitals and vendors, such as Mercury Medical.

Starting in pharmaceuticals
Mercury Medical started in Clearwater in 1963. Tangalakis spent 26 years in the pharmaceutical industry, then in the medical device industry.

He was in sales management, then marketing and product management. Tangalakis eventually ran a small pharmaceutical company, Pharmacare Inc., in Largo.
Mercury recruited him to run the company in 1980 and Tangalakis and a partner bought Mercury years later. In 1986, Tangalakis took full control of the company.

During his time there, the work force has grown from about 30 to 150 people. The product list has increased too, and the company has relocated to larger facilities a few times.

Mercury now has a 70,000-square-foot office and warehouse in Clearwater, and has another 10,000-square-foot facility nearby. It also has a 15,000-square-foot distribution and service center in Atlanta.

Despite this significant growth, Tangalakis only allowed the company to expand into contiguous states, to make sure it could fulfill its orders. The strategy worked.

Nearly all the manufacturing for Mercury's own products is done in the Far East, but the company does quality control work and assembly in Clearwater. The overseas plants are all compliant with standards set by the Food and Drug Administration, Tangalakis said.

To diversify its revenue, Mercury has a home care business unit, SurShip, which delivers products to patients' homes, and a biomedical division that repairs and maintains anesthesia, respiratory and critical care equipment.

“We're known for care of pediatric patients, for home ventilation and the delivery of oxygen,” Tangalakis says. Mercury has a respiratory therapist on staff.

If Mercury wanted to be a pure distributor, it would change its business model and use only a few major hubs, automate them and move boxes. But Tangalakis never wanted to do that. He didn't see how that would help patients.

And although it helps patients, Mercury does not always see happy outcomes. If a customer uses a Mercury Product continuously, for a year or more, it may be a sign of a terminal problem.

“These kids, some of their lives are short-lived,” Tangalakis says. “If you keep them most of year, you may lose them eventually.”

Hope for recovery
Tangalakis is optimistic that Mercury and the industry will return to growth numbers in 2010.

“We're going to come out of this,” he says. “I'm not concerned. We are very blessed. As long as we maintain the ladder of opportunity in this country and not continue to tax it and bring on trillions of dollars in debt, we'll be okay.”

To help that growth, he is looking what he calls “iSales,” or an internal sales force that is contacting survey centers and hospitals nationally to sell Mercury products. The company doesn't use the telesales or telemarketing name because of negative connotations with those terms. The Mercury staff works with customers on an assessment process to determine what their product needs might be.

“Many know the Mercury name. That gives us access into these customers,” Tangalakis says.

Mercury is also hopeful that if hospitals continue to feel restrictions on their capital budgets, it can build its equipment rental business.

Mercury differentiates itself by its experience in the industry and the personal service it gives to customers, which includes home visits or visits to hospitals to maintain equipment.

“We've been doing this 45 years and have a high level of credibility and a service orientation,” Tangalakis says. “Our reputation is about credibility, integrity and never compromising.
“When you have the satisfaction of helping someone, that's a high.”


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