Santa Rosa's TriVascular closes; 270 lose jobs
Company's owner says doubts over new stent led to shutdown
The Boston Scientific building at 3910 Brickway Blvd. in Santa Rosa. TriVascular, Inc., which was founded in 1998, was acquired by Boston Scientific Corp. in April of 2005.
JEFF KAN LEE / The Press DemocratPublished: Friday, June 16, 2006 at 3:00 a.m.
Last Modified: Friday, June 16, 2006 at 2:36 a.m.
In a setback for Sonoma County's growing medical technology industry, Boston Scientific Corp. on Thursday closed its TriVascular unit in Santa Rosa and laid off its 270 employees.
The Santa Rosa facility, acquired by Boston Scientific last year, was developing a stent graft system to repair the body's main blood vessel.
The tiny pipelike device for treating abdominal aortic aneurysms was undergoing clinic trials but had not yet been approved for the U.S. market.
"This is really a question of this particular technology not meeting its potential," said Charles Rudnick, a spokesman at Boston Scientific's headquarters in Natick, Mass.
He said the company concluded the technology being developed in Santa Rosa "is not likely to achieve what we thought it would."
The Santa Rosa facility immediately ceased operations and employees, who were notified Thursday morning, will receive 60 days of severance pay.
"The company deeply regrets the impacts of this decision on employees in Santa Rosa and elsewhere," Rudnick said.
Boston Scientific acquired TriVascular for an undisclosed sum in April 2005 after investing in the Santa Rosa startup in 2002. Rudnick declined to say how much money Boston Scientific spent on the efforts, but "we really did invest a significant amount of resources into trying to make this work."
Boston Scientific is one of the world's largest medical device makers, with $6.3 billion in annual sales and almost 20,000 employees.
Its decision to shut the Santa Rosa unit may be related to its $27 billion acquisition of Guidant Corp. last January. Boston Scientific won Guidant in a costly bidding war with Johnson & Johnson and now needs to cut expenses, industry observers say.
The TriVascular unit was Sonoma County's second-largest medical device company. Santa Rosa is headquarters for Medtronic's Vascular Division, which also makes stent grafts. Medtronic, based in Minneapolis, has about 1,280 employees in Santa Rosa.
Boston Scientific was part of a growing cluster of medical technology firms near the Charles M. Schulz-Sonoma County Airport. The local industry has its roots in Arterial Vascular Engineering, which had just five employees when it started in 1991 in Santa Rosa. AVE was acquired by Medtronic in 1998 for $3.7 billion.
TriVascular was founded in 1998 by a group of engineers and medical scientists who wanted to develop less-invasive treatments for abdominal aortic aneurysms.
Such aneurysms, which weaken vessel walls, usually lead to death if they rupture.
Stent grafts are inserted into arteries to relieve pressure from artery walls. They can be implanted with catheters, avoiding the risks of surgery. TriVascular's device was especially small, allowing it to be used on a wide range of patients.
TriVascular completed its first human implant in 2002 and hoped to have the device approved for the U.S. market in 2008. The company also was developing a thoracic aortic stent graft based on the same technology.
Last year, Boston Scientific said TriVascular "has made tremendous progress" in stent graft technology. There are 1.7 million U.S. patients with aortic aneurysms and a $370 million annual market for the stent grafts, the company said.
TriVascular founder Michael Chobotov, who headed the Santa Rosa unit for Boston Scientific, couldn't be reached for comment Thursday.
The Santa Rosa facility, a modern two-story building off Airport Boulevard, sits less than 100 yards away from a similar structure used by Medtronic. The facilities are part of a complex previously occupied by Agilent Technologies.
The Boston Scientific lobby was locked Thursday afternoon, and the parking lot near the building contained only a handful of cars. Two employees declined to comment.
Saeid Rahimi, dean of Sonoma State University's School of Science and Technology, said he was surprised by the closure. Rahimi said he'd recently talked to Boston Scientific executives about a new biotechnology program at SSU.
"This is a blow to the entire field in the North Bay," he said.
But it's not unusual for a large technology company to close a startup that it has acquired, he said. Rahimi pointed to Motorola, which is shutting the Rohnert Park telecommunications business it acquired from Next Level Communications in 2003.
Ben Stone, who heads Sonoma County's Economic Development Board, said the job market for medical technology workers has improved in recent years, with 30 or 40 companies in the North Bay region.
But Boston Scientific's closure is a setback, he said.
"For each of those individuals, the unemployment rate is 100 percent," he said.
Boston Scientific employed a variety of workers in Santa Rosa, including scientists, engineers, regulatory specialists and assemblers, Rudnick said.
The company did not disclose wages, but scientific and engineering jobs in the medical technology industry start at $75,000 and range well above $100,000, said Steve Weiss of North Bay Angels, a group that invests in medical technology startups.
Randy Lashinski, a partner in Direct Flow Medical, another device startup in Santa Rosa, said the closure is difficult news for for the industry and Boston Scientific's workers.
But he predicted new businesses will grow from TriVascular.
"Whenever a company shuts down, people get creative and start new ones," Lashinski said.
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