As a small company selling into the fragmented wound care markets, Integra was spending as much as it was making. As a platform biomaterials company, Integra faced partnership risk and stood to only get a cut of end-user revenues. It needed a source of direct revenues. A year ago, the company's new CEO began building a neurosurgery business through acquisitions, initially based on mature, revenue-producing products. The strategy seems to be working; the company reached profitability in the last quarter and now holds the third position in a fragmented neurosurgery market. But the incremental strategy that has brought Integra to profitability inherently has its limitations. Now that it has created a growth expectation, it needs to achieve critical mass, through increasingly larger acquisitions or home-run products.

For several years, a handful of manufacturers has been selling biocompatible adhesion barriers aimed to separate tissues from each other during healing so that post-operative adhesions don't form between adjacent structures. FzioMed hopes to offer a cost-effective alternative to this market with a bioresorbable polymer called {Oxiplex}.

In the late 1980s, medical supply companies sought to leverage their relationships with new customers by creating a broad portfolio of diverse products. Smith & Nephew is pursuing a different tack--having spent a decade making one acquisition after another, it spent the last several years selling off most of those businesses. What remains is a company focused on products that repair tissue, in areas such as orthopedics, wound care, and endoscopy.