Biotechs turn to 'branding' to unravel merger maze

When Norwood-based ESC Medical Systems and Coherent Medical Group merged in April, the aesthetic and ophthalmic laser company suffered what could be called a brand-identity crisis.

Just two years prior, ESC had merged with Sharplan Laser Industries--and before that with Seattle-based Luxar Corp. And earlier this month, the company bought yet another firm: Salt Lake City-based HGM Medical Systems.

So, the new company had at least two names, four web sites and hundreds of products that were known to customers by their own names, like EpiLight and VascuLight.

"If we changed everything at once, we worried that no one would recognize us," said Pamela Pasakarnis, director of corporate marketing communications for ESC Medical Systems.

While in this case the company was able to pull off a new name and brand--Lumenis--others have not been so lucky.

With the furious pace of mergers and consolidations in the medical device, pharmaceutical and biotechnology industries, many companies, even the big names, are having a problem letting customers know who they are--and who they were.

"Very often, any change in branding is a political trauma for people," said Eleanor Selame, president of Newton-based BrandEquity International, which developed the brand for Lumenis. "They have stakes in the old. They know they have market share with this brand, and they are afraid of the unknown."

Selame said she is getting more business from the medical device and pharmaceutical sectors. BrandEquity also recently did a branding assignment for Abbott Park, Ill.-based Abbott Laboratories, which purchased Bedford-based MediSense Inc., a maker of glucose-monitoring equipment.

At the outset, it had appeared to be a cut-and-dried case: Abbott is a large, global pharmaceutical company while MediSense is a small medical-device company. Abbott would appear to be the overriding name choice. However, Selame soon discovered a problem: Abbott is a heavy-hitting name in the United States, but MediSense had more cachet in Europe.

Selame proposed that Abbott absorb MediSense--but leave the MediSense name on the glucose machines, which sold under the product name "Precision."

"We found a way to let them have their cake and eat it too," Selame said.

In other cases, a product's brand name is better known than the company that makes it. And with so many mergers and acquisitions, customers may only know a product by its brand.

"The solution is to have a brand name separate from a company name," said Jerry Katz, president of Waltham-based Applied Marketing Sciences Inc., which helps medical-device companies develop products and prototypes.

Katz, too, has experience with branding problems. For one client, he set out to research blood analyzers made by Swiss-owned Ciba-Geigy, but quickly learned it wasn't going to be easy: The company had merged in 1985 with Corning Inc. to form Ciba Corning Diagnostics Corp.--but then was sold in 1995 to a bigger company called Chiron, which recently sold it to Bayer Diagnostics.

Even though it changed hands so many times and is now owned by Bayer, Katz found that machines in Europe still bore the Ciba Corning name.

Despite the confusion, he said the Ciba Corning brand works for Bayer, because Europeans know the Ciba Corning name better. And Bayer is still selling the machines.

"People were aware of the progression of companies but they all knew it was the same device," he said. "They (the companies) did a good job educating the public about the changes."

While Katz says it's always wiser to keep the brand name of the product separate from the company name, Selame says the decision should be made on a case-by-case basis. Sometimes, smaller companies may benefit from the name recognition of larger companies. In other cases, the product is so well-known it should stand alone.

"Companies can use the brand as an asset, even if it is sold to Johnson & Johnson," Selame said.

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