Operating Segments

12 Months Ended

Sep. 30, 2011

Operating Segments [Abstract]

Operating Segments

11. Operating Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. In the first quarter of fiscal 2011, the Company announced it was changing its operational structure to renew focus on business units and the Company is now organized into three segments, as follows: (1) the Medical Device unit, which is comprised of surface modification coating technologies to improve access, deliverability, and predictable deployment of medical devices, as well as drug delivery coating technologies to provide site-specific drug delivery from the surface of a medical device. End markets include coronary, peripheral, and neuro-vascular, and urology, among others; (2) the Pharmaceuticals unit, which incorporates a broad range of drug delivery technologies for injectable therapeutics, including microparticles, nanoparticles, and implants addressing a range of clinical applications including ophthalmology, oncology, dermatology and neurology, among others. Based in Birmingham, Alabama, the Pharmaceuticals business includes the Company’s cGMP manufacturing facility; and (3) the In Vitro Diagnostics unit, which consists of component products and technologies for diagnostic test kits and biomedical research applications. Products include microarray slide technologies, protein stabilization reagents, substrates, and antigens.

The table below presents revenue, operating (loss) income and depreciation and amortization from the segments, for the years ended September 30, as follows (in thousands):

	2011			2010			2009
Revenue:
Medical Device	$	39,576		$	43,211		$	86,546
Pharmaceuticals		15,055			15,493			18,511
In Vitro Diagnostics		13,150			11,194			16,477
Total revenue	$	67,781		$	69,898		$	121,534
	2011			2010			2009
Operating (loss) income:
Medical Device	$	19,847		$	19,524		$	62,472
Pharmaceuticals		(32,522	)		(26,479	)		(5,248	)
In Vitro Diagnostics		4,275			3,304			8,081
Corporate		(9,118	)		(10,402	)		(7,804	)
Total operating (loss) income	$	(17,518	)	$	(14,053	)	$	57,501
	2011			2010			2009
Depreciation and amortization:
Medical Device	$	1,604		$	2,136		$	2,077
Pharmaceuticals		4,035			4,241			2,030
In Vitro Diagnostics		799			828			1,248
Corporate		707			613			557
Total depreciation and amortization	$	7,145		$	7,818		$	5,912

Segment results above for fiscal 2011 include asset impairment charges of $17.9 million and a goodwill impairment charge of $5.7 million in the Pharmaceuticals segment and restructuring charges of $2.2 million in Corporate.

Segment results above for fiscal 2010 include asset impairment charges of $1.9 million and a goodwill impairment charge of $13.8 million in the Pharmaceuticals segment and restructuring charges of $1.3 million and asset impairment charges of $3.0 million in Corporate.

Segment results above for fiscal 2009 include revenue of $45.0 million in the Medical Device segment associated with the terminated Merck collaborative research and license agreement, revenue of $4.9 million in the In Vitro Diagnostics segment associated with the expired Abbott Laboratories (“Abbott”) diagnostic format patent license agreement, purchased in-process research and development charges of $3.2 million in the Pharmaceuticals segment and restructuring charges of $1.8 million in Corporate.

Corporate includes expenses for administrative corporate functions, such as executive, corporate accounting, legal, human resources and Board related, that have not been fully allocated to segments. Corporate also includes special charges, such as restructuring costs, which are not specific to a segment.

Asset information by segment is not presented in the table above because the Company does not provide its chief operating decision maker assets by segment, as the data is not readily available.

Major Customers

Revenue from customers that equaled or exceeded 10% of total revenue was as follows for the years ended September 30:

	2011			2010			2009
Medtronic		15	%		14	%			**
Johnson & Johnson		13	%		17	%		11	%
Merck & Company			**			**		37	%

** -less than 10%

The revenue from the customers listed is derived from all three primary sources: licensing, product sales, and research and development.

Geographic Revenue

Geographic revenue was as follows for the years ended September 30:

	2011			2010			2009
Domestic		72	%		78	%		84	%
Foreign		28	%		22	%		16	%