Allied Healthcare Products, a respiratory medical-devices maker, spent hundreds of thousands of dollars in 2020 expanding its product line to meet what it believed would be a surge in demand for ventilators at the onset of the pandemic. By the time it churned out more machines, demand fell short of expectations. Earlier this month, the company filed for bankruptcy and plans to sell its assets, WSJ Pro Bankruptcy reported. “Having diverted a lot of resources — time, personnel, floor and machine space — to ventilator production, Allied found it had an inventory of ventilators it couldn’t sell,” Eric Peterson, the St. Louis, Mo.-based company’s lawyer, said at a hearing earlier this month. Other healthcare suppliers, including a vial manufacturer and a COVID-19 test-kit maker, are among companies that have filed for chapter 11 bankruptcy. Many such companies are rattled by diminishing sales as pandemic worries recede, and they are now burdened with products piling up in storage. “More than anything I’ve ever seen, COVID chose winners and losers during the lockdown, and it is determining winners and losers now,” said Ken Mann, managing director for investment bank SC&H Capital. Vial manufacturer SiO2 Medical Products, which sought protection from creditors in March, ramped up capacity to make 120 million vials a year during the pandemic. By the time the facility was ready, demand for COVID-19 vaccines had tapered. And vaccine distribution ended up favoring syringes over vials.
