Medical Device News

Integrated's $10M to fuel diagnostics clinical work

Mark Hollmer — Wed, 22 Feb 2012 11:32:55 -0500

Startup Integrated Diagnostics has reeled in another $10 million to fuel further clinical work on its in vitro proteomic-based diagnostics programs, with an eye toward hitting the commercial market in 13 months or so.

InterWest Partners, The Wellcome Trust and BioTechCube Luxembourg supplied the funding for what is the third and final segment of $30 million in Series A financing announced in 2009, months after biotech pioneer Lee Hood launched the company. (Integrated Diagnostics also has a nickname, too--call it "InDi"--according to its announcement.)

Beyond diagnostics, the funding will help fuel the company's development of molecules--known as protein-catalyzed capture agents--for both in vivo molecular imaging and potential treatments. As Xconomy explains in a story about the new cash infusion, Integrated Diagnostics is focused on developing first-ever tests that spot blood-based proteins in order to reveal disease far earlier than existing diagnostics can, initially for lung cancer.

Plans also call for debuting a diagnostics test commercially in just over a year and a possible IPO soon after, CEO Al Luderer, who now has his executive team in place, told Xconomy. Along with the funding announcement, the company disclosed it hired Donald Seaton as its CFO and James Garner as chief business officer, filling out its executive team.

"We're in great shape for the year ahead," Luderer said, as quoted by Xconomy. Hood developed his initial research regarding protein blood markers at The Institute for Systems Biology.

- here's the release
- read FierceBiotech's take
- check out Xconomy's coverage

Vascular Magnetics snags $7M in Series A

Liz Jones Hollis — Wed, 22 Feb 2012 09:28:10 -0500

Peripheral artery disease is a frustrating condition. Current treatments, including drug-eluting stents and angioplasty, don't always stand the test of time, and arteries can become blocked again. But one Philadelphia-area company is looking to change the face of how PAD is treated--and now has some financing to back up its plans.

This week, Vascular Magnetics announced that it had raised $7 million in Series A financing to advance the development of its magnetically targeted drug delivery system to treat PAD. Devon Park Bioventures was the lone investor in the round.

To help PAD patients, the company has developed a Vascular Magnetic Intervention system, which uses magnetically guided nanoparticles to deliver drugs to diseased vessels. Vascular Magnetics' first product uses paclitaxel, which is also used in drug-eluting stents to treat coronary artery disease.

The company will use the money to complete the preclinical development of its system and eventually start a clinical trial. "We expect to begin the clinical trial in 2014," said company COO Richard Woodward.

Vascular Magnetics' technology has the potential to be used in other diseases that require targeted drug delivery, according to the company, which was spun off last year from The Children's Hospital of Philadelphia.

- read Vascular Magnetics' release

Medtronic might consider spine unit sale

Liz Jones Hollis — Wed, 22 Feb 2012 08:18:03 -0500

Painful news coming from Medtronic's ($MDT) spine unit this week: During its third-quarter earnings call, the company disclosed that revenue from its spine business declined 9% to $784 million compared with last year. And based on comments made during the call, some analysts predict that the company could be edging toward putting its spine business on the block.

"I was not happy with our overall performance," CEO Omar Ishrak said of the unit. "The year-over-year declines are simply not sustainable over the long term," he added. "While we continue to believe in the potential of this market, we urgently need to see meaningful signs of improvement from our current initiatives. If we do not, we will need to reassess our strategy and approach for this business."

Those words seem to have caught the attention of analysts. "He did mention it as a possibility for the first time," said Tim Nelson, an analyst with Nuveen Asset Management, as quoted by the Pioneer Press. "Here we have the first indication that the new CEO is willing to stir the pot."

While spine indeed took a hit, another troubled busines--ICDs--also experienced a painful quarter. Third-quarter revenue from ICDs was $674 million, down 9%. The company blamed weaker ICD sales on fewer procedures in the U.S. However, pacing revenue came in at $467 million, representing growth of 3%.

Despite the disappointing spine and ICD news, there were bright spots for the company, including international sales and emerging markets. International sales accounted for 45% of Medtronic's worldwide revenue in the quarter. Meanwhile, emerging market revenue jumped 15% to $395 million, the company noted in a statement. Ishrak said during the call that Medtronic plans to grow its emerging market revenue to 20% of overall company revenue over the next few years.

Overall, Medtronic recorded worldwide third-quarter revenue of roughly $3.92 billion, a slight increase from the prior year period of $3.86 billion. Third-quarter net earnings were $935 million, or 88 cents per diluted share.

- check out the Medtronic release
- get the earnings call transcript
- read the Pioneer Press report

New Enzo test aims to boost colonoscopy compliance

Liz Jones Hollis — Tue, 21 Feb 2012 23:30:04 -0500

Colon cancer is very common in the U.S. The American Cancer Society estimates that there were roughly 140,000 cases of colorectal cancers in the U.S. last year. Despite these numbers, many Americans are reluctant to undergo colonoscopies, even though the procedure could save their lives.

However, a new test from Enzo Clinical Labs could help change these numbers. The New York State Department of Health has approved Enzo's ColonSentry test to assess a patient's risk of having colorectal cancer--and all it requires is a small blood sample.

ColonSentry uses RNA in the blood to measure the levels of the expression of 7 genes. These genes serve as biomarkers that help assess current presence or severity of disease, and doctors can use the results of the test to identify those most at risk for colorectal cancer.

The company plans to start offering its test next month, and it should serve as a valuable tool for both primary physicians and OB-GYNs to guide and direct their patients. And because it is licensed in New York, where the company has a large footprint, it is now licensed in the majority of states.

As Barry Weiner, founder, president and CFO of Enzo Biochem ($ENZ), told FierceMedicalDevices, the test could help boost colonoscopy compliance, especially for those who have been reluctant to undergo the procedure. He also pointed to a shocking statistic: roughly 40% who should get colonoscopies fail to do so--either out of reluctance to undergo the prep work, or the fear of being put under. But this tool could help patients understand their risk and the necessity of getting the procedure done.

Indeed, it might even encourage those in their 40s and early 50s--below the age guideline for getting colonoscopies--to see if they are at risk for the disease and catch it earlier if they do happen to develop it.

A number of physicians have already expressed interest in this new test. But Enzo is hardly resting on its laurels. Weiner told FMD that his company has a large pipeline of products, including one to assess a patient's heart risk profile. Furthermore, the company has been aggressively moving to become a center of excellence for molecular testing.

Enzo Biochem, the parent of Enzo Clinical Labs, Enzo Life Sciences and Enzo Therapeutics, is an intergrated company with a "full compendium of capabilities" targeted to end users, Weiner said. He added that the company has a unique business model and can even take tests others have developed and modify them to make them more efficient. Indeed, Enzo is positioned "very, very nicely" to meet the demands of its users, he explained.

- get the Enzo release

J&J's Weldon to step down as CEO, leaving post to Gorsky

Liz Jones Hollis — Tue, 21 Feb 2012 22:02:55 -0500

The future is a little clearer at Johnson & Johnson ($JNJ), which has endured a number of recalls over the past year or so. The drug-and-device giant has named Alex Gorsky as its next CEO, succeeding Bill Weldon. Gorsky is a familiar face in device and diagnostics circles, having served as worldwide chairman of that group since 2009.

Weldon will step down as CEO on April 26, but will retain his title of chairman.

The choice of Gorsky might come as a bit of a surprise, as The Wall Street Journal notes. Many thought Vice Chairman Sheri McCoy had a bit of an edge over him to become the ninth head of the company.

Gorsky takes the helm of a company in which the device unit faces some problems, including lawsuits over recalled artificial hips. "It's been a challenging time for devices, but not through any of Alex's doing," Leerink Swann's Rick Wise told Bloomberg. Gorsky is "a thoughtful, disciplined, capable guy" who should steer J&J well, he added.

Still, many are expecting a smooth transition. "We do not anticipate significant changes in J&J's strategic direction under his leadership," Wells Fargo's Lawrence Biegelsen wrote, as quoted by Bloomberg.

But while most analysts are absorbing the news, at least one expert sees the pick as questionable, particularly since Gorsky is an insider. The University of Michigan's Erik Gordon says the move shows J&J isn't serious about changing its corporate culture, which has been the epicenter of problems."I think it's a big mistake," he said, as quoted by The New York Times.

One of the biggest tasks facing Gorsky is the proposed takeover of Synthes, which J&J bought last year for $21.3 billion. While the orthopedics company looks like a good catch, EU regulators have expressed concerns. This morning, reports emerged that J&J has offered concessions to alleviate those concerns.The European Commission said it would decide on the deal by April 26, extending its deadline by 10 working days to assess the concessions.

- see the J&J release
- here's the WSJ article
- read more from Bloomberg
- check out the NYT story
- get an update on Synthes

Special Report: Johnson & Johnson/Synthes - Top 10 medical device deals of 2011

Related Article:
J&J to buy Synthes for $21.3B

Dako, Amgen in companion Dx pact

Liz Jones Hollis — Tue, 21 Feb 2012 17:20:11 -0500

Over the past few months, we've profiled a number of companion diagnostics deals between big biopharmas and diagnostic companies. This week, Denmark's Dako reported it is working with Amgen ($AMGN) on a test for a cancer drug candidate currently in clinical development. Last month, Dako announced a collaboration agreement with Amgen for the development of drug and diagnostics for cancer. "This new collaboration with Amgen underlines Dako's commitment to advance personalized medicine in cancer treatment as the selection of patients most likely to benefit from a specific treatment will increase the probability of therapeutic success for cancer patients suffering," Dako CEO Lars Holmkvist said in a statement. Dako statement

Thermo Fisher done with big deals ... for now

Liz Jones Hollis — Wed, 15 Feb 2012 15:52:35 -0500

Acquisition-hungry Thermo Fisher Scientific ($TMO) is taking it down a notch in 2012. CEO Marc Casper tells Bloomberg that after making 5 acquisitions last year, it will use its cash to pay down its $7 billion in debt. Last year, Thermo Fisher made news with its $3.5 billion acquisition of Phadia and $2.1 billion purchase of Dionex. But it may be a little weary after those big buys. Although Casper's company will keep its eye open for deals, he doesn't see larger transactions happening "any time soon." Report

FierceMedicalDevices takes a holiday

Liz Jones Hollis — Wed, 15 Feb 2012 11:23:52 -0500

In honor of President's Day, FierceMedicalDevices won't be published Monday. But we'll be back next Wednesday to deliver the latest device news and insight. In the meantime, watch our Twitter feed and our website for any breaking device news. -- Liz Hollis (email | twitter)

J&J sold troubled hip implant internationally even as FDA nixed it

Mark Hollmer — Wed, 15 Feb 2012 11:22:03 -0500

Johnson & Johnson and its DePuy Orthopaedics division may be setting themselves up for many more lawsuits over metal-on-metal hip replacements, The New York Times reports. That's because the company apparently kept selling the ASR product in Europe and elsewhere internationally, even as the FDA declined in 2009 to approve its sale after a review of J&J's safety studies.

J&J/DePuy issued a voluntary, massive global recall of two versions of the product in 2010 that affected more than 90,000 patients, after reports of too many patients whose hip replacements failed prematurely. The company also blamed sales declines. But after the FDA decision and before the recall, sales of the product continued internationally. Sales proceeded in the U.S. with a similar model that had gained approval through the 510(k) process that helped avoid a related safety review and additional clinical testing, the NYT notes.

As the article points out, none of the company's actions were illegal. The FDA's approval process is designed to be confidential, and the European and other international regulatory gantlets allowed the product to reach the marketplace, after all. But here's where the legal liability may increase: The FDA told J&J in a confidential letter that the international safety data it used to try to gain U.S. approval wasn't enough to determine if the implant was both safe and effective, and regulators urged more clinical tests. And J&J appears to have not discussed the FDA non-approvable letter publicly while it was still selling the hip replacements overseas, and product complaints grew. A DePuy spokesperson told the NYT that the company had received the FDA letter but would not confirm whether DePuy talked about FDA concerns with the international medical community, patients, investors or regulators.

With this in mind, J&J/DePuy risks many more lawsuits, the NYT predicts. In January, J&J took a $3 billion charge to cover anticipated recall-related legal and medical expenses. About 5,000 lawsuits (and counting?) are pending, according to the article.

- here's the NYT article

Quest to partner with Israeli biotech on MAP test

Liz Jones Hollis — Wed, 15 Feb 2012 10:43:59 -0500

Quest Diagnostics ($DGX) is teaming up with Israel's RedHill Biopharma on a diagnostic test for mycobacterium avium paratuberculosis bacteria in the blood of Crohn's disease patients. RedHill is aiming to start studies of RHB-104 for this indication in both Europe and the U.S.

Last fall, RedHill acquired the exclusive rights to a diagnostic test for MAP bacteria from the University of Central Florida Research Foundation. Saleh Naser, a professor at UCF's College of Medicine, developed the technology for the test. Experts believe roughly half of Crohn's sufferers have MAP in their system, and the test should be able to identify those who carry the bacteria. Crohn's affects about 700,000 patients in the U.S. alone, the company notes.

RedHill's Patrick Mclean, who is the RHB-104 product manager for RedHill, said in a UCF article the acquisition of the test represented a "key milestone" in the development of a Crohn's treatment.

The development marks the latest in a series of biopharma-diagnostic partnership announcements. In fact, Quest was recently in the news for an FDA sign off for a companion diagnostic test for Biogen Idec ($BIIB) and Elan's ($ELN) multiple sclerosis drug Tysabri to help assess the risk for a rare brain infection called progressive multifocal leukoencephalopathy.

- see Globes' take

Cayenne closes $10M to advance sports med portfolio

Liz Jones Hollis — Wed, 15 Feb 2012 09:13:30 -0500

Scottsdale, AZ-based Cayenne Medical has closed a $10 million equity financing, with new investor Fletcher Spaght Ventures joining Split Rock Partners, MB Venture Partners and Investor Growth Capital. The company says it will use the proceeds to boost sales and distribution and support expansion of its sports medicine portfolio.

Cayenne was founded in March 2005 and is focusing on what it terms unmet clinical needs in arthroscopic surgery. Its offerings include products for knee ligament reconstruction and meniscal repair.

However, this month the company will launch the Quattroshoulder system for rotator cuff and labral repairs. And it marks a big milestone for the company. Last year, CEO David Springer emphasized the importance of shoulder procedures in an interview with OrthoTec. Although the company was founded on shoulder tech, it went into the knee market to help meet a larger unmet need. Roughly 90% of Cayenne's knee users also do shoulder surgery, he explained. "They tend to do three or four shoulders for every ACL repair," he said. "We see a huge market opportunity with this strategy."

The company isn't stopping with knees and shoulders. "In five years, [we want to] be the company that the physician can [use to] take care of the patient from top to bottom," Michael Gillem, Cayenne's VP of sales, said in a 2010 interview, as quoted by OrthoTec.

- read Cayenne's release

Stryker's Hartman sees salary boosted to $750K, MacMillan negotiates separation agreement

Liz Jones Hollis — Wed, 15 Feb 2012 08:29:43 -0500

In the wake of his abrupt resignation, CEO Stephen MacMillan is still working out the specific details of his separation agreement with Stryker ($SYK). Meanwhile, interim CEO Curt Hartman, who also serves as the company's VP and CFO, will see his pay boosted to $750,000 and his target 2012 bonus of $388,125 will be increased to $750,000. SEC filing

Atossa files for IPO in effort to raise $6M

Liz Jones Hollis — Wed, 15 Feb 2012 07:40:06 -0500

Seattle's Atossa Genetics, which offers diagnostic tests to detect precursors to breast cancer, is planning an initial public offering of 1 million shares of its common stock.

In a filing with the SEC, the company says it expects its IPO price will be between $5 and $7 per share. It hopes to trade on the Nasdaq Capital Market under the symbol "ATOS."

With the roughly $6 million it hopes to raise with the IPO, Atossa will expand its cytology and molecular diagnostics laboratory, fund the manufacture of MASCT System units, and hire and train sales and marketing personnel for the ForeCYTE and ArgusCYTE breast health tests, among other activities.

Atossa recently launched two breast health tests: the ForeCYTE, which offers personalized information about the 10-year and lifetime risk of breast cancer for women between the ages of 18 and 65, and the ArgusCYTE, which gives information to help inform breast cancer treatment options and to help monitor potential recurrence. In December, the company began limited marketing of the ForeCYTE test to doctors for use in conjunction with other health screening examinations. Atossa also is establishing relationships with breast cancer centers to provide the ArgusCYTE test to their patients, the company says in its filing.

The company hopes to launch two other tests, known as FullCYTE and NextCYTE, in late 2012 or early 2013.

The young startup opened its doors in 2009 and is helmed by Steven Quay, former CEO of Nastech Pharmaceuticals (later MDRNA and now Marina Biotech). He invented technology for collecting breast fluid and analyzing it for abnormal cells, The Seattle Times notes. Quay nabbed the rights to the tech, which is now the basis for Atossa's tests, after leaving MDRNA in 2008.

Quay hopes the company's tests could prove as vital--and as common--as the Pap smear to women's health. "The Pap smear took 20 years to be adopted," Quay said last year, as quoted by the Puget Sound Business Journal. "This is a decadelong adoption time. We have no competitor specifically in our space."

- check out the Atossa release
- see the SEC filing
- read more from The Seattle Times

Related Article:
Seattle biotech entrepreneur floating $15M IPO

Does Riata recall indicate subpar device surveillance?

Liz Jones Hollis — Tue, 14 Feb 2012 22:32:51 -0500

Is U.S. medical device postmarketing surveillance lacking? At least one author, writing in The New England Journal of Medicine, seems to think so. And he points to St. Jude Medical's ($STJ) Riata recall as an example of how the U.S. system isn't up to snuff.

In the article titled, "Here We Go Again -- Another Failure of Postmarketing Device Surveillance," author Robert Hauser of the Minneapolis Heart Institute Foundation maintains that U.S. citizens are still exposed to "underperforming and potentially hazardous" FDA-approved medical devices "despite multiple recalls and some tragic adverse events." He singles out the St. Jude recall of its Riata leads as only the latest example of how the U.S. "passive" postmarketing surveillance system is flawed.

In December, the FDA classified St. Jude's voluntary medical device advisory letter to physicians from Nov. 28 relating to its Riata and Riata ST silicone defibrillation leads as a Class I recall, putting it in the most serious category.

However, Hauser is questioning St. Jude's follow-up to the situation. "St. Jude Medical recommends that physicians continue to monitor these leads every 3 to 6 months, rather than replace them prophylactically," Hauser notes. "This recommendation is based on no meaningful data, because in a system notorious for underreporting, no such data exist. Meanwhile, physicians and their patients are in a quandary: Will the lead work when lifesaving therapy is needed?"

He also mentions that St. Jude is marketing the Durata ICD lead, which he says is similar in design to the Riata ST leads. "Thus far, the 85,000-plus Durata leads implanted in patients in the United States appear to be performing well, but we do not have a surveillance system in place that can detect low-frequency failures or adverse clinical events involving Durata leads or any other marketed medical device. So your guess is as good as mine," he writes.

To remedy the situation, Hauser says the FDA must "mobilize available resources now to improve postmarketing surveillance for ... patients."

For its part, St. Jude has a different take on the situation and defends its postmarket surveillance program. "St. Jude Medical has the most active postmarket surveillance program in the industry for these leads," said St. Jude CMO Mark Carlson in an emailed statement to Bloomberg. "St. Jude Medical has a strong history of product safety and reliability, and we remain dedicated to developing technology and products that save and improve the lives of patients."

Hauser is no stranger to taking devicemakers to task over safety problems. He and a colleague called out Guidant in 2005 for safety problems. Two years later Hauser and a team documented safety problems with a lead wire from Medtronic ($MDT) that also was recalled, the Pioneer Press notes.

- read Hauser's take
- check out the Bloomberg story
- see the Pioneer Press report

EU seeks greater oversight after breast implant hysteria

Mark Hollmer — Mon, 13 Feb 2012 11:04:52 -0500

Tougher device/diagnostics approval regulations in the EU appear increasingly likely in the wake of the continent's recent breast implant scandal.

The scandal over the now-defunct French implant maker Poly Implant Prothese hasn't been forgotten. European scientists are now pursuing an additional study focusing on the health and safety of patients who received those implants, after an initial finding late last year that women who received them were at a greater risk for health problems than those who didn't. But EU health and consumers chief John Dalli also sounded the first drumbeat of a larger regulatory response late last week, Reuters reports.

Dalli told a news conference he's asked health ministers from all 27 EU countries to maximize existing rules and review the dozens of regulatory agencies--many are private companies--that handle approvals for high-risk medical devices. The end goal is to make sure that the notified bodies--the groups that handle device approvals--are only evaluating and approving devices that fit with their specific, respective expertise, according to the Reuters article.

Meanwhile, industry group Eucomed issued a statement supporting the effort, and the European Commission's push to improve device safety approval procedures in the long term with changes such as surprise inspections. The EC has said the initial steps will boost surveillance of medical devices and diagnostics as it pursues a larger regulatory overhaul.

"I have asked my colleagues in the member states for their personal commitment to implementing these actions as a matter of priority," Dalli is quoted by Reuters as saying.

- here's the Reuters article