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MX: Issue Update

May 2005

Investing Climate Remains Warm for Medtech

According to a national poll of leading medtech business executives and venture capitalists, the climate for medtech investing has definitely warmed up over the course of the past three years. And this year—with the steady decline of expectations for growth in pharmaceuticals continuing—expectations for growth in medical technology are solidly in the fields of medical devices and biotechnology. This month, attorney Barbara A. Wrigley, Esq., discusses these and other results of the “2005 National Medtech Investing Survey” conducted by the law firm of Oppenheimer Wolff & Donnelly LLP (Minneapolis) and MX magazine. This year’s results mark the third appearance of this annual survey, which investigates investing trends in the medical technology marketplace. Wrigley is a partner and cochair of the medical technology industry group at Oppenheimer Wolff & Donnelly. [ More ]

Wrigley
 Oppenheimer’s Wrigley:
 Warm times for medtech.

Top Medtech Companies Posting Solid Revenue Gains

Unlike other technology sectors that struggled through the economic doldrums of 2004, the top 20 medtech firms turned in another year of solid performance. Of these 20 companies, 18 realized year-to-year revenue gains, with 12 firms posting double-digit sales increases. Only two companies saw 2004 revenues decline as compared with 2003. [ More ]

 
 

AdvaMed Takes Issue with FDA ‘Conditions of Approval’ Report

In a recent letter, industry association AdvaMed (Washington, DC) took issue with a report from FDA’s Center for Devices and Radiological Health (CDRH; Rockville, MD), which, in the organization’s opinion, left the impression that medtech manufacturers demonstrated poor compliance with required condition of approval (COA) postmarket studies during a two-year follow-up evaluation.

The report, “Condition of Approval Studies as a Postmarket Tool for PMA Approved Cohort 1998–2000,” was released in late March of this year. During the period covered, CDRH reported, only 42% of the required studies were completed or were proceeding on schedule.

Schultz
 CDRH Director Schultz:
 Taking the heat.


In a letter to CDRH director Daniel G. Schultz, MD, AdvaMed’s associate vice president for technology and regulatory affairs Jeffrey Secunda said that “the characterization of the medical device industry as being substantially out of compliance is both inaccurate and unfair based on the full facts, which were easily obtainable from the sponsors of the cited PMAs.” [ More ]

ArthroCare’s Favorable Patent Infringement Ruling Put on Hold

Earlier this month, the U.S. Court of Appeals for the Federal Circuit partially upheld a jury verdict in favor of ArthroCare Corp. (Sunnyvale, CA) in its patent infringement dispute with Smith & Nephew plc (London). At issue were patents covering electrosurgical instruments for use in minimally invasive arthroscopic procedures. The appeals court upheld the validity of two ArthroCare patents while rejecting a third claim. Additionally, the court lifted the permanent injunction against Smith & Nephew after it found that a procedural error had occurred in a district court hearing on an antitrust counterclaim brought by Smith & Nephew. [ More ]

Boston Scientific and Aspect Medical Form Brain Monitoring Alliance

Aspect Medical Systems Inc. (Newton, MA) and Boston Scientific Corp. (Natick, MA) have announced the formation of a strategic alliance to advance the development of brain monitoring technology for diagnosing and treating depression, Alzheimer’s disease, and other neurological disorders. Under the terms of the agreement, Boston Scientific will provide Aspect Medical with $25 million to fund the research and development activities. Aspect president and CEO Nassib Chamoun said the alliance “represents an exciting opportunity to accelerate the pace of Aspect’s neuroscience research program.” [ More ]

Chamoun
  Aspect Medical CEO
  Chamoun: A faster pace.

Biomet Gets Permanent Injunction against Medtronic

A U.S. district court in California has granted Cross Medical Inc. (Dublin, OH), a division of Biomet Inc. (Warsaw, IN), a permanent injunction against Medtronic Sofamor Danek, the spinal business unit of Medtronic Inc. (Minneapolis). The injunction follows a court ruling in April and covers multiaxial screws used in spinal fusion surgery that were found to infringe a Cross patent. [ More ]

MX Executive Webcast Archived

MX Executive Webcast SeriesAn archived version of the recent MX Executive Webcast, “Managing Healthcare Customers: The Essentials of CRM Systems for Medical Device Manufacturers,” is now available for on-line viewing. Originally broadcast on May 24, the event is the first in a series of free, on-line discussions for medical technology executives presented by MX magazine. The Webcast features a presentation by Judd Banks, business manager at Pivotal Corp., with commentary by Don Patulo, senior director for sales support and training applications at Sysmex America Inc. The event concludes with a Q&A session moderated by Steve Halasey, editor in chief of MX magazine.[ More ]

 

Cyberonics Faces New Hurdle

Less than three weeks away from an expected final decision from FDA on its vagus nerve stimulation (VNS) therapy system for the treatment of cases of depression considered treatment-resistant, Cyberonics Inc. (Houston) received notification from the U.S. Senate Finance Committee that it is examining FDA’s handling of the company’s application for device approval. [ More ]

Guidant Fails to Disclose Defibrillator Problem

Although aware of a potential problem for more than three years, Guidant Corp. (Indianapolis) did not tell doctors or patients that one of its defibrillator models contained a flaw that could result in malfunction. The device, the Ventak Prizm 2 Model 1861implantable defibrillator, is now linked to the death of a 21-year-old college student with a genetic heart disease. The young man died while on a bicycle trip in Utah .

= Joseph Smith, MD
Guidant CMO Smith:
Low-risk decision

Guidant has acknowledged that the patient’s defibrillator had short-circuited. The company said it was aware of 25 other incidents of device failure for the particular model, but no other deaths. Guidant also reported that it had modified the manufacturing process for the device in November 2002, and that malfunctions were limited to devices made before the design change. FDA was advised of the changes in the company’s annual report of August 2003. The company also maintains that each instance of malfunction was reported to the regulatory agency in a timely fashion.

Yet Guidant never issued a “Dear Doctor” advisory letter to physicians, which is a common practice when such incidents occur. The company’s chief medical officer, Joseph Smith, MD, said that the company did not issue an alert since the risk was considered very low and replacing the device—a surgical procedure—could actually pose greater danger, particularly from infection. [ More ]

MX: Issues Update is a monthly e-supplement prepared by the editors of MX: Business Strategies for Medical Technology Executives and sent to you as a benefit of your on-line registration with Canon Communications. To become a regular subscriber to this monthly medtech business update, click here.

The editors welcome your suggestions for future content in MX: Issues Update. Please feel free to contact us with your comments and ideas. —Steve Halasey, Editor in Chief, MX
MX: Issues Update is a monthly e-supplement prepared by the editors of MX: Business Strategies for Medical Technology Executives and sent to you as a benefit of your on-line registration with Canon Communications. To become a regular subscriber to this monthly medtech business update, click here.
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