Medical Device Link.

Boston Scientific CEO Tobin: A hat in the ring.

By mid-November, Johnson & Johnson Inc. (J&J; New Brunswick, NJ) probably thought it had finally resolved the problems surrounding its nearly year-long initiative to acquire Guidant Corp. (Indianapolis). But less than three weeks later, rival cardiac device maker Boston Scientific Corp. (Natick, MA) emerged with a bid that put J&J’s entire deal on ice.

Boston Scientific’s bid of nearly $25 billion quickly garnered the interest of Guidant management and shareholders. It was about $4 billion more than J&J’s renegotiated offer, which Guidant appeared to accept reluctantly. J&J may still counter with a higher offer, but

many analysts believe the company has dug in its heels. If it does balk on Guidant, some believe J&J will set its sights on a new acquisition in the cardiac rhythm management segment, possibly the number-three player in the market, St. Jude Medical (St. Paul, MN). [ More ]

In a $1.3 billion deal, St. Jude Medical Inc. (St. Paul, MN) has acquired Advanced Neuromodulation Systems Inc. (ANS; Plano, TX). Now a new division of St. Jude, ANS is a leader in the neuromodulation device market and reportedly holds the number two market spot in the spinal cord stimulation segment.

"This is a compelling strategic opportunity for St. Jude Medical and is consistent with our efforts to create additional long-term growth drivers that diversify our business mix and deliver value to our shareholders," said Daniel J. Starks, St. Jude Medical chairman, president, and CEO. "We welcome ANS’s employees to St. Jude Medical and expect them to be an important part of our continued success." [ More ]

In November, President Bush named in vitro diagnostics manufacturer Gen-Probe Inc. (San Diego) as one of seven National Medal of Technology laureates for 2004. The company was recognized for the development and commercialization of its Procleix line of nucleic-acid based blood-screening tests.

"We are honored to receive this prestigious award for innovation in protecting the donated blood supply," said Henry L. Nordhoff, chairman, president, and chief executive officer of Gen-Probe. "I would like to thank the hundreds of Gen-Probe employees whose talents, expertise, and extraordinary efforts made this

recognition possible. We also received support from many external collaborators, including the National Heart, Lung, and Blood Institute, our blood bank customers, Chiron Corp., and the U.S. Food and Drug Administration." [ More ]

CooperSurgical, the women’s healthcare unit of the Cooper Companies Inc. (Lake Forest, CA), has entered the gynecological surgery market through the acquisition of two privately held device companies. Although details of the transactions were not released, the company expects the combined businesses to contribute $10 million in revenue in 2006 and about $50 million annually by 2010.

"Since its inception in 1990, CooperSurgical has become a successful competitor against the larger and more diversified medical device manufacturers that compete in the physician’s office segment of women's healthcare," said Cooper CEO A. Thomas Bender.

Galakatos: Creating company value.

Clarus Ventures (Cambridge, MA), a new venture capital firm focused on life sciences, has closed its inaugural fund of $500 million. The fund will provide capital and resources for portfolio companies primarily in the biopharmaceutical and specialty pharma sectors, but will have a secondary focus on medical device manufacturers and companies developing biotechnology platforms.

"Each member of the Clarus team has a track record of consistently building companies that are emerging leaders in their sectors," says Nicholas Galakatos, PhD, a Clarus managing director. "The Clarus partnership has the breadth and depth required to create significant value by investing at any stage of a life sciences company’s growth." [ More ]

The Costar stent from Conor Medsystems Inc. (Menlo Park, CA) continues to gain traction in the medtech and financial press following encouraging early clinical trials. Those studies will expand further now that FDA has approved full enrollment in Costar II, which will include 1700 patients at 85 sites. In Costar II, Conor Medsystems’ stent will be compared with Taxus, the market-leading drug-eluting coronary stent manufactured by Boston Scientific Corp. (Natick, MA).

Contrasting Costar with the drug-coated stents currently on the market, Conor says its stent represents a unique design that features hundreds of tiny holes, each acting as reservoir for improved flow, direction, and duration of the drug-polymer compound. Costar also uses a bioabsorbable polymer designed to leave no residue in the body following depletion of the drug compound. Conor

Medsystems expects Costar to receive European approval in the second half of 2006 and is setting its sights on U.S. market entry in late 2007.

But while the stent’s prospects sound promising, the company has already been hit with several patent infringement suits and criticism over potential conflicts of interest. Also attracting attention is the reportedly controversial management background of the company’s chairman and CEO, Frank Litvack, MD. [ More ]

Similar to the probe of leading orthopedic firms announced last March, the U.S. Department of Justice (DOJ) recently issued subpoenas to the top three manufacturers of cardiac rhythm management (CRM) devices: Medtronic Inc. (Minneapolis), Guidant Corp. (Indianapolis), and St. Jude. Medical Inc. (St. Paul, MN). Although not specified, the information request is believed to be part of an investigation of possible violations of federal fraud, abuse, and antikickback laws. All three companies have expressed their full cooperation and compliance with the DOJ investigation.

The subpoenas, issued by the Boston office of U.S. Attorney Michael Sullivan, requested information and documentation related to the sales practices associated with each company’s implantable cardioverter defibrillators, cardiac pacemakers, leads, and related product lines. Guidant also received an additional subpoena from the U.S. attorney in Minneapolis concerning several of its CRM devices that were recalled earlier in the year.

Most analysts see the investigation as yet another move to beef up government scrutiny of the medical device industry. A long and protracted inquiry is expected, as are eventual fines. The inquiry may also

In a pitched and convoluted battle to acquire breast-implant manufacturer Inamed Corp. (Santa Barbara, CA), Allergan Inc. (Irvine, CA) has emerged as the victor.

Last March, Inamed accepted a $2.8 billion offer to be acquired by Medicis Pharmaceutical Corp. (Scottsdale, AZ). But in mid-November, Allergan suddenly upped the ante with a $3.2 billion bid. The situation was further complicated by an unsolicited and somewhat underpowered move from Inamed competitor Mentor Corp. (Santa Barbara, CA) to acquire Medicis for $2.2 billion.

Earlier this month, the International Society for Minimally Invasive Cardiothoracic Surgery (Beverly, MA) concluded in a consensus statement that off-pump coronary artery bypass surgery (OPCAB), or ‘beating heart’ surgery, is as safe and effective as conventional coronary artery bypass surgery and may even be more appropriate for certain at-risk patients. The statement followed a 19-month review of clinical data and outcomes over the past decade comparing OPCAB with traditional procedures that require use of a heart-lung machine.

"Once again, there is a persuasive story to the benefits of beating heart surgery," says Oern Stuge, MD, senior vice president and president of cardiac surgery at Medtronic

Inc. (Minneapolis). "We expect that more physicians will continue to embrace, and more patients will continue to request, this surgical approach." Numerous medtech manufacturers, including Medtronic, supply a wide range of stabilizers, positioners, and other devices used in OPCAB procedures. [ More ]

More than 61,000 people convened in Chicago at the end of November for the annual meeting of the Radiological Society of North America (RSNA), the largest annual medical convention in the world. The event featured its largest-ever exhibition hall, spanning 489,359 ft and filled with 718 exhibitors, including 130 first-timers. Prominently featured among product launches by exhibiting medtech manufacturers were the latest developments in systems connectivity. [ More ]

Medtech manufacturers, industry associations, patient advocacy groups, and healthcare fundraising organizations are calling on Congress to pass the Save America’s Biotechnology Innovative Research Act (SABIR), which would ensure the availability of small business innovation research (SBIR) grants to smaller, innovative companies that are often on the vanguard of new developments in medical technology and the life sciences.

Recent changes in the interpretation of SBIR eligibility requirements by the Small Business Administration (Washington, DC) prevents firms from participating in the program if they receive more than 51% of their funding in venture capital. SABIR would effectively nullify this provision and restore the previous funding eligibility criteria for SBIR grants, which are sponsored by the National Institutes of Health (Bethesda, MD).

"We need to reward companies making high-risk, high-gain investments in medical research," says Greg Simon, president of FasterCures/The Center for Accelerating Medical Solutions (Washington, DC). "Instead, we’re